News

Ada Ventures closes flagship fund to invest in overlooked founders

  • Inspired by Ada Lovelace, the nineteenth-century computer science pioneer, Ada Ventures is founded by experienced early-stage investors Francesca Warner and Matt Penneycard.
  • The firm’s investment strategy focuses on investing in overlooked founders, who are building companies that focus on underserved customer groups.
  • British Business Bank will make cornerstone investment of up to two-thirds of the total fund size. Other investors include Atomico, TransferWise founder Taavet Henrikus, Supercell’s founders, Arlan Hamilton of Backstage Capital, and BlueSky Capital.
  • The team has already invested in Predina, Inoviv, Motley, Ferly, Huboo, Polipop and Juno Bio.
  • Its Ada Scouts programme is a unique grassroots sourcing process that rewards a network of diverse community leaders, who become startup-hunters, also enabling them to become investors.

Ada Ventures today announces that it has raised a £27m ($34m) fund. At present, 92 in every 100 dollars invested in Europe goes to all male teams,[1] 83% founders are white,[2] 82% are university educated.[3] In the UK, a quarter of investment committees saw no female founders in 2017[4] and 72% of Venture Capital funding is invested in London alone.[5]

Ada Ventures was founded to change that. Ada Ventures is a first-cheque seed fund, and is on a mission to make venture capital truly accessible to the best talent in the UK & Europe, regardless of race, gender or background. The fund will target companies that are based in or intending to have significant operations in the UK.

British Business Bank will cornerstone the fund through its Enterprise Capital Funds (ECF) programme, which supports new and emerging VC fund managers who target the early stage equity gap. The programme combines private and public money to enable equity investments in high growth businesses, and since its inception it has committed around £1.3bn (including third party investment) to facilitate finance to 526 smaller UK high growth businesses.

Other investors include global funds such as US-based BlueSky Capital and Dubai based Rasmala alongside individuals from across the global tech ecosystem, including TransferWise co-founder Taavet Henrikus, Supercell’s co-founders, Backstage Capital’s Arlan Hamilton. The fund is backed by leading figures from industry such as Dame Cilla Snowball,  Silicon Valley law firm Wilson Sonsini and later stage funds Atomico and Inovia Capital.

It is the fund’s aim to have the most diverse pipeline, and portfolio, of any fund in Europe. Typically, Ada Ventures will look to invest a £500,000 first cheque – which comes post-initial product but pre-larger seed round – and reserve roughly half the fund for follow-on investments.

The fund will make around 30 investments in companies targeting globally significant problems, particularly for groups that are overlooked by venture capital, including ageing populations, women, and young people under 20. Key sectors are healthcare, consumer and the future of work.

Founding partners Francesca Warner and Matt Penneycard have worked together for four years, at Downing Ventures, Seraphim Capital and Techstars. Francesca is the co-founder of non-profit Diversity VC.

It also deploys Ada Scouts, a growing network of ‘scouts’ who are positioned and incentivised to bring excellent opportunities, in line with the firm’s investment strategy, to the table. Ada Scouts are vital: innately grassroots, they mirror the startups Ada wants to find and support, with the opportunity, via a finder’s fee and a longer term aligned incentive to become investors themselves. Ada Ventures has already agreed terms on two investments through this network.

Francesca Warner, founding partner, Ada Ventures, comments:

“Having worked in Venture for the last four years, and through co-founding Diversity VC, I’ve seen how structurally narrowly-focused the industry is, investing in the same founders building products and services for the same customers. This is a huge missed opportunity. Ada Ventures is here to change that. We’ve redesigned our funnel of opportunities with Ada’s scouts to give us wide exposure to founders who come from diverse backgrounds and who are solving some of the worlds most significant problems, problems that have been overlooked by the current crop of founders and VCs.

“Fundamentally, Ada Ventures is about true inclusion, and we will invest in anyone, no matter what they look like and where they come from. We are incredibly proud to have such an experienced and supportive group of investors partnering with us to make Ada Ventures the most inclusive fund in Europe.”

Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, said:

“We know from the British Business Bank’s own research that more needs to be done to increase the diversity of entrepreneurs backed by venture capital investment. Not investing in a diverse mix of business founders is a missed opportunity for the UK economy and Ada Ventures, with their fund focused on democratising VC investment regardless of gender, race, background, or location, is an important step in the right direction to address this.

“Our Enterprise Capital Fund programme has a track record of successfully backing first time fund managers like Ada Ventures, with our cornerstone support helping to unlock further investment from other investors. We are always looking out for good quality funds, with strong differentiation, that we can back to invest in the equity gap.”

Commenting on her own experiences with Ada Ventures, Olivia Ahn, co-founder & CEO of Polipop, the world’s first flushable sanitary pads, said:

“We approached many investors to support Polipop. As a FemTech company with a strong sustainability mission, we found investors were hesitant in an unfamiliar market. From the first meeting with Ada, it was clear that Check and Matt were different. They were not only fantastic advocates for the FemTech space but also for female and minority founders.

They were transparent with their process and aligned with our vision which is why we were delighted to have Ada as our lead investor. With Ada leading our pre-seed round, we quickly  attracted other investors to come on board and closed our £500k round in two months. Ada has been hugely supportive of Polipop and we’re excited about the impact they’ll have on other companies in markets that are similarly overlooked.”[6]

— Ends —

Contact

Ben Goldsmith

ben@goldsmithcomms.com

+44(0)7788295321

Scott Shearer

Senior Communications Manager

0203 772 1351 / 07770 704 761

Scott.Shearer@british-business-bank.co.uk 

Suzanna Jebbitt

Communications Manager

0203 772 1340 / 07827 552301

Suzanna.jebbitt@british-business-bank.co.uk

About and Resources

Founding partners’ track record

The fund is co-founded by Francesca (Check) Warner and Matt Penneycard, who are equal partners and have 18 years of investment experience in early-stage companies between them. That includes three of the fastest growing companies in the UK, Move GB, Papier and Trouva, as well as Open Bionics and Craft.co, which have been backed by top venture funds in the US and UK.

