Daphni Announces First Closing of Daphni Blue Fund

French venture capital firm Daphni has successfully closed its first round of fundraising for its new venture, Daphni Blue, securing €200 million (approximately $215 million). The firm aims to raise an additional €50 million ($55 million) by year’s end, bringing the total expected fund size to €250 million ($270 million).

Investment Strategy and Focus

Daphni has reported a strong track record, having invested in notable startups such as Back Market, Swile, Hubcycle, and Pasqal, with a total of 70 investments across Europe since 2015. With Daphni Blue, the firm plans to extend its portfolio by investing in an additional 40 startups.

Key Partnerships

The fund has attracted prominent limited partners, including:

• Crédit Mutuel Arkéa
• Bpifrance
• The European Investment Fund
• PRO BTP
• Swen Capital Partners

A Focus on Sustainable Innovation

According to Pierre-Eric Leibovici, founding partner of Daphni, the firm places great emphasis on distinguishing itself by backing sustainable technologies and services. Leibovici stated, “We need to ask ourselves how we can both differentiate ourselves, and support technologies or services that are sustainable when we invest in new projects.”

He highlighted the cyclical nature of the market, noting that it can often become dominated by American firms or face issues of breakthrough innovation.

Science at the Forefront

While many venture capital firms focus heavily on artificial intelligence, Daphni seeks to prioritize broader scientific disciplines as the cornerstone for its investment strategy. Leibovici emphasized that innovations in fields such as life sciences, physics, chemistry, and mathematics will dictate the next wave of technological advancements. “When you talk about quantum computing, well, quantum computing is fundamental physics combined with hardware and software,” he stated.

Team Expansion and New Trends

To facilitate this shift, Daphni is actively expanding its investment team, incorporating individuals with diverse scientific backgrounds. This includes a PhD graduate and a PhD student, underscoring a trend where emerging researchers exhibit greater openness to commercializing their research endeavors. Leibovici noted, “The new generation of researchers are much more open to commercializing their fundamental and applied research, because they see all their friends around them starting companies.”

Independence from Trends

Despite the increasing focus of French universities on attracting American researchers, Daphni’s pivot towards fundamental science occurred independently of these trends. “It’s a coincidence. We launched this long before there was this trend,” Leibovici mentioned, further opening the door for investments in American startups in Europe.

Looking Ahead

As Daphni prepares to deploy its newly raised capital, the firm faces the challenge of validating its investment strategy through successful returns and exits. As Leibovici aptly noted, “Raising is not an end in itself. What is an end in itself is distributing returns, and therefore exits.”