How our latest portfolio companies showcase what we’re (still!) looking for
Ada Ventures is a pre-seed and seed fund, funding extraordinary talent building breakthrough ideas for the hardest problems we face across Climate Equity, Healthy Ageing and Economic Empowerment.
We celebrated Fund II’s first anniversary this October with the launch of a movement: Inclusive Alpha. This investment approach prioritises an inclusive lens at every stage of the investment process to drive both investment performance and positive impact.
Inclusive Alpha has informed every investment decision we have made so far when investing in Fund II’s breakthrough companies and extraordinary founders listed below. They may want to change the world but they want to embody that change too.
In January 2023, Ada Ventures led an investment round in BlakBear, a deep-tech maker of quality-control sensors for food — the tech predicts food quality information from the emitted gases of the contents. BlakBear could help solve the massive problem of food waste using their unique technology. It was actually one of our FutureVC Interns, Giulia Todres, who found out about the start-up.
In April 2023, we participated in a £600k round for Greenworkx, a pre-seed stage company building a marketplace for training and jobs in the green economy. The start-up aligns with both our economic empowerment and climate themes.
In May 2023, we invested in MultiOmic, an AI platform to find solutions for Metabolic Syndrome (MetSyn), a medical condition that contributes to around 42% of global deaths a year. It’s a big problem; there’s clear demand, and the team has the ideal combination of enthusiasm, experience and network.
In June 2023, we announced our investment in Glowb, a residential solar-energy start-up. We led a £1.2mn round which was oversubscribed by 80%. Why such interest? There’s huge demand for solar energy but no mainstream brand consumers feel they can trust. We think Glowb’s full-stack residential solar and battery offering has the potential to become a market leader.
June was a busy month. We also announced our investment in the £2.4mn seed round of Alvie Health, the accessible and personalised prehab and rehab company. We invested because it has taken just two years for the team at Alvie Health to build a product that their users love and that drives fantastic patient outcomes.
In July 2023, we announced a £2mn investment round in Materials Nexus, an AI company which finds replacements for precious metals and rare elements — and manufactures them. Ada Ventures scout, Jasmin Thomas, an ex-operator turned angel investor introduced us to founder Jonathan Bean. He is truly impressive, as is the team’s radical product. Materials Nexus could have a real impact on the climate agenda and be key to reaching net-zero.
We announced our participation in a £900k seed round in Boldr in November 2023. This ambitious start-up empowers households to reduce energy consumption while contributing to energy grid stability. The start-up’s climate focus and its exceptional founders piqued our interest. Thank you to Richard Ng, a Scout for Ada Ventures, as well as co-founder and CTO of Greenworkx (a start-up in the Ada Ventures’ portfolio), for introducing us.
We are still looking for companies in which to invest and want to hear from all founders building breakthrough ideas that could change the world. Our portfolio companies are key to knowing what interests us as a fund.
A useful summary to better understand what makes us say “Hell, yeah!” to investing:
We’ve designed our investment process to serve founders. This means we respond to the timetables required and have invested within a month of the first meeting. Typically, there are two to four introduction and due diligence calls. We also strive to run a transparent process so that founders always know where they stand with us in the decision-making and investment processes.
We typically invest at pre-seed, but can also invest in a pre-Series A round. By this, we mean that we are very comfortable investing pre traction (revenue, users, etc). However, we prefer to at least see a MVP, Beta, or V1 product before we can invest. Our first cheque is typically £250k — £750K (pre-seed) or £1mn — £1.5mn (seed). We are looking to own 10% of shares with our first investment.
As one of only a few true pre-seed investors in the UK, we lead (i.e set the price and legal terms) most investments we make, but this is by no means a requirement. Once invested, we are tireless in our support, whether we are a board member or not (usually not). We have reserves of a multiple of our initial investment for follow-on capital, but we reserve this follow-on capital for the companies performing in the top 1/3rd of the portfolio.
Ada is a thesis-driven investor: we focus our capital on themes of major demographic shifts. We study what it means to be human today and in the near future — we’re talking five to 10 years. Our investments reflect these views.
- Climate equity — climate technologies and urbanisation/mobility
- Healthy ageing — biotech and personalised (mental and physical) health
- Economic empowerment — equitable work and financial infrastructure
We are a UK fund investing in UK businesses, where we feel we can be most useful. We will occasionally and selectively invest outside of the UK (usually as a co-investor), but only where there is a strong logic for the company having a UK-based shareholder and where they have a UK presence to back this up.
What we’re really looking for!
The most common reasons we say “Sorry, no” (instead of “hell, yeah!”) are concerns around either defensibility or scalability. This does not mean we do not think that the business is any good, only that in our view it is not yet ready for venture capital. We are trying to maximise the financial and social impact from our investment returns, and this means we are seeking to back the most scalable businesses in the world.
To see how quickly things move at Ada Ventures, read on to find out what was going through our minds just a year ago — as we looked back at what happened with Fund I and looked forward to Fund II.
Announcing Ada Ventures Fund II
Today we announce the launch of Ada Ventures Fund II and our first close of £36m.
Ada Ventures II enables us to continue building an inclusive venture capital fund investing in breakthrough ideas for the hardest problems we face. We are delighted to be backed by so many returning Fund I investors including the British Business Bank’s Enterprise Capital Fund programme, Atomico, Inovia, Taavet+Sten, the Supercell founders and many more. We are also really pleased to be joined by new mission-aligned investors including Plexo Capital, the University of Edinburgh and Molten.
