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Peloton investor Felix Capital looks to reinvent lifestyles with $300M fund

London-based venture capital firm Felix Capital is doubling down on digital lifestyle startups with a new $300 million flagship fund.

London-based venture capital firm Felix Capital is doubling down on digital lifestyle startups with a new $300 million flagship fund. Twice the size of its 2017 predecessor, the oversubscribed vehicle—Felix’s third—brings the firm’s assets under management to over $600 million.

Founded in 2014 by former Advent Venture Partners general partner Frédéric Court, Felix Capital has a thematic approach to its investments, backing direct-to-consumer businesses with a complex strategy.

“Our focus on digital lifestyle businesses falls into three large buckets,” Court told PitchBook in a recent interview. "[They] are digital commerce, digital media, and what we call connected life, so new products and services that impact our daily life. Lifestyle, for us, means brands that are visual first and have a big impact in different aspects of our lives from how we are entertained, how we access information or how we are inspired. It goes further into the kind of food we eat, the clothes we wear, and the brands we love. It’s about reinventing the way we live and creating new allegiances to new brands that we can relate to and that define who we are.”

The firm also backs B2B startups providing tools and platforms that enable creators to find and engage with their audiences, as well as to run their businesses. Felix’s portfolio currently has 32 companies within the digital lifestyle narrative across Europe and the US.

While Felix might not be a household name itself, its portfolio certainly includes some heavyweights. The firm was the first investor in online fashion marketplace provider Farfetch, which went public in 2018 at a $5.8 billion valuation. It’s also backed Deliveroo and Gwyneth Paltrow‘s wellness company, Goop.

Perhaps the most emblematic of Felix’s theme is Peloton, in which the firm was an early investor up until the cult fitness company’s $8.1 billion debut. “I think what we loved about Peloton is that it really illustrates well what Felix is about. There is such a unique proposition with such an engaged community around it,” Court said of the business.

Although keeping the same investment strategy as the previous fund, the latest pool of capital will have a larger focus on late-stage deals than before. "[Late-stage deals] have always been important to us but we wanted to just take things gradually,” Court explained.

He continued: “We have [previously] invested selectively at later stages in companies that were within our themes that maybe we had missed earlier or that we had invested in earlier as an early-stage company. What we are not going to do too much of is invest pre-IPO. Most of what we’ll be doing will be anything around the C, D, E rounds with mostly valuations between around $300 million to $1 billion. Although selectively we could do more.”

According to Court, the key to finding the next Peloton or Farfetch lies in Felix’s thematic approach. The firm wrote in a Medium post that such a strategy is “helpful in light of the breadth of opportunities, the speed of change and the increasing need for specialization.” The success of Felix’s recent fundraise can be credited to the firm’s thesis—as well as its location.

"[The fundraise] is a sign that there is validation of our investment strategy, that people recognize that being a specialist is a good thing. And also that being in Europe is an attractive place to be fundraising,” said Court. “It’s a fraction of what it is in the US so we still have a long way to go, but compared to say five years ago when we raised our first fund, which was $120 million, as a first-time fund then it was quite big news.”

“I would say today that is not true,” Court continued. “The times have changed a lot in the past five years. And that’s great to see there is plenty of data showing that there is quality money coming into the European ecosystem and that this money is increasingly well invested.”

Hopefully Felix Capital’s new fund is a sign of things to come for the UK VC landscape, since fundraising from investors based in the country dropped significantly last year. Venture capital firms from the UK raised just under $3.3 billion across 28 funds in 2019, compared with about $5 billion the year before. Just one mega-fund came from a UK-based investor last year, courtesy of Northzone Ventures, whose ninth vehicle closed on $500 million in November. That same month, London’s Balderton Capital closed a $400 million fund.

Featured image via Witthaya Prasongsin/Moment/Getty Images

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    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
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