• European seed investor Connect Ventures has raised $80 million for its third fund.
• Connect Ventures was the first investor into Citymapper, the popular transport app headquartered in the UK.
• Connect Ventures managing partner Sitar Teli says the fund looks at a wide range of startups but particularly focuses on digital health, consumer, enterprise software, and fintech.
• Teli said she is thinking about what consumer behaviors might “stick” after the pandemic, such as the shift away from gyms towards working out at home with an app.
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European seed investor Connect Ventures has raised $80 million for its third fund to invest in early-stage tech startups across the continent.

The venture capital firm is perhaps best known for its early investment into Citymapper, the London-headquartered transport app that helps people calculate journeys by public transit, taxi, bike, and other methods of transport.

Connect’s fundraise news comes after peer early-stage investors in Europe including Hoxton Ventures and Fly Ventures also closed new funds, suggesting capital remains available to growing tech startups even as a pandemic-induced recession bites.

Sitar Teli, a partner at Connect Ventures, said the firm has historically invested on product-oriented companies. That will continue into the third fund, which will zoom in on digital health, consumer, enterprise software, and fintech.

Asked how the pandemic was influencing the firm’s thinking, she said: “It’s definitely accelerating trends. Part of the job of a VC is to try and predict what technology does to society. We have this thesis of what will happen, and part of it is timing, like you’ll think something will happen in the next few years … What we’ve seen with COVID-19 is that some of those times are really being brought forward. So instead of something happening in five years, it’s happening in a year.”

One example, perhaps, is Connect’s investment in Fiit, which provides virtual fitness classes through an app.

“They grew 100% in April,” said Teli. “We’re going to get to see whether these were permanent shifts in behavior, or whether they were temporary shifts and people actually want to go back to the gym.”

Not everything is influenced by COVID-19. Connect has made two investments so far out of its new fund since lockdown, and neither are correlated to the coronavirus. “We’re pretty much on pace, and it hasn’t really slowed us down or sped us up,” Teli said.

She added that Connect is pretty select about where it allocates its funding, with partners only doing two to three deals per year. “The core strategy is … build the portfolio of 25 to 30 companies where we think those founders have a real shot at building a really compelling product-centric business starting in Europe.”

Backers of Connect’s new fund include Top Tier Capital Partners, Isomer Capital, and British Patient Capital. The latter is managed by the state-funded British Business Bank, which has stepped in to provide funding to UK venture capitalists after the EU’s European Investment Fund cooled off following the UK voted to leave the union in 2016.

Connect Ventures has experienced some change in 2020 as one of its managing partners, Bill Earner, left in January and transitioned into a venture partner role. Teli says the fund changed its approach, and Earner felt it no longer made sense to stick around. His startup board seats will transfer to other partners at Connect Ventures.

Source: https://www.businessinsider.com/connect-ventures-raises-80-million-2020-6