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Ada Ventures launches $34m fund, pledging to invest in 'overlooked' founders

Edmund Heaphy
Finance and news reporter
Matt Penneycard and Francesca Warner, founding partners at Ada Ventures. The firm is named after Ada Lovelace, the 19th-century computer science pioneer. Photo: Ada Ventures/Peter Matthews

Ada Ventures, a new London-based venture capital firm that hopes to disrupt Europe’s male-dominated technology industry, will on Wednesday launch a new $34m (£27m) fund that will invest in early stage startups.

The firm, named after Ada Lovelace, the 19th-century computer science pioneer, was founded by Francesca “Check” Warner, a prominent diversity campaigner, and Matt Penneycard.

The state-owned British Business Bank, which operates a programme to support new and emerging fund managers, is a major “cornerstone” investor in the new fund.

Warner, who spent years as an investor at various London-based venture capital firms, in 2017 launched Diversity VC, a non-profit group that promotes — and collects data about — diversity in the venture capital industry. Warner and Penneycard have worked together for four years.

Ada Ventures said on Tuesday that 92% of venture capital funding in Europe goes to startups with all-male teams. Some 83% of startup founders are white, while 82% are university educated, it said.

READ MORE: A shocking stat shows venture capital's diversity problem — and there's a 'moral' duty to address it

“Ada Ventures was founded to change that,” it said, noting that its mission was to make venture capital “truly accessible to the best talent in the UK and Europe, regardless of race, gender or background.”

The firm will invest in startups at the earliest stage of their journey, known as the seed stage, and before they have received any other outside investment.

Ada Ventures expects to invest half of its $34m fund by signing £500,000 cheques for startups. The rest will be reserved for follow-on investment in those startups.

US-based BlueSky Capital and Dubai-based Rasmala also invested in the fund, as did TransferWise co-founder Taavet Henrikus and several other angel investors.

“Fundamentally, Ada Ventures is about true inclusion, and we will invest in anyone, no matter what they look like and where they come from,” Warner said on Tuesday.

Noting that the investors in the $34m fund were expecting solid financial returns, Warner told Yahoo Finance that Ada Ventures was about “finding opportunities in places where other people aren't looking.”

Warner said her fund was focused on financial returns just as much as it was focused on diversity — but that, for Ada Ventures, they were one and the same goal.

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The firm will also deploy a network of “scouts”, whose task it is to find these overlooked companies at a grassroots level.

Many of the founders that her firm will invest in, she said, were building products for hugely valuable markets that have been overlooked by other venture capital firms.

Ada Ventures hopes to invest in startups that are targeting “the world’s biggest problems”, Warner said, pointing to the world’s ageing population, female fertility, and young people under 20.

The fund has already been used to invest in seven startups, including Ferly, a female sexual wellbeing company, and Motley, a jewellery company — both of which have all-female founding teams.

“We will be making money from the arbitrage when other funds realise that these companies we've invested in are actually really valuable.”

Warner said that the fund’s investors had “bought into the fact that this strategy is a way of achieving these returns”.