London-listed Draper Esprit to double down on European tech with £100m share placing

Venture capital firm Draper Esprit has today announced it will acquire a larger stake in funds managed by its European counterpart Earlybird, with the intention of raising £100m through a fresh share placing to finance the move.

The London-listed tech investor first partnered with Earlybird in July last year, committing up to £76m into the German firm's Earlybird Fund VI until 2022.

It has today conditionally agreed to take a 27 per cent stake in Earlybird VI for approximately £55m, and a separate five per cent interest in its Digital East Fund for £16m. As a result, Draper will hold several new tech firms within its portfolio, including so-called unicorn artificial intelligence startup Uipath.

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Draper said the deal hinges on the £100m share placing being admitted to trading on London's Alternative Investment Market and its European equivalent, which was also launched today. Some of the money raised will go back into Earlybird's funds to invest in early and growth-stage European tech firms.

The news marks a step closer towards allowing Draper to expand into Europe without needing to establish its own base on the continent, a plan that the firm previously alluded to when it reported strong annual profits at the end of May.

The venture capital magnate has previously backed in the likes of popular British businesses Revolut, Crowdcube and Transferwise, while Earlybird holds a stake in German banking challenger N26, which was recently valued at $2.7bn after raising a $300m round.

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"We passionately believe in the potential for Europe to become a high-tech powerhouse and are putting our money where our mouth is by furthering our strategic partnership with Earlybird," said Simon Cook, chief executive of Draper Esprit. 

"This allows us to cement our position as a leading VC in Europe, whilst simultaneously offering investors access to exciting and high quality underlying assets."

Cook added that the new acquisitions were an "exceptional opportunity" made available to the firm through its partnership with Earlybird, with today's fundraising being used to support its future pipeline of investments.