Kindred Capital raises £80m to back early-stage tech startups

Kindred Capital, a backer of UK tech companies such as FiveAi, Kalo and Paddle, has closed a £80m Seed investment fund.

The firm is led by veteran entrepreneurs Leila Zegna (part of the founding team of GenapSys); Tracy Doree (co-founder and CEO of e-commerce brand LLUSTRE, exited in 2012); Mark Evans (an investor in firms including OakNorth and Betfair); and Russell Buckley (angel investor and part of the founding team of AdMob, which sold to Google for $750m in 2010).

Kindred Capital is launching an equitable venture model, meaning that every portfolio company’s founder will become a co-owner of the fund that’s invested in them.

Once investors have received their returns, 20% of the fund’s profits will be distributed among founders.

Partner Russell Buckley commented on the fund’s closure.

“We’re delighted to have closed our first fund of £80m, which was our ambitious target from the start. This will allow us to make a substantial impact on the Seed stage ecosystem in the UK.

“We will invest in around 35 companies in total, keeping 70% of the fund for future follow on rounds in our portfolio companies, to ensure they have adequate funds in the vital early years.

“While it’s early days, our Equitable Venture and founder-centric approach seems to be paying off, with many of our first investments going on to raise further funding at significantly higher valuations from the likes of First Round Capital, Venrock, Spark, and Notion.”

Stan Boland, CEO and founder of FiveAI, went on to comment: “When deciding which investor we wanted to work with, we were looking for a real partnership with a company that shared our conviction and offered real support on our entrepreneurial journey.

“We’re really pleased that we chose Kindred, not least because their equitable venture model means that we’re surrounded by an army of other founders incentivised to help us win.”

Catherine Lewis La Torre, chief executive of British Business Investments, a major investor in the fund, said: “As the commercial arm of the British Business Bank, we support financial innovation and diversity in debt and equity markets.

“Kindred’s innovative fund model provides just that and we’re delighted to support their first seed fund. Our investment in this new vehicle means that more startups will be able to access the equity funding they need to grow and succeed,” she concluded.