Kindred Capital, which lets portfolio company entrepreneurs share its fund carry, closes £81m Fund II

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Kindred Capital has hit an £81m final close for its second seed-stage European tech fund, doubling its capital under management.

The firm’s second fund is ever so slightly larger than the £80m debut vehicle it closed two years ago.

Since the firm’s 2015 launch it has backed 39 tech companies across Europe and Israel, including ten from the second fund, which has been actively investing for the past 12 months.

Deals done by Fund II to date include BotsAndUs, Gravity Sketch and Beit.

Kindred runs what it calls an ‘equitable venture’ model, which gives entrepreneurs in the fund’s portfolio businesses a share in its carried interest.

The firm projects that around £5m will be returned to founders involved in Fund I, which would otherwise have gone to the general partners of Kindred.

It has also had a positive impact on investment activity, the firm said, with entrepreneurs sourcing 38% of Kindred’s dealflow at the top of the funnel.

Fund I made 29 investments across Europe, including Five, Paddle, Pollen, Farewill, and Disperse.

Firm partner Leila Zegna said, “We originally entered the UK seed stage ecosystem with ambitious goals, to invest in around thirty high quality UK technology companies per fund, and to introduce Equitable Venture as a totally new way of practicing our craft.

“We look forward to working with many more phenomenal companies on the road ahead.”

LP commitments to Fund II included a £20m anchor investment from British Patient Capital.

The investment followed a cornerstone commitment by BPC to the manager’s inaugural fund in 2017.

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