Outward VC led the £4.7m funding round alongside Pentech Ventures, with participation from PiLabs, MJ Hudson, 7percent Ventures and Westloop Ventures as well as leading angel investors, including Matt Robinson (Nested); Will Neale (Grabayo); Charles Delingpole (ComplyAdvantage) and Perry Blacher (Augmentum Fintech)
Investment into alternative assets has experienced what can only be described as meteoric growth in recent years. Whether you are of the belief that this is a ‘bubble’ or that we are at the very beginning of an exponential curve, the market is showing no signs of slowing. The global alternate asset investment market – including PE/VC, private debt, hedge funds, real estate, infrastructure and natural resources – exceeded £10tn in AUM in 2019 and is expected to reach £17tn by 2025. Private equity and venture capital in particular, currently 41% of the market, is expected to grow at over 15% CAGR and reach over 52% of the alternate asset investment market by 2025 (source: Prequin).
Despite this seismic reallocation of capital from traditional assets to alternatives, which includes investing in companies at the forefront of cutting-edge technology and innovation, the infrastructure and models that investors rely upon to invest in the private markets haven’t evolved in decades.
This issue has recently been highlighted in one area through funds breaking away from the traditional 10 year fund model, be it Sequoia’s new open-ended fund structure or the likes of Molten Ventures, Augmentum Fintech and others listing on the public markets. Whilst this is a signal of evolution, it barely scratches the surface for what is required for the entire market – institutions and individuals alike – to be able to operate and invest at the level of efficiency and speed that the market demands.
For instance, the structuring and set-up of well-understood and relatively simple investment vehicles (funds or SPVs) to facilitate investments remain synonymous with lengthy, cumbersome and expensive processes fragmented across multiple service providers. Days to produce legal documents, weeks to on-board investors and sometimes months to open a bank account – all market participants without exception have experienced this pain. Whilst it is most acutely felt by the ‘long tail’ of the market – private investors, syndicates, Solo-GPs and small-to-medium sized fund managers – the impact on all can be so prohibitive that it may not be economically or practically feasible to set up an investment vehicle in the traditional way in the current market, due to cost and/or speed.
As investors, we live in hope that plucky entrepreneurs far smarter than us will come along and create solutions to our problems. If we’re very lucky, we hope we get the chance to invest in and support those entrepreneurs however we can. In Vauban, both of our wishes have come true!
Founded by long-time best friends and business partners Rémy Astié and Ulric Musse, Vauban is building the modern infrastructure and network for alternate asset investments globally with an initial focus on venture capital. Today, its integrated digital platform allows users to create, launch and deploy funds and SPVs at a fraction of the time and cost. This is all done online in a few simple steps, covering the end-to-end process from structuring, legal documentation, investor onboarding, KYC/AML, banking and ongoing fund administration.
When we first met Remy, Ulric and their team of highly driven ‘Vaubaners’, we were struck by their energy, passion and chemistry, whilst their vision to transform the alternate asset market resonated strongly having experienced the pain points first-hand. However when we saw the product in action, we were completely sold. The team’s obsessive and relentless focus on UX had resulted in a simple and intuitive platform that is well beyond 10x of anything that has existed to date in Europe and is only at the very start of its journey. It was therefore no surprise that when we spoke to their customers to hear about their experiences, the level of evangelism across the board was extraordinary, which went some way to explain the phenomenal organic growth they have achieved to date. More importantly, we were seeing Vauban create entirely new opportunities for investors.
Looking at their platform simplistically, Vauban makes creating and launching funds and SPVs exponentially simpler, faster, cheaper and digital. Whilst this in itself is huge, the impact it is having on the European market is more profound:
- Scrappy aspiring fund managers easily creating deal-by-deal structures to build track records,
- early angel investors becoming meaningful follow-on investors by syndicating pre-emption rights to their network for increasingly large follow-on rounds in return for carry,
- small and medium-sized funds doing the same with their LPs as a means of increasing AUM and flexibly operating outside the confines of their fund tenure and size.
These are opportunities that before were either so cumbersome that it would rarely happen, or in most cases were impossible.
In other words, Vauban have built democratising infrastructure that removes barriers and friction for those who have access to deal opportunities and capital – regardless of whether you are an individual, a group of individuals, an established firm, or whether you are a traditional investor, an operator or anything in between! We can already see this transforming (and expanding) the market.
Looking longer term, what excites us the most about Vauban’s vision is the ecosystem potential. Once participants operating on Vauban’s infrastructure reaches a critical mass – which today includes:
- 5,000 investors,
- $1bn in assets,
- deal makers spanning across established VCs (inc. Octopus, Passion Capital and Anthemis),
- family offices and
– it is a very real possibility that raising capital, selling down stakes through secondaries or entire fund-buyouts could become as transparent, efficient and straight forward as we see today on the public markets. Not just for venture capital, but across all private alternate assets. Globally.
We are incredibly proud to be backing and supporting Ulric, Remy and their team to achieve these bold ambitions. Whilst Vauban has a long way to go before it reaches this summit, we could not be more impressed with what they have built to date and are excited for the journey ahead.
If you’re an investor and you haven’t yet used the Vauban platform, don’t waste any time and give it a try for your next deal!