Announced Thursday (April 20), the fund — Kindred’s third — will invest in businesses offering “picks and shovels,” in other words, “tools and services that power industries — the [application programming interface (API)], orchestration and data layers that have sustainable differentiation.”
In addition, the London-based VC outfit said in the announcement it will focus on early-stage companies, a move that comes as later-stage companies have been hurting to find capital.
“For us, we stay laser-focused on the early-stage pre-seed and seed rounds, and therefore each investment we make is meaningful for our fund,” the company said in the announcement. “We’ve all been ex-operators, and we enjoy the uncertainty and ambiguity of the early-stage company building.”
While VC funding has seen a downturn in Europe overall across all three stages — early, growth and late — early-stage firms saw the lowest pullback, down 7%.
“Late-stage firms took the hardest hit, however, further complicating matters for capital-starved companies as funding had already been on a downward slope these last few quarters,” PYMNTS reported last week.
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Investments secured fell 77% year over year to reach $4.3 billion in the first quarter of the year.
Early-stage funding in Europe is in a healthier space, surpassing late-stage firms for the first time since the closing quarter of 2020 with a $600 million lead.
Speaking to PYMNTS earlier this month, Zeynep Yavuz, FinTech partner at early-stage venture capital firm General Catalyst, talked about the potential these firms have to tap into the VC dry powder in Europe as growth-stage firms continue to face stock market challenges.
“I believe it’s an amazing time to build a company, and because the funding market has slowed down in the growth and late-stage space, a lot of the capital is shifting to early-stage,” Yavuz told PYMNTS.
Growth-stage companies, she said, face the biggest hurdles: “The first category that gets hit [amid stock market challenges] is whoever is closer to the public markets, and those are growth-stage companies.”
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