Instead of raising a new fund, Global Founders Capital will use Rocket Internet funds

Global founders’ capitala Berlin-based early-stage VC firm with close ties to German startup factory Rocket Internet will develop into the enterprise arm of Rocket Internet.

The VC had previously raised two $1 billion funds, and just a few years ago his name was featured in dozens of deals a yr. But then the situation calmed down. Now we all know why: in the longer term, the corporate will invest exclusively from Rocket Internet’s balance sheet.

Last yr Financial Times. announced that Global Founders Capital is within the midst of a major strategic change. A couple of weeks ago, the VC firm reached out to TechCrunch to verify the pivot and discuss the reasoning behind the change.

“To be transparent, there have been quite a few changes at Global Founders Capital in recent years – in terms of fund structure and team composition,” Global Founders Capital partner David Sainteff (pictured above) told us.

Sainteff said the corporate has decided it shouldn’t be the fitting time to lift one other fund since it shouldn’t be a good time to speculate since it doesn’t imagine there are numerous good opportunities that meet the corporate’s criteria and that it doesn’t need more capital to retain competing against other investors to shut a deal.

Global Founders Capital was originally structured as a traditional VC firm with several limited partners participating within the funds. With its first fund, it supported future unicorns comparable to Personio, Revolut and SumUp. With the second fund, the corporate invested in several TechCrunch-covered firms comparable to Pennylane, Ankorstore and Seyna.

Before joining Global Founders Capital seven years ago, Sainteff worked for Rocket Internet he was an investor in Global Founders Capital from the start. Therefore, there was a close bond between them from the very starting.

“After launching the second fund, we decided not to raise another one. Instead, we will use Rocket Internet’s capital,” he confirmed. “We have EUR 300 million on our balance sheet to use for venture investments. We are not planning any collections.”

Honestly, that is a little strange because the corporate’s performance to date seems pretty good. According to Sainteff, the primary fund will generate returns of 3x to 4x. “For the second fund, it is (to say) much too early,” he continued. “But we have some clear winners like Pennylane. We have entered the pre-seed stage and the company is worth over €1 billion.”

The new strategy signifies that Global Founders Capital is now much smaller than it was once, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and, of course, Rocket Internet co-founder and CEO Oliver Samwer.

The new version of the corporate will also focus exclusively on early-stage investments, in addition to opportunities for further investments in later rounds (series A, B, C, etc.).

Has Global Founders Capital decided not to lift a third fund since it didn’t receive sufficient support from potential limited partners or because of the present technology downturn in comparison with 2021 (aside from the AI ​​boom)? The decision probably relied on each aspects.

“It wasn’t the best time to raise funds with (limited partners),” Sainteff told us. “We believe it was difficult to introduce the need for capital.”

“It’s easy to make a decision when you have EUR 300 million in the bank,” he added. “If other VC firms were in the same boat, they would make the same decision. We do not rule out the possibility of obtaining a fund if the conditions are favorable.”

For now, the pivot is reversing much of the fund’s earlier expansion, because it expanded into more geographies, technology areas and financing stages and added the Global Founders Capital name to a number of deals.