Global Founders Capital is a Berlin-based VC venture capital company with close ties to the German startup factory Rocket Internet, which is set to become Rocket Internet's venture arm.
The VC has previously raised two billion-dollar funds and only a few years ago, its name appeared in dozens of transactions per year. But then, things quieted down. Now we know why: in the future, it will exclusively invest from Rocket Internet's balance sheet.
According to last year's financial times report, Global Founders Capital was at the forefront of a major strategic change. A few weeks ago, the VC came to TechCrunch to confirm the shift and discuss the reasons behind the transition.
"To be transparent, there have been quite a few changes at Global Founders Capital in recent years – in terms of the fund's structure and team composition," said Global Founders Capital partner David Sainteff.
Sainteff mentioned that the company decided that it was not the right time to raise another fund because they do not believe there are so many good opportunities that meet the company's criteria and that they do not need more funding to remain competitive against other investors in deals.
Initially built as a traditional venture capital firm with a few limited partners participating in the funds, Global Founders Capital supported future unicorns such as Personio, Revolut, and SumUp with its first fund. With its second fund, the company invested in several companies also covered by TechCrunch, like Pennylane, Ankorstore, and Syna.
Before joining Global Founders Capital seven years ago, Sainteff worked for Rocket Internet, which initially invested in Global Founders Capital from the start. So they had close ties from the beginning.
"With the launch of this second fund, we decided not to raise another fund. Instead, we will use Rocket Internet's capital," he confirmed. "We have 300 million euros allocated for venture investments in the balance. We have no planned fundraising."
Oddly enough, the company's past performance looks quite promising. According to Sainteff, the first fund is expected to deliver returns between 3 to 4 times. "For the second fund, it's too early," he continued. "But we have some clear winners like Pennylane. We entered the post-seed stage, and the company is worth over a billion euros."
The new strategy means that Global Founders Capital is now much smaller than it was, with only five partners remaining: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff, and of course Rocket Internet's founder and CEO, Oliver Samwer.
The updated version of the office will focus only on early-stage investments, in addition to the ability to invest in later rounds (Series A, B, C, etc.).
Did Global Founders Capital choose not to raise a third fund because it did not receive enough support from potential limited partners or because of the current technological slowdown compared to 2021 (excluding the AI boom)? Probably the decision was influenced by a bit of both.
"It was not the best moment to raise funds with (limited partners)," Sainteff told us. "We thought it would be hard to come to terms to deploy capital."
"It's an easy decision to make when you have 300 million euros in the bank," he added. "If other venture capital firms were in the same boat, they would make the same decision. We do not rule out the possibility of raising funds when conditions are right and convenient."
For now, the shift is a large part of the fund's previous expansion, as it expanded to more geographies, technological sectors, and funding stages, and the name Global Founders Capital has become synonymous with a group of deals.
