Tapestry VC Seals $50 Million Across Two Funds

Venture capital firm Tapestry VC has raised more than $50 million across two funds to invest in start-ups in the US and Europe.

The San Francisco-based fund, which has previously backed Hopin, Zapp and phone maker Nothing, has raised $31 million for its second fund and a further $20 million for its Opportunity Fund.

Fund II will continue to invest in software-driven start-ups, much like its predecessor fund, while the Opportunity Fund will back existing portfolio companies as they mature and require additional capital for scaling.

Co-founder Patrick Murphy said that Tapestry will be writing checks between $2 million and $5 million as part of larger rounds with other investors.

“We try to back mostly repeat founders, so about two-thirds of the people we’ve backed have actually done something before,” Murphy said.

“Typically those guys are able to move faster and have an insight that we don’t have. [The investments] cover a lot of sectors, but they’re all focused on software so whether that’s enterprise software, infrastructure and developer tools all the way to fintech and then we have and do some breakthrough technology, where we know the founders well so things like drone delivery or 3D printing.”

Tapestry is the new name of the VC firm, previously known as Semble, led by Murphy and co-founder David Kelly. It recently changed its name after cutting ties with the tech conference Web Summit. Kelly and founder of Web Summit Paddy Cosgrave are currently involved in legal action.

“Our initial fund was associated with Web Summit and we counted them as an investor. Tapestry is now fully independent of Web Summit. These funds were raised following the ending of that relationship,” Murphy said.

These latest fund are backed by several investors, he added. Among the names disclosed are Molten Ventures (the former Draper Esprit) and Sarah Friar, the chief executive of social network Nextdoor.

Tapestry has raised the funds at a challenging time for the tech sector where tech companies are seeing their valuations slashed and are cutting jobs to rein in costs.

These include some of Tapestry’s portfolio companies, such as virtual events firm Hopin, which laid off 29% of its staff last month, and Zapp, the grocery delivery start-up.

Some of these companies experienced high growth and raised large rounds of funding during the Covid-19 pandemic but have hit on new challenges with the re-opening of economies from lockdowns.

“As we’ve gone into the reopening, [Hopin] have not seen that same level of need for the product and they need to retool some of their own products and as a result, it retooled some of the team. Hopin might be at one end of the spectrum, but we’ve seen it across our portfolio. People are readjusting their business plans for the reality of what might be an impending recession,” Murphy said.

“We think it’s good stewardship and good governance to not be spending money when you think it’s not going to have a good return because that doesn’t work out well for the companies, their employees, or the underlying stakeholders.”

Murphy is based in San Francisco with colleagues in London and Lisbon that will be scouting investments on both sides of the Atlantic, despite the worsening economic environment.

“I think underlying investors see that you’ve got to be investing in good times and bad.”