Episode 1 rolls out new $81M seed-to-Series A fund, despite Brexit headwinds


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Episode 1 has been a stalwart of the early-stage funding scene in London for the previous few years, investing in profitable startups like Carwow, Triptease and AimBrain. It’s now closed its second U.Okay. “seed-to-Sequence A” fund, which typically goals to guide rounds of £500,000 to £2 million. The fund is a £60 million ($81 million) Enterprise Capital Fund (ECF), raised with the help of the British Enterprise Financial institution, the U.Okay. authorities’s financial growth financial institution. Many U.Okay. funds are turning to the BBB within the wake of Brexit, which has successfully switched off the EU funding faucets.

A number of new establishments, together with Draper Esprit and ADV, joined the ranks of the fund’s present LPs. Draper Esprit, the publicly listed VC agency primarily based in London, introduced its funding in Episode 1 again in October.

Episode 1 stated the brand new fund is 60 p.c greater than its first fund, and was oversubscribed, regardless of the uncertainty attributable to issues like Brexit.

Founding associate Simon Murdoch (pictured left) emphasizes that the “huge quantity of expertise at Episode 1” — which incorporates his early stewardship of Amazon UK — is what attracts early-stage founders to the fund. In June the fund invested in AimBrain, a London startup that provides “biometric identification” as a service to assist fintech corporations and different monetary establishments struggle fraud.

Murdoch instructed me: “The macro setting is shifting round rather a lot. I’m not a fan of Brexit. It’s inflicting issues with startups with recruitment. But it surely’s higher in early stage than being invested in large corporations. There’s nonetheless loads of innovation. Startups are nonetheless an thrilling place to be, even with the present macro setting.”

“It’s very laborious to lift a fund proper now. Though we’re nonetheless fairly well-known, it’s nonetheless laborious to get cash from ‘fund of funds,’ so it’s nice to see DE and ADV make investments and we’ll see extra of that affected person capital change into concerned available in the market, particularly with Brexit.”

He added: “We’re predominantly about Enterprise and Marketplaces. We’re shying away from B2C because it requires deeper pockets. We’ve executed a variety of AI/ML corporations already. One key factor is the startup aiming at large markets. We’re eager on mega-markets like property, automobiles, manufacturing. So we’re centered on being ‘seed to Sequence-A’ specialists, the place the entrepreneurs are sometimes technical founders. The factor to do is search for nice individuals.”

On ICOs he stated: “ICOs are nice for corporations if they’ll elevate cash that means. However buyers needs to be cautious and solely purchase into ICOs the place they’re assured that the demand will outstrip provide sooner or later.”

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