COVID-19 Venture

Runa Capital Closes Third Fund At $157M To Invest In Digital Transformation And Deep Tech

Runa Capital closed its third fund at $157 million to invest in early-stage deep tech–specifically quantum computing–and digital transformation in cloud infrastructure businesses. The company said it will focus on fintech, edtech and health care.

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The first close was announced in July 2019 with the final close completed since the pandemic took hold. We spoke with Andre Bliznyuk, a general partner based in Silicon Valley, who acknowledged that the new environment created an extra layer of effort to communicate with LPs to provide clarity on the fund.

Fund III is larger than its first two funds, each at $135 million raised in 2010 and 2014, according to Crunchbase. Runa has raised a fund every four years, and invests in around 25 to 30 new companies per fund with a strong focus on Western Europe and North America. In 2019 the firm opened a Berlin office.

Runa Capital invests primarily at Series A with occasional post-seed and Series B rounds. Investments range from $1 million to $10 million. Runa reserves roughly half the fund for follow-on investments in portfolio companies. New investors include founders the firm has previously backed. Investors in the fund include family offices, high net worth individuals and tech entrepreneurs.

Notable exits in 2019 including NGINX an internet infrastructure company acquired by F5 Networks for $670 million, and Acumatica a cloud business management software company acquired by PE firm EQT based out of Sweden.

In the U.S., Runa has invested in Lendio a marketplace for small business loans, DrChrono a practice management and electronic health care records company, and MariaDB, an open-source database company. In Germany it invested in Mambu, developer of a nextgen cloud-based core  banking platform, German loan marketplace Smava, and online lender  Monedo (rebranded from Kreditech).

COVID-19 has not impacted Runa’s investment focus.

According to Bliznyuk, “The thesis is strengthened as more and more businesses realize they need to be online, and operate in the cloud to provide telemedicine services, to provide remote education services, and for financial services without needing to go to a bank branch.”

The firm is also planning a renewed seed-stage focus to invest $100,000 in companies’ pre-product market fit.

Since the beginning of April, $7.4 billion has been raised by venture firms with the majority raised by two investors;  LightSpeed Venture Partners raising over $4 billion and Index Ventures with $2 billion.

Illustration: Dom Guzman

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