EXCLUSIVE: London-based VC Beringea is looking to back around eight new companies with investments of between £2m and £10m in 2023.
In total, the VC is likely to make between 10 and 15 deals including follow-on investments at Series A and Series B stage but can invest as early as seed stage.
Beringea is a transatlantic investor and one of the firm’s main USPs is helping founders with US expansion.
The firm has three funds: two VCTs in the UK and an LP fund in the US. The funds have existed for over 20 years and were created to help UK entrepreneurs go to the US and vice versa.
The three funds add up to more than £700m and consist of around 70 portfolio companies in markets such as SaaS, B2B marketplaces, AI, data and climate tech.
Beringea had a record-breaking year last year, deploying more than £50m and Maria Wagner, a partner at the firm, expects 2023 to be similar.
“I think it’s going to be close to that amount if not the same,” she told Growth Business. “It’s the same quality of companies that we were seeing last year and valuations have come down so it’s actually a better market to be investing in.
“We’ve been through a couple of recessions before, so we’re not afraid to be investing during them – some of our best investments were made during the last recession. We’re planning on being as active as before but we’re being more conservative on valuations.
“On the portfolio side we’re asking companies to increase their runway as much as possible and have flexibility in terms of when they go to market.”
The business models the London VC takes an interest in include SaaS, consumer and B2B marketplaces. “We are generalists but we have done deep dives into AI, data-led businesses, B2B marketplaces, climate tech, femtech and telehealth,” Wagner says. “They’re some of the sub-sectors we find quite interesting … but if a good opportunity presents itself from a different sector, we’ll definitely look at it.”
‘We’ve been through a couple of recessions before, so we’re not afraid to be investing during them – some of our best investments were made during the last recession’Beringea partner Maria Wagner
However, Beringea will be more cautious with construction, retail and travel in 2023 because of shaky consumer confidence, she said.
Last year also saw Beringea recognised for diversity and inclusion by a certification that considers hiring practices, culture, investment strategy and portfolio management.
“We’re increasing the pipeline so we can see more women,” Wagner says. “It’s a difficult thing to change overnight but the VC industry is aware of the issue and finding ways to attract more women.
“A Pitchbook report found women-founded businesses perform better than male-founded ones and reports like that help … If we can get better returns with women-led businesses that’s a great statistic to know.”
Beringea is also keen to continue investing outside of London.
“We get a lot more deal flow as a result and northern companies in particular tend to be more capital efficient and less bootstrapped, which I think in this climate investors are looking for, so I think we’ll see more deals going to those companies in the future,” she said.
Wagner has been in the investment industry since 2008. Before joining Beringea in 2015 she was at private equity firm GMT Partners and launched beauty box and e-commerce brand Birchbox.
In her time at the Covent Garden-based VC she has enjoyed multiple successes, including the exits of buyer behaviour firm Zoovu; Blis, an advertising start-up which defines digital audiences, and second-hand watch search engine Watchfinder.
As for the current climate: “I’d encourage founders to keep raising – things are not as bad as they might seem,” she reassures. “Good companies will still get funded, and this recession will take a while, so you can’t put on everything on hold and wait for the recession to finish.
“The valuations of 2021 may never come back. We need to accept the new status quo and carry on building great businesses.”
What Beringea looks for in founders:
Passion: “Ability to drive the business forward because it’s not easy, there’s different issues every day and passion to drive the team – almost contagious passion.”
Self-awareness: “Knowing what they’re good and not good at because it’s important to fill the gaps in what they don’t have. No founder has every trait it takes to build a business so it’s important to know who to hire and when.”
Grit and resilience: “Being able to get bad news and back on their horse and keep going and not give up. You have so many ups and downs growing a business.”