Estonian VC Superangel announces new €50m fund

Estonian VC fund Superangel has announced a new €50m fund, which will be used to invest primarily in deeptech startups from across the Baltics and Nordics. The fund is known for being backed by prominent entrepreneurs and angel investors from a tech ecosystem that’s consistently punched above its weight.

Superangel launched its first fund, worth €16m, in 2018. Collectively, the team behind the firm has now invested in more than 100 startups worldwide. That also includes four companies that have reached a billion-dollar valuation, three from Estonia: mobility super app Bolt, identity verification startup Veriff, sales-first CRM and intelligent revenue platform Pipedrive (as well as Colombian on-demand delivery startup Rappi).

“We’re going to continue building on the success of this region, of Estonia, and also facilitating further this collaborative model,” Veljo Otsason, a general partner at Superangel, tells Sifted.

Backing regional giants

Over the last four years, the Estonian early-stage firm has backed some of the region’s most promising startups, including Bolt, Veriff, Starship Technologies and Nordigen. The team cut cheques of between €100k-€1m, largely for seed and Series A rounds.

Otsason says this new fund will continue to focus on science-based and R&D-intensive companies.

“What we’re doing different with this second fund is having an even clearer focus on deep tech, areas where companies have a more significant part of their intellectual property in science, technology, or meaningful engineering innovation.”

Anchor investors in the new fund include SmartCap, with Superangel’s general partners each personally committing 10% of the fund.

Meanwhile, limited partners include serial entrepreneurs and investors like Grünfin founder Triin Hertmann, an early employee at Skype and Wise, and Kersti Kaljulaid, the former president of Estonia, who led the country between 2016-21.

A land of unicorns

Estonia is home to the highest number of unicorns per capita in Europe, making it an enticing location for an early-stage investor. It’s also known for its highly collaborative startup scene.

In a novel approach, Superangel is tokenising up to 5% of its new fund’s carried interest, which will be given to industry experts who work closely with portfolio companies to help them develop strategies and processes.

“We have built this super network of experts in very different fields who are willing to help companies, sometimes save them a lot of time and money by giving advice — helping to build their sales teams, build financial models and all kinds of help that early-stage startups may need,” says Otsason.

“It’s like saying an additional thank you; everybody who’s contributing gets a token that gives them the right to some part of the fund’s carried interest.”

The tokenisation is being led by one of Superangel’s portfolio companies, Koos, which is looking at alternatives to the tried-and-tested shareholder approach to rewarding employees, outside experts and early backers.

“You can basically develop an investment portfolio without investing anything else than your focus and time,” says Taavi Kotka, cofounder of Koos, who previously served as the head of Estonian e-residency program council.

Otsason admits that the details of how the tokenisation will work in practise are yet to be fully ironed out, but he sees strong potential and believes that it is an approach that will be picked up by many others in the future.

Looking ahead, Otsason says they’re aiming to make about 40 investments in total from the second fund, about ten a year for the next four years, with several investments already in the pipeline.

“In general I think it’s a good time to make investments,” he says, of the current economic climate. “It’s always cyclical, there are times of very big optimism and there are times which bring people back to what’s really important, solving real problems.”

Kit Gillet is Sifted’s eastern Europe correspondent. He tweets from @KitGillet