Eight Roads launches its fourth fund: $450M aimed at European/Israeli scaleups

European VC Eight Roads is launching its fourth fund of $450 million for European and Israeli tech companies, aiming for another 15-20 across a broad range of consumer, software as a service, fintech and health tech areas. Cheque sizes will range from around $5 million to $50 million per company, and as such, it tends to play more in growth funding rounds. 10-year-old Eight Roads is backed by Fidelity and was formerly known as Fidelity Growth Partners and before that Fidelity Ventures.

Eight Roads has previously invested in companies such as AppsFlyer, Cazoo, Fireblocks, Hibob, Made.com, Spendesk, Red Points and Neo4j, and now manages over $8 billion of capital across Europe, Asia and the U.S.

To give you an idea of how the fund has grown, the first Eight Roads fund was £100 million, the second £150 million, the third $375 million, and the latest is $450 million.

Davor Hebel, managing partner and head of Eight Roads Ventures Europe said:

It’s great to be launching our latest fund at a time when there is so much entrepreneurial energy and ambition in both Europe and Israel and we’re now firmly on a path to building global technology champions out of the region. This additional capital enables us to continue helping ambitious founders scale, win and have a lasting impact on the way we live.

I asked the firm whether it will also have a climate focus, given the scale of the problems facing the planet. A spokesperson said the focus on climate cuts across all of its sectors but as an investment theme Eight Roads looks at three main focus areas:

• Clean energy — so it has an investment in a Nordic company Tibber, which helps people run their homes more sustainably.

• Sustainable products — Eight Roads has invested in Otrium (fashion marketplace aiming to get every item to be worn), Smol (environmentally friendly house products), La Fourche (organic and sustainable produce), VIU (eyewear brand) and Made (online furniture brand).

• Climate change tools and enablers — e.g., carbon footprint measurement and reduction.

During an interview, Hebel told me a major investment theme this year and last has been the shift to remote working, HR systems to support that and: “Every company needs fintech now.”

The fourth biggest category for Eight Roads is digital health, also supercharged by the pandemic.

Enabling technologies, like AI, are also being applied: “I wouldn't call it a sector, but the machine learning aspect. Like Glovo, which is a company that does internal talent marketplaces for large companies, where you can match people's talents with opportunities in other parts of the organization.”

I asked Hebel if his company was returning to the office. He said: “I think we're still feeling our way, you know. I think we said we'll be two days a week, and then see how it goes. It's good to see people again.”