Ada Ventures Closes $50M Fund for Diverse Founders

Just one year ago, Ada Ventures – a UK and European venture capital firm with a focus on investments that generate positive societal change – publicly launched at Techcrunch Disrupt. (A recording of that initial launch event is available below.)

Ada Ventures today announced the successful closing of its inaugural fund, totaling $50 million. Key limited partners contributing to the fund include Big Society Capital and the British Business Bank.

Check Warner, a co-founding partner at Ada Ventures, stated that the fund was significantly oversubscribed. “Initially, we weren’t certain we could secure $30 million. To ultimately reach $50 million, exceeding our initial target of 35 million pounds, is a substantial achievement.” The final $16 million for the fund was secured entirely through virtual meetings during the 2020 pandemic.

Designed as a ‘first-cheque’ seed fund, Ada Ventures is addressing a significant challenge often created within the venture capital industry: the tendency for investors to fund individuals who resemble themselves, potentially overlooking a vast pool of talent. The firm aims to invest in the most promising individuals across the UK and Europe, irrespective of their race, gender, or background, with a specific focus on “building the most inclusive pipeline and portfolio in the region” while addressing critical issues such as mental health, obesity, workers’ rights, and access to affordable childcare.

The firm is making considerable progress toward this goal. In 2020, Ada Ventures invested in eight early-stage companies focused on these areas. Four of these companies are led by female CEOs, bringing the total portfolio size to 17, including companies funded prior to the official fund launch.

Regarding portfolio company performance, Huboo Technologies successfully raised a £14m Series A round, led by Stride VC and Hearst Ventures; Bubble provided thousands of hours of free childcare services to National Health Service personnel; and Organise expanded its membership from 70,000 to over 900,000, and actively advocated for government support for self-employed individuals during the Covid-19 crisis.

This October, coinciding with Ada Lovelace Day, Ada Ventures introduced its own Angel program, empowering five new Angel investors to make their initial investments. This initiative mirrors similar programs offered by other venture capital firms. Additionally, the firm has cultivated a network of 58 ‘Ada Scouts,’ who contribute approximately 20% of the firm’s deal flow, with two portfolio companies already sourced through this network.

However, this scout network distinguishes itself from others. Ada’s Scout community includes representatives from Hustle Crew, an organization dedicated to fostering inclusivity within the tech sector, and Muslamic Makers, a community for Muslim professionals in technology.

Ada Ventures plans to expand its network of Ada Scouts throughout the UK in 2021, with a particular emphasis on engaging with the LGBTQ+ community, entrepreneurs with disabilities, and regions beyond London.

As Warner explained, the Scout network is more than symbolic: “We’ve connected with organizations like the Iranian Women’s Association and Islamic Makers, and other groups underrepresented in tech and venture capital. These groups provide us with potential investment opportunities, and we compensate them with both an initial cash payment and a share of the fund’s carried interest if we invest in those companies. This differs from many other scout programs, which primarily engage existing investors. We are enabling a new group of individuals to access venture capital, involving them in our due diligence process, and gaining valuable insights into markets we may not fully understand, such as Shariya finance.” Warner further stated that the 58 scouts currently generate between 10 and 20% of the firm’s deal flow each month.

Warner added: “We could not have foreseen the significant changes and hardships brought about by Covid-19, or the social unrest following the death of George Floyd, when we launched. These events have underscored the importance – and urgency – of the Ada Ventures strategy during the first year of deploying capital from Fund I.”

In an exclusive discussion with TechCrunch, Warner and co-founder Matt Penneycard clarified that while the fund is not formally ‘designated’ as an ‘Impact fund,’ it shares a similar philosophy.

Penneycard explained: “The distinction often depends on how the investor chooses to categorize it. Some investors may view us as an impact fund, and that’s acceptable. Others recognize the substantial financial advantages of a fund like ours, simply because we explore investment opportunities in different areas than other funds. This broader search increases the potential for successful investments, and ultimately, better returns. Some of our investors are primarily attracted by this potential for superior returns, believing our unique approach will generate greater profits. It’s not solely about impact; it’s a robust fund that happens to produce significant, positive social impact as a result.”