Harry Stebbings is a British podcaster who entered the world of technology from complete obscurity, building his brand and audience around a series of regular 20-minute interviews with venture capitalists and founders. He used his fame to become a VC himself. Now, he has closed his third investment vehicle, his largest to date. 20VC, the company named after the podcast series that made him famous, has closed a $400 million fund.
At a time when European technology companies continue to lag behind their U.S. counterparts at almost every stage of investment, Fund 3’s main focus will be to support regional startups, drawing on Stebbings’ media name and connections. This will attract general attention. .
“I’m really tired of everyone making fun of Europe, Ingrid,” he said in an interview today. “We have an incredible company and we have great people. We need to make Europe great again. Mega!” he added with a laugh.
$125 million of the fund will be allocated to seed investments and $275 million will be allocated to the Series A round. Stebbings said the fund is not yet operational, and 20VC is still investing $140 million from its second fund, which it raised in 2021.
This latest funding was raised in four weeks, a relatively quick turnaround given the constraints that continue to swirl around venture capital despite the very slow recovery from the post-pandemic recession. It was time.
There are a few other things to note from this news.
— Despite the tough environment for founders, this is a reminder that money exists for investment and that pot is clearly still growing.
— Europe remains an interesting opportunity for US LPs when it comes to startups. Stebbings noted that the majority of the fund’s supporters are outside the United States, contributing more than half of the institutional funding. “I never wanted to go to MIT as a student,” Stebbings said. “I’m thrilled that they decided to provide me with investment capital.”
— European venture capital has a strong advantage when it comes to connecting with European startups.
Venture capitalists and successful investor-turned-founders like Axel have an established presence in London and the wider region. However, many of them still invest in 20VC. why? Stebbings has a very personal face to his company, helping his company and other companies avoid risk.
20VC says it has a total of 40 founders from companies such as Atlassian, Candy Crush, Canva, Capital One, Datadog, Deliveroo, Eventbrite, Iconiq, Procore, Spotify, UiPath, and Vinted. General partners Accel, Benchmark, Coatue, Cyberstarts, Founder Collective, Founders Fund, Khosla, NEA, TCV and Thrive all also participate in the fund.
“We’re also very grounded for U.S. funds,” he said.
Stebbings has capitalized on the zeitgeist as an online creator who built a successful business (and brand) around content momentum. In his case, that business is in the venture capital space, but he leverages his profile to help open doors and land term sheets.
“The media platforms have been really helpful,” he said. 20VC was essentially a “micro-VC” when it debuted in 2020, investing just $8.3 million and typically piggybacking on seed rounds. It currently has over 50 million views on TikTok and YouTube, which is a big number for baseball’s de facto VC and startup. “Having Sam Altman or Marc Benioff on the show makes a big difference. The founders really want to take your money.”
Stebbings himself is not a trained engineer. He was studying law at university when he started 20VC, but dropped out when everything took off. And he’s not even trying to hide this.
“I’m not interested in technology,” he said when asked if there was a category that was gaining attention right now. “I follow great entrepreneurs and I think it’s complete bullshit to think we’re smarter than the market. If there’s one thing we have to learn, it’s that great entrepreneurs… If that’s the case, then my job is simply to find the best founders before anyone else.”
More than that, his selling point from early on was that he brought operational experience to portfolio companies.
“20 VC has a revenue of over £10m and is a highly profitable and sustainable business,” he said. “No, I’m not a technology founder, but an operator. I work 15 hours a day, seven days a week, and have been doing it for years.”
Now, that space has expanded even further, with Stebbings’ team at 20VC running what Stebbings calls “sub-funds” in categories such as sales, product and growth, with operator experience. Run by people with their own carry and explore. Interesting companies (and founders) that could benefit from practical advice in these areas.
But even though Stebbings broke the mold on how VCs are formed, he still hasn’t changed the economics of VCs. He said it was still “just like any other market” with “1 percent of companies making 90 percent of the profits.”
Maybe that’s not such a bad thing? “We can do more to normalize it in Europe and encourage trying and failing,” he said.
In his opinion, this highly uneven calculus for VCs may ironically increase their chances of winning big, not reduce them. “Venture profits will decline overall, but for the 1%, they will be much, much bigger and better than they have been in the past, because the scale of the results will be much, much better than they have been in the past. “Because it’s big,” he predicted.
That being said, Stebbings is still waiting on his “MEGA” payment. Many of the companies he invested in were still relatively young, the IPO market was still fairly dead, and some of the early companies actually showed that 20VC was US-focused when it was first founded. As such, there will be no major withdrawal from the 20VC portfolio. There is no list yet. The closest one, he said, would be London game studio Tripledot. The company is valued at just over $1 billion, according to PitchBook, and last raised in 2022, with this round led by 20VC valued at nearly $180 million.
