Ada Ventures has closed its second fund at £63 million to back diverse early-stage founders.
The London-based VC says institutional investors have backed the fund including British Business Bank, University Of Edinburgh, Big Society Capital, Legal & General Capital, Atomico, the Export and Investment Fund of Denmark (EIFO) and Molten Ventures.
Angels including Wise founder Taavet Hinrikus and Supercell co-founder and CEO Ilkka Paananen – the latter through his family office Illusian – have also contributed.
Launched in 2019, Ada Ventures has backed a range of success stories, including Huboo, Boundless, Bubble SideQuest, Spill, Materials Nexus, Greenworkx, Micrographia, Gizmo and Tooth Fairy.
Its current portfolio is on track to generate in excess of £100m net revenue over the coming year. These companies have attracted co-investment and follow-on funding from the likes of GV, NFX, DCVC and Index Ventures.
“We’re thrilled to announce the final close of our second fund and share more data around the diversity and performance of our portfolio,” said Check Warner, co-founding partner at Ada Ventures.
“We believe these metrics show just how powerful and effective the Inclusive Alpha approach is. We’ve worked incredibly hard over the last five years to develop the systems and processes to turn our ambition to build a truly diverse and inclusive fund into reality.
“Strong returns are strongly correlated with inclusive investment. We want other funds to copy this blueprint. The excuse that diverse talent isn’t ‘out there’ is a cop out.
“We have proven that you can build a thriving, inspiring portfolio of diverse founders building breakthrough products and hugely valuable businesses.”
It will make investments of between £250k and £1.5m in pre-seed and seed stage startups, with a significant amount allocated for follow-ons. Twelve investments have already been made from the second fund.
Ada takes an ‘Inclusive Alpha’ approach to its investment decisions: a belief that backing ‘alpha’ ideas and founders can coexist with a commitment to inclusion.
This includes providing access to mental health support for founders and a commitment to supporting parents in their portfolio with the cost of childcare – an initiative which, since launching in October, has already been embraced by nearly 15% of the firm’s portfolio companies.
Chris Hopkins, managing director, venture capital, at Legal & General Capital, said: “We are pleased to have invested in Ada Venture’s second fund and support their wider investment strategy to broaden out access to capital and address the lack of diversity within the UK & European VC ecosystem.
“Diverse teams drive growth and better outcomes, and Ada Ventures inclusive approach is targeting the emerging cohort of startups who are developing innovative solutions for society’s greatest challenges. The oversubscribed second fund is a fundraising success story and signals the growing industry recognition on these issues.”