Cathay Innovation launches third multi-stage startup fund at $1B – TechCrunch


World enterprise capital agency Cathay Innovation has introduced its third fund, concentrating on €1 billion ($1.05 billion) at a broad gamut of firms and applied sciences world wide.

With Fund III, Cathay Innovation launches what is going to certainly be one of many largest multi-stage VC funds to emerge from Europe as soon as it closes, encompassing sequence A, B, and later-stage startups. The corporate stated that it intends to function lead- or co-investor, with investments starting from $5 million to round $80 million in dimension.

The brand new fund follows its $550 million second fund back in 2020, which — just like the inaugural fund earlier than that — was additionally a multi-stage fund. In tandem, Cathay Innovation, which is a part of the broader private-equity outfit often known as Cathay Capital, has additionally been getting into vertical-specific industries, having simply final month launched a new $110 million fund directed on the crypto sector. The month earlier than that, Cathay Capital itself launched a $500 million health fund.

So towards a backdrop of economic downturns, startup recessions, and VC trepidation, evidently somebody, someplace at Cathay Towers could have missed the memo.

“Regardless of the present market circumstances and uncertainty, we’re sturdy believers that the digital revolution will solely proceed to speed up, and that main tech firms will do extraordinarily effectively, exhibiting sturdy progress and pricing energy,” Cathay Innovation CEO and cofounder Denis Barrier informed TechCrunch. “Within the subsequent ten years, all industries face huge change as fashionable digital infrastructure higher hyperlinks merchandise, buyer wants and the broader worth chain. Consequently, in the present day’s markets shall be redefined and the businesses who cope effectively with digital transformation could have the chance to guide a lot bigger markets than earlier than.”

Cathay Innovation cofounder and CEO Denis Barrier

Cathay Innovation’s focus is about as broad because it will get, spanning nearly each nook of the economic spectrum, from fintech and mobility, to retail and vitality. However behind what at first would possibly seem like a scattergun funding ethos, there’s a technique. Companies usually must forge relationships with complementary firms from different industries, for instance as provide chain companions and even as paying clients, so by investing in a such a variety of companies, Cathay will help construct bridges throughout sectors.

“We particularly constructed our funds to incorporate a various ecosystem of main multi-sector companies as not solely LPs (restricted companions), however as strategic companions to assist tailor our funding thesis to industries resembling healthcare, finance, client, vitality, mobility and logistics,” Barrier defined. “This has a number of advantages, because it grants entry to invaluable {industry} experience and permits for cross-industry fertilization; it connects startups to potential companions or vital clients that may assist them scale; and it helps enhance the digital transformation efforts of our company companions whereas bringing innovation to life in real-world industries.”

The core focus of the brand new fund shall be on sequence A and B rounds, nevertheless the corporate stated that it plans to carry sufficient reserves for later progress rounds, and can goal investments at firms that fall beneath the U.N.’s Sustainable Development Goals, incorporating good well being and wellbeing; first rate work and financial progress; {industry}, innovation and infrastructure; and local weather.

World norming

Whereas Cathay Innovation is not at all a location-specific fund, its roots lie firmly in Europe having initially arrange store in Paris again in 2015 the place Barrier is now primarily based. Greater than half of Cathay Innovation’s international staff — amounting to just about 30 people — are additionally primarily based in Europe, and greater than one-third of its portfolio companies additionally hail from Europe.

“Whereas we make investments globally, with our marquee funds primarily masking Europe, North America and Asia, we’ve all the time maintained a powerful European presence when it comes to native staff, LPs and portfolio firms,” Barrier stated. “We’ve invested in lots of main European startups.”

Cathay Innovation’s Paris-based staff

Many of those startups have gone on to realize notable exits, together with Spanish electrical car charging startup Wallbox, which now trades on the New York Stock Exchange, and supply firm Glovo which was recently acquired by Delivery Hero. Extra broadly, Cathay Innovation has invested in 120 firms, delivering two IPOs, 5 acquisitions, and 19 unicorns within the course of.

That every one stated, since its inception seven years in the past, Cathay Innovation has expanded with new places of work and groups in North America, Asia, and Africa, giving the VC agency inroads into profitable markets in all places.

“We began Cathay Innovation to again rising startups reworking key industries and with the assumption that one of the best improvements come from all corners of the world — which can proceed with Fund III,” Barrier added.

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