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Fly Ventures raises $41m to back early-stage startups across Europe


Berlin-based Fly Ventures, which will use AI and machine learning to identify investment opportunities, has raised $41m to back early-stage startups across Europe.

Fly’s three partners, Stephan Seyboth, Gabriel Matuschka and Fredrik Bergenlid created the firm in a bid to disrupt the early-Seed VC industry.

By using AI, Fly is able to find and approach startups with a digital footprint, before they begin fundraising.

According to the firm, Fly’s proprietary software is able to find over 1,000 new companies a week.

Fly has so far backed 11 companies, targeting businesses raising between $1m and $2.5m.

The fund drew investment from limited partners including the European Investment Fund, Korelya Capital and several family offices based in Europe and the US.

Stephan Seyboth, co-founder and general partner at Fly Ventures, said: “Venture capital investors preach innovation and disruption and tell us that software is eating the world yet when it comes to their own industry they believe that it is exempt. We believe there are significant opportunities for automation here as well.”

“We think that artificial intelligence will remove the mundane parts of many jobs and that includes sifting through vast numbers of leads, to find appropriate startups to invest in at Seed stage,” he added.

Gabriel Matuschka, co-founder and general partner, spoke about the state of Europe’s funding landscape: “There is a funding gap in Europe at the Seed-stage, which causes problems for entrepreneurs. They spend too long trying to raise funding when they should be concentrating on making their product work. By using technology at this point to get through a lot of sifting and evaluation, we can scale the seed-stage and help bring entrepreneurs to a successful series A fundraising with a top-tier venture capital investor.”

“Traditional early-stage investing relies on four guys sitting around a table, which limits the portfolio size to around 30. However, by using technology effectively we can handle a much larger portfolio. With more data, we can make better decisions and that means a better outcome both for founders and for the limited partners who invest in us,” Matuschka said.

Fly Ventures is strongly focused on AI companies that have a high degree of automation through software.

Fly has to date invested in a range of sectors, including finance, HR and recruiting, mobility and health. It is also investing in enabling tech and platform businesses.

Recent investments in the UK include Bloomsbury AI, which is developing technology to read legal, insurance and financial documents and answer questions on them.

Fly’s three co-founders have have worked at some of Europe’s biggest venture capital investors and tech companies. Matuschka, headed up the Berlin office of Partech Ventures for three years. Before that he was co-founder of venture-backed TripHunter (acquired by brands4friends / eBay).

Seyboth was formerly product manager at Google for seven years, leading products in Maps and Search. Prior to that he worked as a software engineer, engineering lead, co-founder and CTO in different startups.