Francesca is also the co-founder of Diversity VC, the non-profit dedicated to diversity and inclusion in venture capital and entrepreneurship, which has published several original studies on the subject since its launch in March 2017. She was recently named one of the Forbes 30 Under 30.

Data-driven diversity

Ada Ventures is already making investments using its scouting model. The focus of the first fund is on investing in global themes of health, future of living and consumer models – always underpinned by defensible technologies.

Ada has made seven investments to date, five of which the fund has led. These are Predina, a road traffic accident risk monitoring technology; Inoviv, a companion diagnostics tool; Motley, a vertically-integrated jewellery company; Ferly, a women sexual wellbeing company; Huboo, a multi-channel fulfillment service for e-commerce businesses; Polipop, the world’s first flushable sanitary pad, and Juno Bio, which is working on decoding the vaginal microbiome to increase the success of IVF.

Of the seven investments Ada has made to date, for each £1 invested:

  • 29p has gone to all-female founding teams (two companies, Motley and Ferly) – versus 1p from the rest of VC in 2017.
  • 29p has gone to all-male founding teams (two companies, Huboo and Inoviv) – versus 89p from the rest of VC in 2017.
  • 42p has gone to female/male founding teams (three companies, Juno, Predina and Polipop) – versus 10p from the rest of VC in 2017.[7]

Ada’s steering group and advisers

The fund is supported by a diverse and world-class steering group who support with day-to-day operations of the fund, and an expert operating network, who support portfolio companies.

The steering group includes pre-eminent West Coast pre-seed investor Charles Hudson, founding partner of Precursor Ventures; partner at top European VC fund, Northzone, Marta Sjögren; partner at top New York tech law firm Lowenstein Sandler and serial Angel Investor Ed Zimmerman; limited partner Michelle Ashworth; and Facebook executive and angel investor Ahmed Medhat.

Ada Scouts

To ensure Ada Ventures is in the best possible position to succeed on this mission of building the most diverse pipeline in Europe, the firm has built a unique grassroots sourcing model, based on a network of well-connected scouts that are incentivised to bring deals to the firm.

Ada’s Scout network will not only reward scouts for surfacing deals, with both an immediate and longer term incentive, but will empower a generation of diverse entrepreneurs and community leaders to become investors, equipping them with the capital, support and resources they need.

Ada launches with 45 scouts already in place, which includes the leaders of Hustle Crew, a for-profit working to make the tech industry more inclusive, Muslamic Makers, a community of Muslims in tech, Yena, the Young Entrepreneurs Networking Association, and YSYS a thriving community of entrepreneurs from a diverse range of backgrounds.

If Ada Ventures invests in the company, the Scout in question is incentivised by a finder’s fee which they can invest directly into the company, or take as cash. Ada has made one investment and agreed terms on another using the scouting model so far.

Ada Ventures

Ada Ventures is a seed fund focused on overlooked customers and overlooked markets. Ada Ventures is managed by Ada Partners LLP as a limited liability partnership incorporated in England and Wales, Partnership No. OC423404. Ada Partners is Authorised and Regulated by the Financial Conduct Authority. Ada Ventures was advised on the fundraise by Morrison & Foerster, NCM Fund Services, Rees Pollock and Silicon Valley Bank.

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank programmes are supporting more than £7.0bn of finance to over 91,000 smaller businesses (as at end of June 2019).

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses:

  • The Business Finance Guide (published in partnership with the ICAEW and a further 21 business and finance organisations) impartially sets out the range of finance options available to businesses at all stages – from start-ups to SMEs and growing mid-sized companies. Businesses can take the interactive journey at thebusinessfinanceguide.co.uk.
  • The new British Business Bank Finance Hub provides independent and impartial information to high-growth businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. The new site also features case studies and learnings from real businesses to guide businesses through the process of applying for growth finance.

As the holding company of the group operating under the trading name of British Business Bank, British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.

British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.

Enterprise Capital Funds are administered by British Business Finance Ltd, a wholly owned subsidiary of British Business Bank plc.

The funding from British Business Finance Ltd to Ada Ventures does not amount to any endorsement or warranty from British Business Finance Ltd, the British Business Bank plc, or the government of the UK.

British Business Bank Enterprise Capital Funds (ECFs) are managed by experienced fund managers from a variety of backgrounds – including teams from the venture capital industry as well as serial entrepreneurs with a history of success in building early stage UK companies.

They are commercially-focused funds which bring together private and public money to make equity investments in high growth businesses. The British Business Bank’s rolling investment programme of commitments to new Enterprise Capital Funds is a competitive process, with typically 2 to 3 investments made per year. The Ada Ventures I LP fund is the 30th ECF in the programme.

[1] Atomico, State of European Tech, 2019 https://2019.stateofeuropeantech.com/

[2] Atomico, State of European Tech, 2019 https://2019.stateofeuropeantech.com/

[3] Atomico, State of European Tech, 2019 https://2019.stateofeuropeantech.com/

[4] Britsih Business Bank, BVCA, Diversity VC, Female Founders and VCs, 2019 http://www.diversity.vc/femalefounders/

[5] London & Partners and Pitchbook, 2018

[6] Polipop is an Ada concept portfolio company.

[7] All statistics from British Business Bank, BVCA and Diversity VC Female Founders and VCs report http://www.diversity.vc/femalefounders/