Karma Ventures Announces Launch of €40 Million Fund for Early-Stage European Startups
Tallinn, Estonia – 10 February, 2016 – Karma Ventures has announced the first closing and launch of a €40 million, Luxembourg-domiciled fund targeted at early stage investment in the most promising startups in Europe.
The fund will be managed by seasoned investors Margus Uudam, Tommi Uhari and Kristjan Laanemaa. Margus Uudam and Kristjan Laanemaa previously worked together managing Ambient Sound Investments’ global portfolio, and are joined by Tommi Uhari to form the three founding partners of Karma Ventures.
Ambient Sound Investments was created to manage the minority stake in Skype held by its four founding engineers, and subsequently to invest the proceeds of its sale. Ambient Sound Investments is a cornerstone investor in Karma Ventures’ fund, and two of those founding engineers of Skype, Ahti Heinla and Jaan Tallinn, are exclusive advisors to Karma Ventures.
Skype, extraordinarily, was acquired at valuations in the billions of dollars not once but three times – first by eBay, then a majority stake was purchased by an investment group headed by Silver Lake, and finally by Microsoft for $8.5 billion in 2011.
European Series A investments made by Ambient Sound Investments included the London-based startup Mendeley, which developed a collaboration platform for scientists and was acquired by Elsevier in 2013, as well as the health and beauty marketplace Wahanda, now known as Treatwell, in 2015. Both were acquired at significant multiples. Other Ambient Sound Investments portfolio companies which achieved successful exits include Modesat, Armorize and Versita.
Making the A round work
“We’re seeing more excitement in Europe as more startups reach high valuations and manufacture successful exits. More talent is deciding to found or build startups, either instead of moving into traditional business, or after experiencing success and seeking a new challenge. That creates plenty of opportunity for early stage investment, but also means that the options both for startups and investors have multiplied.” said Margus Uudam, founding partner of Karma VenturesThe series A stage is the defining moment for many founders, and selecting the right investor is one of the critical components to achieve success at scale. We are very lucky to have Ahti and Jaan, two extremely successful entrepreneurial engineers, as exclusive advisors. Nobody is more qualified to look “under the hood” and see the possibilities and the risks of a potential portfolio company.”
“In the early stage, the kinds of companies we are interested in – companies with strong ideas delivered with unique technology, which are gaining traction with customers – need not just capital but smart capital, connected to deep knowledge and extensive international networks,” said founding partner Tommi Uhari. “We specialise in helping entrepreneurs to figure out the path – commercial, strategic and technical – through the expanding expectations and challenges of venture-backed growth.”
The key investors in the new Karma Ventures fund are Ambient Sound Investments and the Baltic Innovation Fund, an initiative created by cooperation between the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and the European Investment Fund (EIF). A number of pension funds and family offices have also joined the fund. The fund is targeting its second funding close by the end of 2016.
About Karma Ventures
Karma Ventures is a Luxembourg-domiciled, European early-stage venture capital firm, specialising in the A round and investment opportunities at a similar stage and of a similar size, such as late seed and A-plus rounds. Karma Ventures combines extensive business and venture capital experience with unmatched technical ability to identify and develop Europe’s most promising startups, at a stage where both investment and expert guidance will have the greatest impact on performance.The fund will be managed by seasoned investors Margus Uudam, Tommi Uhari and Kristjan Laanemaa. Margus Uudam and Kristjan Laanemaa previously worked together managing Ambient Sound Investments’ global venture capital portfolio, and are joined by Tommi Uhari for the launch of the Karma Ventures fund.
Ambient Sound’s activities have included A round investments in Wahanda and Mendeley , along with several other exits from seed and series A investments. Ambient Sound was created to manage the stake in telecoms startup Skype held by its four founding engineers, and subsequently to invest the proceeds of its sale. Two of those founding engineers of Skype, Ahti Heinla and Jaan Tallinn, are exclusive advisors to the new fund.
Karma Ventures announced the launch of its first fund, with a value of €40m, in February 2016. This fund will focus on European Series A opportunities, and will invest in companies using unique technologies to develop ICT products and services with a large addressable market, and which have already demonstrated the ability to attract customer interest before a full product roll-out.
The key investors in the new Karma Ventures fund are Ambient Sound Investments and the Baltic Innovation Fund, an initiative created by cooperation between the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and the European Investment Fund (EIF). A number of pension funds and family offices have also joined the fund.
The fund is targeting a second funding close by the end of 2016.
Karma Ventures Founding Partners’ bios
Margus Uudam, Founding Partner, Karma VenturesMargus Uudam is an experienced venture capital investor, with a record of investment in more than 30 startups and many successful exits. As well as Ambient Sound Investments, the investment vehicle set up by the founding engineers of Skype, he has served as Chairman of the Estonian Venture Capital and Private Equity Association, developing the regional startup ecosystem.
Margus has deep insight in developing business strategy, operations and growth, as CEO of Distribution Network at the Balto-Nordic energy company Eesti Energia and the leading Baltic recruiting services company Fontes. He has also dealt with state finance at the highest level, having negotiated with the EU and NATO on financial matters as Deputy Secretary General of the Estonian Ministry of Finance.
Margus graduated with a degree in Business from the Estonian Business School.
Tommi Uhari, Founding Partner, Karma Ventures
Tommi Uhari has a history of leadership in both agile startups and technology giants. Before joining Margus and Kristjan to set up the Karma Ventures fund, he was most recently CEO of Uros, a multinational startup which he founded. Uros is dedicated to creating the lowest-cost mobile data access in the most countries across the world through revolutionary technology.
In the sphere of large-scale technology, Tommi has previously operated as Senior Vice President of Products at ST-Ericsson, Executive Vice President at ST Microelectronics and VP of Wireless Platforms at Nokia.
Tommi holds and has held many board memberships and chairmanships in a range of high technology startups, including Senseg, LPRFIC (acquired by LG Electronics), Bonomo (acquired by MediaTek) and Telegent (acquired by Spreadtrum).
Tommi graduated from the University of Oulu with a Master of Science degree in industrial engineering and management.
Kristjan Laanemaa, Founding Partner, Karma Ventures
Kristjan Laanemaa is an experienced investment manager. Kristjan is board member and investor representative in a number of Ambient Sound Investments’ portfolio companies, which he has advised throughout their growth phase and in several cases through their exits. Kristjan primarily supports the portfolio companies’ CEOs on funding strategy and business model development.
Kristjan’s previous career includes financial management at private investment companies and corporate finance analysis at financial advisory firms.
Kristjan graduated from Tartu University with a degree in Finance and International management.
Additional Information:
Margus Uudam
margus@karma.vc
Photo credit: Karma Ventures