Front stayan emerging venture capital fund based in Geneva, Switzerland, has been very active. This week, it closed its second fund, Forestay Capital II, with a cap of $220 million. The venture capital fund was not well-known in Europe until it began leading fundraising in enterprise startups a few years ago, including scanning software startup Scandit — which has raised $273 million to date — in Zurich.
The Forestay II fund will invest across Europe and Israel, with a “sweet spot” of leading growth rounds of $10 million to $15 million, at a company’s inflection point, he said.
To date, the VC has backed 13 companies, including K2view, Nexthink, Scandit and Wasabi; three of which have reached unicorn status and two have been acquired. Most recently, the firm has backed Neural concepta spin-off from EPFL, the Swiss Federal Institute of Technology in Lausanne, which raised $27 million in a Series B round to tackle rapid manufacturing design with AI.
Front stay also directed Portuguese “predictive maintenance” startup Stratio raised Series A with a $12 million Series A in 2021.
The Forestay fund was founded as a fund of Flexion Bthe private investment vehicle created by the Bertarelli family, best known for construction Serono in the world’s third largest biotech company, before its merger with Merck KGaA.
Forestay is led by Frédéric Wohlwend, former Global Chief Digital Officer of Merck KGaA and Serono.
“As a CDO at large companies, primarily in the clinical biopharma space, I’ve had the opportunity to look at the entire value chain, from early stage research to distribution, at some pretty large companies,” he told TechCrunch on a call. “That’s why we decided to focus on the enterprise and enterprise AI, because we know the business inside and out.”
While “it’s a very competitive market,” Wohlwend said the fund will be “extremely focused on how we take on projects,” adding: “We only do enterprise AI and SaaS. We don’t do hardware, not even sensors and things like that. We’re very focused in terms of stage – we play mostly in Series B. We can do A to C rounds, but our sweet spot is Series B at the inflection point. So we present ourselves as an ‘almost growth’ fund because we capture our targets as soon as they generate revenue.”
He added that, besides Switzerland being “an interesting ecosystem”, Southern Europe is also futureas we recently reported.
Forestay’s new fund is also backed by Anaïs Ventures, the investment vehicle of some members of the Firmenich family, which has created a fund perfume empire.
In a statement, Julien Firmenich said: “Forestay’s targeted investment strategy and operational acumen, honed by years of industry experience, align perfectly with our vision.”
Given that its consumer markets are very fragmented geographically and linguistically, Europe has carved out a very good market for SaaS and enterprise, and there are many venture capitalists focused on enterprise.
Indeed, an in-depth analysis of the top companies and trends in the SaaS market in Europe and Israel last year revealed that the SaaS ecosystem market reset was driven by growth of generative AIBut Forestay’s emergence can only be a good thing, adding to the choice of funds for growth-stage startups in Europe, where growth capital is often harder to acquire than in the United States.
