How many VC funds can you name where all three partners had babies while raising the fund, have deep connections in Asia as well as Europe and the US, and list actress Anne Hathaway as LP? Not many I would risk.
But that’s the profile Covenant, a new Seed VC fund launched with a £30 million ($36 million) cash pool to support early-stage startups across Europe. Pact will target ‘mission-driven’ startups in what it calls the “ABC” categories: Access (economic inclusion), Enhancement (personal and professional well-being) and Climate. (That’s a much more interesting way of tackling the ‘do good’ areas, rather than trotting out the UN SDGs, IMHO.) Pact’s investment tickets will range from around £1m to £1.5m.
In addition to Anne Hathaway (she’s not ‘just’ an Oscar-winning actress, but also a UN Woman Goodwill Ambassador), other LPs include Jeff Dean, Google’s director of AI, and Keith Teare, founding shareholder (and former ) of TechCrunch and a former tech entrepreneur in the UK and US.
They are joined by Anchor investor Campden Hill Capital; Yeming Wang, former head of EMEA at Alibaba; Fahd Beg, Naspers COO; Todd Ruppert, retired CEO of T. Rowe Price Global and venture partner at Greenspring Associates; and Tilo Bonow, CEO of PIABO.
The three female companions – tongu, Reem Mobassaleh WyndhamY Monik Pham — were former venture capitalists at other funds. Gu was an investor in ADV (of which Teare was previously a part) and created a data analytics startup in Shanghai from which it spun out. Wyndham was also an ADV investor and former founder. Pham was part of the founding team of the early stage fund Fuel Ventures and launched several social ventures in Africa and India.
Speaking to Reem Mobassaleh Wyndham, she told me that they had been raising the fund for a little over a year (during their pregnancies and first children), but the idea had been “in the works” for about five or six years: “They both came together to ADV the same week. And we met Monik around the same time. What we saw within the early stage landscape in the UK were some key things missing. There are very few early stage fund managers who have as much operating experience like deep operating experience abroad in emerging markets. And that’s something that the three of us, in a very complementary way, bring to the table.”
“We believe that capitalism should and can be inclusive while still producing great results,” he added. “And we really want it to be able to support early-stage companies that are really shaping the future in a positive way. We have all built our careers with Northstar guiding us. It is a value that we have always championed, but it is only now at this point that the market is really getting close to it. There should be no compromise between socially sustainable, environmentally sustainable and commercially sustainable results. You have to think of both. And that is a value that the three of us come together on,” he said.
Tong Gu told me, “I grew up in China and witnessed how entrepreneurship and technology have enabled a large population of people who used to be below the poverty line to become wealthier and improve their lives. I created a technology company that allowed small independent brand owners to compete with the bigger ones. And for me, that was the experience of really driving economic inclusion, but in a somewhat technology-enabled way.”
Wyndham admitted that “it’s not a great fund.” However, he said the £30m should provide them with enough companies to get the “healthy diversification” needed for fund returns: “We could do 18-20 companies, either lead or co-lead. We’ve been very careful about how we’ve curated our LP base. So the LPS that have come in are strategic and provide domain expertise and market access, but also provide capital continuity. The vast majority are looking for access to the deal pipeline. So, in that sense, this is actually scaling our firepower beyond 30 million.”
On having a Hollywood movie star among her LPs, Wyndham added: “Actually, she’s been a friend of mine and a mentor for about 12 years and since then we’ve become friends and shared values. One of the great causes of it is childcare, and the lack of it, as the last frontier for gender parity. And that’s something we’ve experienced firsthand as three female doctors having our first children while raising this fund. We had to figure out how to overcome structural headwinds in order to do both. That’s one of the lessons we hope to share with the ecosystem, and that’s where Anne comes in.”
Pact’s first investment has been made in grow kitchena London-based company launching sustainable food brands based on data insights.
Past investments for Pact team members include Clause acquired by DocuSign. Onto, an electric vehicle subscription service; Perlego, an online learning platform; and Yoco, an African fintech company.