So what happened with Fund I?
- Fund I has now been invested in 28 companies with our first cheque written in March 2020.
- We’ve invested in bold founders building breakthrough ideas including Huboo, Organise, Micrographia Bio, Bubble, Spill, Boundless, SideQuest and Moonhub.
- We’ve invested at pre-seed and seed with an average cheque size of £557k, average first cheque ownership of 9%.
- The performance of the Fund I portfolio is strong, generating over £40m of annual recurring revenue in aggregate, with £100m raised in follow-on investment including from notable investors such as GV and Mubadala.
- 1/3rd of the portfolio has been sourced by our fantastic scout network.
- We’ve paid £45,000 of finders fees to scouts who also have long term carried interest in those investments.
- 64% of Ada Portfolio companies have one underrepresented founder with 57% having female founders and 32% having non-white founders.
So what will stay the same between Funds I and II?
We still operate ‘open venture’, the three principals that Ada was founded around in 2018:
- Founders come from anywhere. We will invest in anyone, no matter where they come from or who they are.
- Investment decisions should be objective, transparent and fair.
- Venture Capital should be invested responsibly and for the good of society, without compromising on returns.
Pre-seed and Seed, UK Focus
We still invest in UK technologies at two stages, pre-seed and seed. We plan to make about 30 pre-seed investments over the next four years and about 10 seed investments.
What will change for Fund II?
Thematic focus — climate, healthcare & ageing, economic empowerment.
We’re focusing on three thematic areas for Fund II — three of the most pressing issues of our time. These are — the future of the planet, the ageing population and access to fair and equitable financial products and fairly paid, dignified work. We are looking forward to investing in founders building a fairer, more equitable future for millions of people in these areas.
- Climate. As we are all reminded by nearly every news story, we need to radically cut carbon emissions to address climate change — from 41 GT in 2021 to net zero by 2050. This will require an overhaul of our economy and presents myriad opportunities for innovation. At Ada, we’re looking for innovative companies using capital efficient technologies to address these challenges. Climate change is inextricably linked with social inequality. Marginalised people are disproportionately affected by climate change because they are more exposed to climate hazards, more susceptible to the damage these cause and less able to cope with the consequences. Fund I companies in this theme: Circa5000, FINDS.
- Healthcare & Ageing. The question of where you live, and the circumstances into which you were born, has a disproportionate impact on your quality of life. Indeed, it is alarming to consider that even in developed nations such as the UK, you are more likely to live a healthier life for longer – by almost two decades if you are born in the South East compared to the North-West. We’re on the lookout for innovative and ambitious founders seeking to use technology to equitably address healthcare challenges and reduce inequalities. Fund I companies in this theme: Spill, OMP, Spoke, Micrographia, Mirthy.
- Economic Empowerment. Huge sociocultural and economic challenges are actively disempowering billions of people, preventing them from acting with autonomy over their lives or achieving their potential.For example, there are still 1.4 billion people unbanked globally, including 1.3 million in the UK and 7.1m in the US, limiting their ability to participate in the economy. Hundreds of millions of workers face an uncertain future as automation increases in the workplace. At the same time, young people joining the workforce find their needs, priorities, and values are at odds with the corporate status quo. Fund I companies in this theme: Bubble, Boundless, Organise, Flexa.
If you are building a company in one of these areas, in the UK and raising a pre-seed or seed round, we would love to hear from you! You can apply on our website here.
Doubling down on social impact
During the course of Fund I we invested in business tackling underserved and unserved people including low paid workers, people over the age of 75, people without access to dignified, fairly paid work. We are even more focused on funding founders building businesses having positive societal impact, particularly for underserved groups, for Fund II and have made a commitment that 60% of our investments will be socially impactful.
Expanding angels and scouts
Today we are also launching an expanded angel programme, building on the learnings of our first angel programme in 2020, focusing on angels investing in the regions and recruiting the angels in part from our scout network. The 20 angels will also have specific operational expertise in areas like engineering, performance marketing, people and product.
Angel investing has incredibly high barriers to entry. Nationally, the estimated total proportion of female angel investors sits between only 15–18% (Investing in Women Code Report, 2021), and 10% for Mixed, Arab, Asian or Black ethnicity angel investors (UK Business Angels Association and British Business Bank, 2020).
We believe that this lack of diversity at investor level has a direct repercussion on the types of companies that get funded — which is why we launched our first cohort of Ada’s Angels. We have been so impressed by the quality of work that this first cohort have provided — each of them has invested into at least four high quality companies which they truly believe in, and six of these have become fund investments as well.
For our second cohort, we want to build on what we have learned with our first cohort and continue to:
- Diversify the angel investing community in the UK. Provide training & capital to people who would otherwise not be able to angel invest due to economic, social or other obstacle.
- Increase the diversity of our pipeline with high quality founders, focusing on our three sectors: Economic Empowerment, Healthcare & Ageing and Climate. We are, first and foremost, a venture capital fund, and our number one priority is to generate exceptional returns for our investors. We believe that our strategy of investing in diverse founders will deliver on this promise, and our Ada Angel (and Ada Scout) programs are designed specifically to help us to achieve this.
We hope you will apply. The applications can be found here.
If you’d like to be part if the Ada Ventures team, please check out the job posts and descriptions of how to apply here.
Applications close on the 9th October.
Thank you for reading!