Thema launches venture fund platform to invest and support emerging managers

Thema, the London-based, Pan European focused VC fund investor, has publicly launched its venture fund platform, to support and provide capital to first time fund managers to start their own venture capital business.

Set up to be a catalyst for the next wave of emerging managers, Thema will support and enable emerging managers to launch venture capital strategies, providing them with an all-in-one package. Thema will act as a strategic cornerstone limited partner, writing first tickets of up to £5 million, operational and regulatory support, office space and curated LP insights. Thema plans to make commitments to four funds annually for the next three years.

Thema is targeting fund managers with existing strong track records as venture capitalists, angel investors, ex-entrepreneurs and/or senior operators and community builders from the UK and Europe looking to launch their own standalone VC fund as GPs for the first time. Entering into the VC space often involves significant barriers in terms of capital, resources and insights, limiting accessibility. Thema aims to address these challenges by extending its reduced setup costs and operational package to the wider market, resulting in an average reduction of first-year costs by 41%, as per Thema’s analysis of comparable market offerings. The approach aims to enhance meritocracy within the VC industry.

Set up by Sam Ettelaie, Co-founder at Thema, Ettelaie worked for the UK's largest limited partner - the British Business Bank - for over six years. He has deployed over £400 million of capital to first-time and emerging fund managers, leading cornerstone investments into a plethora of funds including the first institutional funds of Concept Ventures, JamJar Investments, Ada Ventures, and many more. This enabled him to see the challenges associated with raising capital as a first-time GP and the gap in the UK and European ecosystem for a platform like Thema. Co-founder alongside him is George Askew, who was an emerging manager himself and is an operationally experienced VC, building, investing and launching companies, including Cell Capital, Force Over Mass and European Travel Ventures. Before launching publicly, he’s already helped launch funds in the technology sector including agriculture, blockchain, and national security.

Sam Ettelaie, Co-founder and Partner at Thema commented: "At Thema, we empower talented individuals to launch their VC entity. We’re making the process of raising a fund fairer, so those with the best idea can make them a reality. One of the key reasons for setting up Thema was to address the barriers to entry associated with setting up a VC entity, including diversity and socioeconomic factors, while maintaining a transparent and level playing field. Beyond providing financial backing as an LP, our team is focused on sharing expertise and offering support to all our partners. We are excited to help our partners in the early stages of their growth journey bringing visionary strategies to life.”

George Askew, Co-founder and Partner at Thema added: “Having been an emerging manager, I witnessed first hand the operational complexity of running a fund, and how much time this draws from investment activity. A platform and programme like Thema didn't exist, so we've built it. Whilst Family Offices have increased their exposure to Venture as an asset class in the last ten years, there is still a long way to go in understanding the opportunity and benefits with emerging managers.”

A team of four, Thema understands the complexities involved when launching a venture capital fund (significant time commitment and upfront costs, including legal and operational expenses) and offer assistance to emerging fund managers in navigating the regulatory landscape, fund administration and capital. Thema acknowledges that GP commitment and the cost associated with raising a fund are a substantial financial barrier to entry, particularly with family office investors looking for a significant % of capital to be stumped up by GPs as to show alignment ('skin in the game'). Additionally, Thema has seen first-hand the lack of willingness from investors to be the first anchor investor. Thema will act as a catalytic investor, being a first-cheque LP and using an innovative model to mitigate some of the barriers associated with the venture asset class.

Findings from Thema’s proprietary dataset, comprising audited returns data from 112 fund managers operating in Europe with a fund vintage of 2014-2017, indicate that entities raising £0-£50 million tend to outperform those managing larger funds. A notable divergence is observed when funds surpass the £200 million mark, with returns being c.30% lower than smaller funds.

These findings are in harmony with observations from a US Fund of Funds (FoF) investing in 180 emerging managers partnerships revealing that these entities tend to outperform their established counterparts. Furthermore, Cambridge Associate data highlights that newly established and developing fund managers consistently rank among the best performers, achieving this status in 9 out of 13 years. This data collectively underscores the strength and potential of the European venture capital ecosystem.

According to data from Invest Europe and Cambridge Associates, European venture capital has demonstrated the strongest multiple of invested capital returns for investors, boasting a 2.53x return compared to North American funds which achieved a slightly lower 2.39x return. Additionally, data from the European Investment Fund (EIF) provides reassurance that the European VC landscape has evolved and matured since the 2008 recession. It suggests that top quartile funds in the EU can be expected to yield an average return exceeding 20%.

In recent years, only 8% of European VCs have any operational experience compared to the US which is 60%, which in the opinion of the team behind launching Thema, is a crucial experience when working and investing into portfolio companies. Thema will help the best-emerging managers launch more effectively, whilst providing the highest level of due diligence by the former Senior Investment Manager from the UK’s most active Fund LP (British Business Bank) catering to the increase in demand to deploy capital into the sector with each manager having their unique edge.