Daphni, a French venture capital firm known for backing AI company H and quantum startup Pasqal, has closed its third fund, securing €200 million. It aims for a final close of €250 million by the end of this year. Limited partners in Daphni Blue include Crédit Mutuel Arkéa, Bpifrance, the European Investment Fund, PRO BTP and Swen Capital Partners.
The new fund aims to continue Daphni’s mission of supporting high-potential startups across Europe, focusing on sustainability, impact, and digital transformation. This aligns with Europe’s broader trend as the world’s leading region for positive impact venture capital investing, with one-third of the €53 billion raised by European tech startups in 2023 going to companies addressing United Nations Sustainable Development Goals.
Daphni is also pioneering a dual fund strategy, with a parallel €100M fund called “Time4” specifically targeting underrepresented founders in France. This initiative, led by venture partner Anita de Voisins, aims to back 100 early-stage startups founded by entrepreneurs from overlooked socio-economic backgrounds.
Plans to invest in 40 startups
The French VC plans to deploy the fresh capital to invest in 40 early-stage companies. Until now, the fund has focused primarily on seed and Series A rounds, offering initial investments of €1 million to €8 million per startup and additional reserves of up to €15 million in follow-on rounds.
The new fund will back early-stage science-based startups dedicated to climate transition and sustainability in fields such as life sciences, biology, physics, chemistry, and mathematics. This scientific focus has driven the firm to recruit different profiles to its investment team, including PhD graduates and students, reflecting a broader trend of researchers being more open to commercializing their research.
Emphasises on community and co-investment
Founded in 2015 by a group of experienced investors and entrepreneurs, Daphni has cultivated a reputation for identifying and nurturing transformative startups. The firm employs creative approaches to deal with sourcing, including in-person interactions with founders through events like Techbikers and co-hosting initiatives like The VC Bridge event.
Managed by founding partner Pierre-Eric Leibovici, Daphni’s unique approach blends traditional VC expertise with a digital community-driven model. Its proprietary platform, Daphni Purple, connects over 300 experts, mentors, and corporate partners who provide real-time insights and feedback to portfolio companies. This collaborative model ensures that Daphni-backed startups receive financial capital and strategic guidance from industry leaders.
Daphni is also developing digital tools to enhance their capabilities “to identify startups before they even know they need us”.
Portfolio of Daphni investments
Daphni’s track record includes investing in 70 European startups since its founding in 2015, evolving from its first fund (Purple), which backed 28 companies, including now-successful ventures like Back Market and Swile.
The VC’s portfolio features diverse, innovative companies that have gained significant traction across various sectors. Notable investments include:
Back Market: A marketplace for refurbished electronics that has become a global leader in the circular economy.
Typology: A rapidly growing direct-to-consumer beauty brand focusing on natural and sustainable products.
Swile: A French fintech company transforming employee benefits and corporate services.
Kleio: A generative AI platform specializing in content creation and knowledge management.
Zoe: An AI-driven health tech startup providing personalised nutrition and wellness recommendations.
Pruna AI: A cutting-edge AI company focused on automating legal processes and enhancing contract analysis.
Strengthening Europe’s startup ecosystem
With this new fund, Daphni aims to further strengthen Europe’s innovation ecosystem by continuing to back ambitious entrepreneurs who address pressing societal challenges. The firm remains committed to its ethos of building a sustainable and inclusive future through technology, ensuring that its investments contribute positively to the global economy.
This commitment aligns with emerging trends in venture capital, where diversity is increasingly recognized as a driver of better investment decisions and financial performance.
