Playfair Capital, the UK-focused seed investor, today announces that it has raised its second fund of $32m and is on the hunt for pioneering start-ups with the potential to become world-leading technology companies.
Fund II marks the return to the frontline of investing for one of London’s best-known seed funds, founded in 2013 by Federico Pirzio-Biroli, Playfair’s sole limited partner. Since launch, Playfair has invested in more than 50 companies including Stripe, Ravelin, Thought Machine, CryptoFacilities and Mapillary, as well as marketplace for independent boutiques Trouva and real estate marketplace Appear Here.
With $32m to invest over the next three to five years, Playfair is seeking early-stage companies across all sectors, with a focus on deep tech (artificial intelligence, machine learning and computer vision), B2B SaaS and marketplaces, which have traditionally been areas of strength for the fund. Its initial cheque size is $500,000 but the team engages with founders at the earliest stages of their journey, sometimes investing smaller amounts at the pre-seed stage.
Playfair Capital is distinct among UK seed funds in that all its capital is supplied by Federico Pirzio-Biroli, its chairman. Following a successful period setting up Playfair Capital and leading investments, Federico has moved back to Kenya where he has family interests and has put in place a team to lead Fund II.
True to the fund’s heritage, Chris Smith, an active angel investor for more than a decade, has joined the fund as a partner. Chris takes over management of the fund from Georgia Taylor Foster who has resigned after five successful years with the fund, for health reasons.
Chris was latterly at fast growing B2B telecommunications company plan.com, where he held senior roles including Sales Director, Head of Tech/BI and Head of Product Development. During 2018, revenues at plan.com grew to £50m and the company ranked #1 in the Sunday Time Tech Track 100. As an angel investor Chris has made 14 investments across the UK and US with three exits to date – Nearbuy Systems (acquired by RetailNext), MoPowered (LON:MPM) and Bidstack (LON:BIDS). In a previous life, he spent 10 years in the city, working as a transactional lawyer, and also founded and exited a telecoms business with operations in 12 countries whilst he was at university.
Smith said, “I’m thrilled to be joining Playfair Capital as we announce Fund II. Playfair Capital has developed a reputation for working closely with founders and the angel community to back successful entrepreneurs. The ethos of the fund is very much aligned with how I approached my angel investing. Working closely with Joe and Henrik, we have a fantastic opportunity and I can’t wait to get started on combining the best aspects of angel investing with Playfair’s unique form of patient capital.”
“Our first fund is now five years old and maturing ahead of expectations. Startups in which we have invested like Ravelin, Thought Machine, Mapillary and Numerai are growing strongly and have attracted funding at Series A and beyond from some of the world’s biggest venture capital investors, including Sequoia, Index Ventures and Valar Ventures. And last month Kraken acquired CryptoFacilities in a deal that valued the company at more than $100m.”
Federico Pirzio-Biroli, founder of Playfair Capital, says: “I’m delighted to be announcing Chris’s hire and the launch of Playfair’s Fund II. Our new investment team has great hands-on experience with startups and a track record of backing founders early and enthusiastically. The UK has proved a rich hunting ground for Playfair Capital, providing 80% of our current portfolio. With the new fund we will seek out startups that use deep tech and data to create a defensible proposition that has longevity. We are hugely excited about opportunities in the deep tech, SaaS and marketplace segments where we have already demonstrated success.”
Playfair combines the best aspects of angel investing – enthusiasm, empathy, hands-on experience and speed of decision-making – with the formal structure of a fund that is able to write larger cheques, make follow-on investments and has a bigger team and wider network of contacts. The fund spends a lot of time working with some of the UK’s best-known angels and other funds, both formally as co-investors and informally. During 2019, Playfair will develop this approach with several initiatives including inviting angels who want to work more closely with the fund to take space in its Farringdon headquarters.
Chris will work with Joe Thornton, who has been with Playfair Capital for almost four years, and Henrik Wetter-Sanchez, who joins as an associate from Bank of America Merrill Lynch. Joe joined Playfair in early 2015 having worked at Google and Facebook. After spending three years as Playfair’s head of talent, he now originates and leads deals as well as working closely with portfolio companies on their talent strategies, in particular on leadership hiring. Henrik founded two startups while studying modern and medieval languages at Cambridge University.
Fund II will be invested over the next three to five years, with a significant proportion of capital held back for follow-on investments. At $32m, the fund size has been carefully calibrated to allow the team to devote quality time in supporting each of the founders it backs. While Playfair has a focus on the UK, it will invest in opportunities that arise further afield, with its most recent investments occurring in Israel and Singapore. The fund has invested alongside Atomico, Balderton Capital, Kindred, Passion Capital, Sequoia and Valar Ventures in the last three years.