In the world of startups, it is not uncommon for talent from successful companies to go on to found their own companies. This is particularly evident in the fintech space in Europe, where graduates from unicorns such as Monzo, N26, Revolut and others have founded a number of new companies.
Andrena Ventures, a UK-based solo GP fund, aims to support this startup factory snowball effect by investing in such second-generation startups at the pre-seed and seed stages. To this end, the company has raised $12 million from backers including several VCs and entrepreneurs.
The company’s general partner, Gideon Valkin, told TechCrunch that while he will fund talent with roots in European and UK fintech, Andrena itself is industry agnostic. He expects most of his portfolio companies to focus on other categories such as AI, climate technology and B2B business solutions.
Andrena has already made its first investment: Nustom, an AI startup founded by Monzo co-founder Jonas Templestein, who Valkin reported to when he worked at Monzo. Nustom hasn’t launched publicly yet (which its succinct website explains) but already has a long list of investors, including OpenAI, Balaji Srinivasan, Garry Tan, Naval Ravikant, and others.
Andrena’s participation in Nustom’s party round reflects the company’s thesis and strategy: most often it will donate between $100,000 and $400,000 to rounds led by others. However, Valkin hopes his network will make it easier for founders to raise Series A rounds, perhaps from his limited partners or from other investors he is connected to.
The solo GP approach
By leveraging its network and writing relatively small checks, Valkin hopes to gain access to hot deals that larger funds may not be able or willing to participate in.
A small fund means that small investments have the potential to recover all invested capital; For a larger company, such investments would neither make the difference nor be worth the risk. Valkin knows this side of the equation: After leaving Monzo, he became an angel investor himself and began working as a seed investor at VC firm Entrée Capital, which is now one of Andrena’s limited partners.
However, managing a solo fund is not without its challenges, and not just because the management fees are relatively lower. As my colleague Rebecca Szkutak noted last year, “Aspiring managers have found themselves on the same rollercoaster ride as startups in recent years.”
Valkin says he took a significant pay cut, but he sees an advantage in that: Founders can see him as a trusted partner with just as much at stake. “I think this brings us together really well,” he said. Its value proposition is to open its network to founders and help them raise a Series A round, while relying on its operational expertise.
This mix is more common in the US than in Europe, where many local VCs have never founded a company. But things are changing, and angel investing is becoming increasingly common among European entrepreneurs, particularly in the fintech space.
One of Andrena’s LPs, Taavet+Sten, is an investment vehicle run by Wise co-founder Taavet Hinrikus and Teleport co-founder Sten Tamkivi. Both are former Skype employees and, together with two other partners, have now officially launched an early-stage venture fund called Plural.
The fact that the couple decided to support Valkin can be seen as confirmation of his thesis. As hordes of early fintech employees look for their next challenge, the name Valkin chose for his company is apt: Andrena is a species of bee, and “pollination, in my opinion, is probably the best analogy for what I do,” he said.