Dublin-listed Draper Esprit partners with German VC Earlybird as merger looms

Dublin and London-listed venture capital firm Draper Esprit has teamed up with Berlin-based Earlybird in a move that could lead to a merger between the two companies.

Together, both businesses will have the equivalent of a €1 billion fund, one of the largest in Europe, and a portfolio of over 100 European tech businesses.

The partnership is expected to deploy up to €200 million a year in seed, Series A, B and C technology companies. It is anticipated there will be between 15 to 20 new deals a year carried out by the teams.

As part of the partnership, Draper Esprit has taken a stake in Earlybird’s VI fund, initially investing €18 million with further investments of €17 million a year until 2022. The companies have also agreed to share deal flow, investment resources and expertise to co-invest together in high-growth European tech companies.

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Earlybird is one of Europe’s most active venture capital partnerships with a team of 23 investment professionals managing over €1 billion. It has invested in several leading technology companies in recent years including N26, Smava, UI Path and Peak Games.

Invested

The Earlybird VI fund will have total commitments of €175 million of which €36 million has already been invested to date across 13 companies. Initial companies in the fund include Shapeshift, Everoad, Movinga, Fraugster, Medidate, Xain and CrossEngage.

Draper Esprit, which has previously backed a number of leading Irish tech companies such as Movidius and Clavis Insight, said it has also issued 64,820 new shares to the benefit of the Earlybird partners in exchange of a minority stake in the management company of the fund.

"We have worked with the Earlybird partners as co-investors and industry members for many years and have huge respect for the leading VC position they have built in Germany and across continental Europe. With our resources combined as genuine partners we will be able to help European entrepreneurs scale their global ambitions even higher," said Draper Esprit chief executive and co-founder Simon Cook.

Since its initial public offering (IPO) in June 2016, Draper Esprit has funded more than 25 new businesses, grown its gross portfolio value by 209 per cent and realised over £57 million (€64 million) in cash, including amounts held in escrow for investors.

Draper announced plans to raise £176 million (€200 million) in long-term capital to enable further investment in European technology companies in late May.

The VC firm has had a busy year so far in 2018 participating in funding rounds for AirCall, Realeyes, Evonetix, Ledger and Revolut.