As it continues its mission to fix deal-sourcing in VC, Ada Ventures launches second fund following £36m first close
Ada Ventures, the early-stage venture capital firm that invests in entrepreneurs with breakthrough ideas, who are solving society’s biggest problems, has successfully reached a £36 million first close of its second fund. Ada’s fast second fund is testament to its LP’s belief in Ada’s unique scout network that uncovers the hidden talent that will build the next generation of global companies.
Ada Ventures successful Fund II fundraise is a reflection of strong performance in Fund I. Overall, Ada’s Fund I has invested in 28 companies, including Huboo, Organise, MOONHUB, SideQuest and Spill. Huboo in particular has grown to scale at impressive speed, most recently raising a £60 million Series B investment. Ada’s Fund I portfolio has raised an aggregate of £100 million in additional investment, from firms including Mubadala, GV and Index Ventures. Not only that, but Ada’s Fund I is amongst the most diverse portfolio of any fund in Europe, with approximately 55% female founders and 30% ethnic minority founders.
Ada Ventures Fund II will focus on funding early-stage entrepreneurs who are solving some of society’s biggest problems, with a special focus on the climate, healthcare and ageing, and economic empowerment.
Check Warner, Founding Partner at Ada Ventures, commented,
“Reaching this milestone of a second fund, backed by some of the biggest names in global venture and now having £84 million under management follows on from the success of our first fund. Investors have seen how we source deals and how we find breakthrough companies making a positive societal impact. They can see our approach works. Not only have we opened opportunities for extraordinary founders, but we have also shown that a more diverse deal flow leads to exceptional returns.”
The investors in Ada Venture Fund II include: a cornerstone commitment from the British Business Bank through its Enterprise Capital Funds programme, Plexo Capital, University of Edinburgh, and a raft of successful entrepreneurs and investors including Taavet+Sten and the Supercell co-founders.
Established in 2006, the British Business Bank’s Enterprise Capital Funds programme aims to increase the supply of equity capital to high-potential, early-stage UK companies by supporting new and emerging VC fund managers who target the early stage equity gap.
Ada Ventures has been an innovator in how it sources deals through its scout network. There are 100 Ada Scouts – most are active within under-represented communities – who are sourcing opportunities and identifying visionary founders that need access to capital. This approach has successfully removed the need for a ‘warm introduction’, through previously established connections, which has been a hurdle for under-represented founders in accessing funding.
Should Ada Ventures invest in a company introduced by a scout, the scout is compensated with both an upfront fee, and a share of carried interest that the startup generates for the fund. In its first fund, nine of the 28 investments came through this scout network. In recent months the reach of the Ada Scouts has been growing with a focus on the LGBTQ+ community, disabled entrepreneurs, and regions outside London.
Ada Ventures also launched Ada’s Angels in October 2020, which was a project that sought to bring more diverse people into angel investing. The programme identified five individuals from the Ada Scout network with direct experience in under-represented communities, who were given £50,000 to make five investments of £10,000. Since launch, the cohort has made 22 angel investments, 6 of which then raised funding from Ada Ventures. All 6 of these companies are founded by entrepreneurs from backgrounds that are currently underrepresented in tech and VC. Ada will launch Ada’s Angels second cohort at AdaCon. Ada’s Angels second cohort will be more than double the size of the first and select angels from across the whole of the UK.
Check Warner, Founding Partner at Ada Ventures, said:
“For all of the innovation in the industry, there is nowhere near enough innovation in VC. We are delighted to launch Fund II, as it demonstrates that our unique and original deal-sourcing system works. When we were building Fund I, we knew we needed to depart from the traditional way of sourcing-deals. So we tore up the rule-book, and deployed Scout and Angels programmes, which revolutionised our own deal sourcing, and led to us meeting founders we would not have seen. We are constantly working to improve our deal-sourcing programmes and methodology, but we are proud to say that it is fairer, it works towards creating fairer access to VC funding, and it leads to phenomenal returns. It works, and it’s great to see the LP community recognising that.”
