A new early-stage venture capital (VC) firm that focuses on European and Israeli “deep tech” enterprise startups eyeing U.S. expansion, has officially closed its inaugural fund.
London-headquartered Angular Ventures, which has additional hubs in Tel Aviv and New York, has announced an “oversubscribed” $41 million institutional seed fund — significantly more than the $25 million it planned to raise according to its filing with the U.S. Security and Exchange Commission (SEC) last year.
Founded in May 2018 by Gil Dibner, an angel investor and former partner at DFJ Esprit, Angular Ventures has invested in 12 startups already since the fund’s inception — these include Finland’s Valohai, which recently raised a $1.8 million seed round to further develop a version control platform for artificial intelligence (AI) and machine learning (ML), and blockchain-based security startup Dust Identity, which raised a $10 million series A round led by Kleiner Perkins.
A typical investment could be anything from a $250,000 “day zero” to a $1.5 million injection as part of a series A round.
It’s worth noting here that while Angular Ventures does focus heavily on helping European and Israeli startups to enter the U.S., a number of its portfolio companies were in fact already based in the U.S., albeit with European or Israeli founders. Dust Identity, for example, was born out of the Massachusetts Institute of Technology (MIT), and the founders have been based in the U.S. for some time. Similarly, Aquant, which develops AI software that improves the uptime of industrial machinery, raised a $10 million series A round last year with Angular Ventures participating — its Israeli founders launched the company from New York.
In short, Angular Ventures isn’t following a particularly strict protocol in terms of the origin-status of the portfolio startups themselves, and is more interested in where the founders hail from originally.
“One of our defining characteristics is that we are fundamentally ‘post-geographic’ or ‘geographically agnostic’,” Dibner told VentureBeat. “Our core focus is companies coming out of Europe and Israel — but unlike the vast majority of funds operating in those geographies at an early stage, we take a truly international approach to sourcing, identifying, diligencing, and investing in great companies –wherever they may be from.”
This loose location ethos is further evidenced by its portfolio company Kintohub, which only has a very tenuous connection to either Europe or Israel.
“KintoHub was introduced to Angular by an Israeli founder in our network,” Dibner said. “KintoHub was founded by an American currently living in Hong Kong. After extensive due diligence, we decided to invest and helped the company incorporate in Delaware, secure additional financing from leading American VCs, and prepare itself for a next round in the U.S.”
The one thing each of Angular’s startups do have in common, though, is that they’re heavily invested in the U.S. market, with half of its portfolio firms already headquartered there. It has also chosen to focus on companies that specialize in specific sectors, though some of its portfolio are so early-stage that they aren’t yet generating revenue.
“Angular was founded based on the idea that sector specialization is a more powerful and sustainer driver of venture returns than geographic specialization — and the U.S. remains by far the most attractive and important market for early-stage enterprise tech and deep tech founders to focus on in the vast majority of cases,” Dibner added. “Within our portfolio of twelve European and Israeli comapnies, six are already headquartered in the U.S. Some of our companies are pre-revenue, but of the companies that already have customers, all of them have U.S.-based customers.”
And thus, Angular’s decision to have an on-the-ground presence in the U.S. from the get-go is pivotal to its pitch to potential startups, as it promises a direct gateway to the American market.
“We’ve also made a strategic hire to help our portfolio launch and scale successfully in the U.S.,” Dibner continued. “Our head of platform, Anne Blum, is based in New York, having held similar roles at Facebook and the German Accelerator.”
Behind the scenes
Although Dibner is very much the face of Angular Ventures, the VC firm counts some big names among its roster of advisors, including Fred Simon, founder of devops platform JFrog, a unicorn as of last year, and Jerry Dischler, who heads up Google’s ads platform.
According to Dibner, more than half of his fund’s capital emanates from the U.S., and nearly three-quarters of the fund is institutional, including two U.S.-based endowments. Additionally, seven of Angular’s 12 investments so far have also included U.S.-based venture capitalists as co-investors.
Angular Ventures isn’t the first VC firm to focus on deep tech startups in Europe. Japan’s NordicNinja VC launched a $113 million fund last year to invest in transformative companies across the Nordics and help them launch into Asia. Elsewhere last year, Berlin-based Earlybird launched a $204 million pot and U.K.-based IQ Capital announced a $165 million tranche — both for early-stage deep tech startups in Europe.
However, Angular’s specific position is about helping fledgling companies scale in the U.S. which will likely be an alluring proposition for many budding entrepreneurs.