Frontline Ventures Launches €70 Million Seed Fund III for European B2B Startups

Dublin-headquartered Frontline Ventures has announced the details of its new €70 million (approximately $83.8 million) Frontline Seed Fund III. This fund is specifically targeted towards early-stage, business-to-business (B2B) startups operating within Europe.

With this latest fund, Frontline Ventures now manages a total of €250 million in assets. These funds are deployed through the firm’s offices located in London, Dublin, and San Francisco.

Fund Backers and Investment Strategy

The fund’s investors include prominent institutions such as the European Investment Fund (EIF), the Ireland Strategic Investment Fund (ISIF), and AIB, a leading Irish banking institution.

Additionally, the fund benefits from the support of ten technology-focused angel investors, many of whom are successful entrepreneurs who have previously exited their companies, originating from both Europe and the United States.

Frontline Seed Fund III has already commenced its investment activities. The intention is to invest in up to 45 companies over the coming four years.

Individual investments will vary, ranging from €250,000 to €2.5 million per company.

Complementary U.S. Growth Fund

This new fund complements Frontline’s recently established U.S.-based growth-stage fund, Frontline X.

Frontline X focuses on supporting U.S. startups seeking to expand their operations into Europe and the European Union.

Ireland’s membership in the EU positions it favorably to capitalize on the opportunities arising from Brexit.

Fund Allocation and Market Opportunity

William McQuillan, a partner at Frontline Ventures, stated that approximately 50% of the fund will be allocated to new, early-stage companies.

The remaining capital will be reserved for follow-on investments in companies already within Frontline’s portfolio.

McQuillan believes that Europe presents significant growth potential, currently holding 26% of the global B2B software market, compared to the U.S.’s 50-55% share.

Increased U.S. VC Presence in Europe

The launch of this seed fund coincides with a growing trend of U.S. venture capital firms establishing a presence in Europe.

Examples include Sequoia, which opened a London office last year, and General Catalyst.

In May 2020, Frontline invested in Evervault, an Irish-headquartered company, alongside well-known investors such as Kleiner Perkins, Index, and Sequoia.

Portfolio Success and Team Experience

Since 2012, 70% of the companies in Frontline’s seed portfolio have successfully secured funding from U.S. venture capital firms.

The Frontline partners bring extensive experience, having worked with prominent companies like Google, Twitter, SurveyMonkey, Airtable, and Yammer.

McQuillan’s Vision

According to McQuillan, “Back in 2012, it was evident that European entrepreneurs were lacking the necessary infrastructure and support to build globally competitive businesses from within Europe.

Today, Europe is a prime target for top-tier U.S. investors, but successfully scaling internationally remains a key challenge.

Our team has leveraged its collective experience and resources to assist our founders in expanding across the Atlantic.

Seed Fund III represents a continuation of this effort – helping founders launch and achieve global reach.”

Notable Investments and Exits

Frontline’s previous investments include Linked Finance, Clearbanc, and Currencyfair.

The Frontline X growth fund has participated in funding rounds such as TripActions’ Series B, People.ai’s $100 million Series C, and Clearbanc’s $50 million Series B.

Successful exits from Frontline’s portfolio include Logentries, acquired by Rapid7; Orchestrate, acquired by CenturyLink; and Pointy, acquired by Google in 2020.