So far, Ada Ventures has sourced nine companies through its scout network. These include SPOKE, Bubble, Sproutl, Flexa and MOONHUB. Ada Ventures’ scout programme opens for applications twice a year.
Warner explained how the fund is on the lookout for visionary thinkers with breakthrough ideas:
“Ada Ventures takes its name – and inspiration – from the mathematician Ada Lovelace, who worked on the first computer, but wasn’t recognised for her contributions until 100 years later. Like Ada, we are looking for bright minds, who can bring their visionary thinking to solve the biggest problems of our age.”
Matt Penneycard, Founding Partner at Ada Ventures added,
“We have intentionally built Ada Ventures so that it is accessible to everyone, and anyone – wherever they are – can be involved in the process of venture capital without needing to rely on an existing network of contacts. Everyone and their ideas are welcomed at Ada Ventures. This approach has proven to be beneficial for the companies in our portfolio, and for investors.”
Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, said:
“The British Business Bank’s Enterprise Capital Funds programme is key in helping to develop and maintain effective venture capital provision in the UK, lowering the barriers to entry for emerging fund managers and for those targeting under-served areas of the market. The programme currently invests in more than 39 funds with over £1.8 billion of finance, supporting more than 700 businesses. Following our commitment to Fund I in 2019, we are pleased to make a cornerstone commitment to Ada’s second Fund to help Ada invest in a diverse range of businesses and founders.’’
Speaking about working with Ada Ventures, Dami Hastrup, Founder and CEO of MOONHUB, says
“Our experience with Ada has been great, and we have particularly benefited from the scout program and Ada’s Angels. We worked with David Fasiyo — he understood our value proposition very quickly, and made the call to Matt, and the rest of history! The process was swift, and transparent, and we’re delighted to be working with the Ada team!”
Speaking about Ada’s scout programme, Pia Horbacki, Enterprise Manager, Psychology and Language Sciences, University College London, says
‘As part of the Behavioural Insights Exchange at UCL, students complete their Masters research project with an external organisation. BIX is a win-win initiative: students do a project that has real-world impact and gain valuable skills, while our partner organisations benefit from access to UCL’s top-calibre students, who deliver tailored, data-driven insights. In this case, Izzy Soper worked with Ada Ventures to understand how increasing the diversity of venture capital scouts influences the decision making associated with recommending founders to pitch to investors. It was found that, to a certain extent, VC scouts are more likely to recommend founders that share the same gender or ethnicity, thus showing that Ada Ventures’ endeavour to increase the diversity of investments using scouts has been successful”
Notes to editors:
About Ada Ventures
Ada Ventures is an early-stage fund that supports founders with breakthrough ideas, typically with a first investment of £500k. Ada’s mission is to make venture capital accessible to the best entrepreneurial talent in the UK and aims to have the most diverse pipeline, and portfolio, of any fund in Europe. The fund was co-founded by Check Warner and Matt Penneycard, who are equal partners, and over 20 years combined experience in venture capital investing.
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 drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. 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’s core programmes support over £8.5 billion ¹ of finance to almost 95,000 smaller businesses ² . The British Business Bank is responsible for running the government’s Coronavirus business loan schemes and Future Fund, together responsible for delivering £80.4 billion of finance to 1.67 million businesses. The schemes are now closed to new applications.
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 British Business Bank Finance Hub provides independent and impartial information to businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. In light of the coronavirus pandemic and EU Exit, the Finance Hub has expanded and it now targets a wider business audience. It continues to provide information and support for scale-up, high growth and potential high growth businesses, but now provides increased content, information and products for businesses in survival and recovery mindsets. The Finance Hub has been redesigned and repositioned to reflect this, during this period of economic uncertainty.
British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at the British Business Bank.
The investment from British Business Bank to Ada Ventures does not amount to any endorsement or warranty from the British Business Bank plc, or the government of the UK.
Enterprise Capital Funds are administered by British Business Finance Ltd, a wholly owned subsidiary of British Business Bank plc.
¹ Figures as of 31 March 2021
² Figures as of 31 March 2021