🇪🇺 The State of European Micro-Funds

Hi, it’s Alex from 20VC. I’m investing in seed & series A European vertical solutions (vSol) which are industry specific solutions aiming to become industry OS and combining dynamics from SaaS, marketplaces and fintechs. Overlooked is a weekly newsletter about venture capital and vSol. Today, I’m super excited to share 20VC’s report on the State of European Micro-Funds.

Over the past few weeks, we went deep on the European micro-fund landscape, defined as funds under €50m, often run by 1–3 GPs, writing first checks at pre-seed and seed. We mapped 80+ micro-funds.

Why?

• We have the intimate conviction that micro-funds are the future of Europe’s pre-seed & seed scene.

• They move fast, take more risks, provide unique expertise to founders resulting in higher NPS from founders and better returns for their LPs.

• At 20VC, we build cap tables like sports teams, bringing unique superpowers to maximise the success rate of our companies. At pre-seed & seed, it means that we will always co-invest with micro-funds and angels.

The State of European Micro-Funds

We put together a 20-slide report on European Micro-Funds covering why they matter for Europe’s tech ecosystem, a ranking of the 10 micro-funds and key stats on all 80+ funds mapped (inception date, geographic focus, team set-up, sector focus, fund size, cheque size).

Access the Report

Access the Report

Key Learnings

• Young asset class: 63% of European micro-funds were created after 2022

• Early signs of outlier performance: Lovable, Deel, n8n, Synthesia, ElevenLabs are all at 100x+ TVPI for certain micro-funds

• Small funds & follower cheques: €19.5m median fund size, €300k median check size

• Small teams: 41% solo GP vs. 59% team-based (2-3 GPs max)

• Collaborative ecosystem by design: micro-funds regularly co-invest

• Unique value proposition to founders: industry expertise (Rerail in financial services, 201 Ventures in defence), network of local entrepreneurs & operators (SyndicateOne in Belgium, OPRTRS in France), lead VC expertise & involvement (Puzzle)

• GPs backgrounds: from top VCs (Puzzle) or successful operators & entrepreneurs (Interface & Baobab)

• Geos: UK (25%), Germany (15%) and France (15%) have the most micro-funds

• Specialisation: 71% generalist vs. 29% thematic, with consumer, fintech, frontier, climate and defence as dominant specialisations

• Micro-funds are sometimes operated alongside full-time roles (SyndicateOne, PrimaBeta), similar to the model we have with 20Growth, 20Product & 20Sales

Thanks to Julia (🦒) and my amazing team at 20VC! Thanks for reading! See you next week for another issue! 👋