Less than a year after raising their first fund focused on Gen Z founders, Madrid-based Enzo Ventures is back with a new investment vehicle aimed at Europe’s young entrepreneurs. The new €20m seed fund will write initial cheques of up to €400k, and participate in follow-on investments going up to €3m.
Back in March 2021, Sifted spoke to Enzo’s partners (former founders themselves) — Markus Törstedt, Edgar Vicente and Iván Fernández — to hear about why three lads in their early 20s make trustworthy investors.
“[As former founders] we didn’t have a previous network. We didn’t have this experience of rolling out products to potential clients. We needed support knowing if a term sheet was alright. Those three pillars are where we struggled, and where our founders will be supported,” they told us.
They’re calling that first microfund Fund Zero (let’s call it Fund Z for short) and say that, while small at €500k, it was a crucial move towards establishing their reputation as young investors.
“It was necessary for us to demonstrate that we could join very competitive investment rounds across Europe,” says Törstedt, pointing to co-investments with the likes of Indico Capital Partners in Lisbon and K Fund in Madrid. “I don't think that people underestimate us, but for sure we need more years [of investing experience] and more results.”
The new fund will acquire Fund Z, meaning it will launch with nine portfolio companies including fintech app Balio, no-code app building tool Noloco and sales performance tool Uhub. Törstedt says that Fund Z’s LPs will get a 2x return on the deal.
As three young former founders who’ve sold startups, Enzo’s partners believe that they’ve got the experience and temperament to understand other young founders’ needs.
“The fact that we’re a Gen Z founding team means that we leverage the generational connection to build closer and more transparent relationships with young founders,” says Törstedt, adding that the biggest issue for younger entrepreneurs is building a network.
“We haven’t had to babysit them. We try to provide more synergistic support,” he says. “For instance with Bankflip (one of Enzo’s portfolio companies), we introduced the founder to Notion Capital, and he managed to get a cheque from them.”
Törstedt also claims that being exposed to young founders has given him cause for optimism, in terms of the attitude they’re bringing to Europe’s tech scene.
We haven’t had to babysit [our portfolio]. We try to provide more synergistic support
“For sure we're seeing that the companies that are being created are leaning more towards the wellbeing of society and the wellbeing of the environment,” he says. “Apart from that, it’s bluntly exciting to work with fresh and creative minds that have grown up with technology.”
Of Enzo’s investments to date, the portfolio seems more focused on software solutions for sales teams than it does on saving the planet — only one of the nine companies, local grocery provider Tasteit, makes any mention of sustainability on its website. Perhaps that's an indicator that, even for planet-conscious Gen Z, lucrative SaaS business models are still what investors are looking for.
As Sifted reported when Enzo launched, the three partners in their early 20s aren’t going it alone. The fund is also supported by 12 “operating partners” — more experienced entrepreneurs and investors who have the option to coinvest with Enzo and give portfolio companies guidance and advice.
Some of the names helping Enzo with their new fund include Goi founder Yaiza Canosa, Internet of Everything Corp cofounder Mattias Bergstrom, serial entrepreneur and Exoticca CEO Pere Valles, Justos cofounder Dhaval Chadha and Mindsurance cofounder Viktoria Lindner.
Törstedt explains that when Enzo participates in follow-ons, the operating partners who are specialised in that given vertical will get a capital stake in the investment.
“Follow-on investments will be made through a special purpose vehicle (SPV) and the operating partners will get a stake in that SPV,” he says. “Those operating partners are categorised by different industries and sub-industries. For instance, if we follow on with a finance company, the three operating partners that we have in the finance vertical will get a capitalised stake in the SPV.”
Our common characteristic is that we’re doers and passionate about what we do
The fund is also partnered with London-based VC Profounders Capital and hosted by asset management company Moira Capital, just in case you were worried about the Gen Zers cashing in and escaping to the metaverse with their investors’ money.
Of Enzo’s nine investments to date, Törstedt says that 60% have been in Spain, with 40% coming from the rest of Europe. With the new fund the partners are hoping to widen their reach. Vicente and Fernández are planning to move to London and Paris respectively to set up offices there, showing a big commitment to sourcing Europe’s best young startups.
It’s a far cry from how most of us probably spent our early 20s, but Törstedt isn't about to let society's norms get in the way of investment opportunities: “Our common characteristic is that we’re doers and passionate about what we do. Our leverage here is that, early in our lives, we pursued our passion to the fullest. That is also combined with a fundamental soft skill which is summarised in attitude.”
Make of that what you will.