For a VC firm, the second fund is a make-or-break moment. With the initial fund, you raise money based on an investment thesis because you don’t have any track record, any return on investment to verify that you’re a capable investor. It’s a different story when it’s time to raise the second fund.

And Singular, a Paris-based VC firm co-founded by Raffi Kamber and Jérémy Uzan that invests across Europe, has two pieces of information to share on this front. First, after raising €225 million for its initial fund ($245 million at today’s exchange rate), Singular managed to raise €400 million for the second fund. Second, all the investors who participated in the first fund are back as limited partners in the second fund — this is a good signal.

This wasn’t an obvious outcome for the VC firm, as it’s been a wild ride over the past two or three years in venture capital. After the investment frenzy of 2021 and early 2022 that led to insane valuations, things have come down back to earth in a dramatic way.

According to Atomico’s state of European tech report, European startups are on track to raise $45 billion this year. In 2022, European startups raised $85 billion.

“There were a lot of companies raising funds at a fairly rapid cycles, and raising the top end of what they could raise. And so, statistically, the average check had gone up and the pace of deployment had accelerated a bit,” Jérémy Uzan told me.

“So we found ourselves in a position where we had to ask ourselves, what are we going to do? Do we engage or do we stay out? Shall we play or not play? . . . We chose to play this game — after speaking with our LPs, of course,” he added.

Now, many startups are raising rounds with a flat valuation or even a lower valuation than their previous round. How did it affect Singular’s performance? The firm isn’t sharing any metric on its first fund’s financial performance. “It’s good,” Uzan said.

He also reiterated that existing LPs invested once again in the second fund. And the implications of the VC investment frenzy were straightforward. It meant that Singular had to raise its second fund more quickly.

Singular raised its fund from large investors — pension funds, sovereign funds, big family offices. Most of them have at least $10 billion of assets under management and are based all around the world, from the U.S. to Singapore.

Building a big European VC fund

Unlike many VC firms based in Paris, Singular has been investing in European startups from day one. In many ways, Singular is trying to build a tier 1 VC firm that could rival with Index Ventures, Accel, Balderton, Atomico, EQT, etc.

“There are lots of small funds springing up, very often built around individuals, either with a solo GP approach, or a seed fund approach with a particular vertical, or focused on a particular geography,” Uzan said. “But a generalist VC firm on a European scale, with no vertical, no geography, just competing with the few brand names that naturally come to mind, I’m not sure if there were many new ones.”

He named Blossom Capital and Felix Capital as relatively recent newcomers with this sort of opportunistic venture investment scope. But, according to him, it’s hard to come up with a French VC firm as an example.

Many French VC firms still remain focused on France first, with a few European investments here and there. Around one third of Singular’s portfolio companies are based in France. But the rest of them — the majority — are spread across several European countries.

Singular invests in Series A rounds and later. “Our approach is that we have deep pockets, so we can do a Series A where you need a big check to get in. But at the same time, we obviously don’t regulate out financing very, very good teams at the very early stage,” Uzan said. “And we have nothing against Series B rounds when we feel there’s still plenty of potential upside.”

Some of Singular’s portfolio companies that I’ve previously covered on TechCrunch include cancer care software startup Resilience, corporate mental health service moka.care, data monitoring platform Soda, automated accounting startup for freelancers Indy, social stock trading app Shares, material company reusing carbon fiber composite Fairmat, realtime analytics API startup Tinybird, life insurance startup Life5, enterprise software company for the hospitality industry Thynk, and AI-based R&D startup focused on materials science Osium AI.

As you can see, it’s a large mix of industries and verticals. There’s no clear common thread between these companies, except that there was an investment opportunity.

“We still have this approach — it’s a bit of a cliché, but it’s real — which is to look for the best teams. We consider that the teams will guide us to projects with a high potential,” Uzan said.

And once they see an investment opportunity, Singular tries to guide rounds as much as possible so that it can remain very much involved with portfolio companies and their CEOs. “Raffi says we think we’ve done a good job if we’re one of the ten names on the speed dial list on your iPhone,” Uzan said.

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