European Investment Fund backs female-led Crowberry Capital, supporting Iceland’s largest-ever venture capital fund, Crowberry II

• The European Investment Fund has signed a €20 million participation in the Crowberry Fund II, with backing from the European Union’s InnovFin Equity programme.
• Crowberry Capital’s second fund will support early-stage ICT companies in Iceland and the Nordics.
• The female-founded venture capital fund is expected to tap into a market gap and potentially improve access to finance for women-led businesses.

The European Investment Fund (EIF), with the backing of the European Union’s InnovFin — finance for innovators programme, has signed a participation of €20 million in the Crowberry Fund II, the largest venture capital fund operating out of Iceland. The €76 million fund will focus mainly on early-stage ICT companies; most notably in fintech, enterprise software, games, consumer, and health tech sectors. A second close — bringing in an additional €30 million — is planned for July 2022.

This is the first InnovFin Equity investment in Iceland, one of the first non-EU countries to access Horizon 2020, the EU Framework Programme for Research and Innovation, back in 2014.

Other investors include Icelandic pension funds, several family offices, and angels including David Helgason, founder of Unity Technologies.

“In recent years, the level of venture capital funding in Iceland has steadily grown and Crowberry has emerged as a very credible venture capital manager. The team is well positioned to leverage the clear gender gap identified in venture capital funding which, in itself, represents a strong market opportunity,” added EIF Chief Executive Alain Godard. “The EIF takes pride in supporting underserved market segments directly but also indirectly, by building up equity ecosystems, providing structuring insight and helping to improve investment readiness. We value and support diversity, and this investment represents an example of how women can break down barriers and create opportunities for venturing into investments and entrepreneurship roles.”

Mariya Gabriel, European Commissioner for Innovation, Research, Culture, Education and Youth, said: “Europe needs more diverse, women-led funds and Iceland is leading by example. I am pleased that together with the EIF we are backing Crowberry in its quest to support Nordic startups that are at the forefront of technology innovation. I hope that their success and impact will serve as a model for future female founders.”

EU Ambassador to Iceland Lucie Samcová - Hall Allen commented: “I am extremely pleased to see this partnership between the EU and Crowberry Capital come to fruition. I believe that there is great untapped opportunity to be found in women-led businesses. Iceland and the EU are very close partners, through the EEA Agreement, and this EIF funding reminds us of how beneficial that cooperation is to both sides.”

Crowberry II fund specifics

Crowberry II will support early-stage tech entrepreneurs in the Nordics and maintain a focus on a broad range of business-to-business and business-to-consumer seed-stage companies. A precedent for this variety of investment was set by Crowberry I (a $40 million fund launched in 2017), which supported companies from multiple sectors including gaming, software as a service, health tech, and fintech. As with its previous fund, Crowberry Capital focuses on supporting and enhancing businesses in emerging tech sectors, rather than pursuing short-term exits from seemingly safe bets.

Since its launch in 2017, Crowberry Capital has invested in, and intends to continue to support, every configuration of team: female-only, male-only, or mixed. However, Crowberry Capital intends Crowberry II to enhance its mission to support different voices, correspondingly bringing new opportunities and strengths to the Nordic startup ecosystem. As Hekla Arnardottir comments, “An incorrect assumption is that because we are women, we are only interested in supporting female founders. As our investment record shows, we support companies because they are game changers, irrespective of the gender of their senior team members. However, we also benefit, as an all-female team, from a circumspection which means that we can see potential in businesses and sectors which are typically overlooked by others in our space. Inclusivity is good for business, and through being open and approachable, your deal flow multiplies in parallel to your talent pool, and businesses are built with a broader potential user base. It’s crazy that in 2020, female-led startups received just 2.3% of venture capital funding, yet Crowberry considers this to be an opportunity: where the Nordics lead in gender equality on a societal level, we want to show that the region can also show the way in terms of inventive venture support.” Crowberry’s previous fund (Crowberry I) featured 15 companies, of which 33% had female CEOs.

With its new fund, Crowberry Capital is happy to commit early either as a lead investor or as part of a syndicate. According to Jenny Ruth Hrafnsdottir, “Crowberry is focused on seed-stage ICT companies and monitors trends and innovation emerging from the Nordics. We have the courage to commit early, and a track record demonstrating our ability to find value before market validation, proving that when companies are backed early — like our portfolio company, Icelandic fintech, Monerium, which became the first to issue the euro on blockchain in a regulated and redeemable way — they can really thrive. Our door is open as much to future investment partners as it is to startups seeking support and by placing the team element at the core of our culture from the start, we have built up an extensive network which we will activate through Crowberry II.” In Crowberry Capital’s first fund, Crowberry I, syndications around investments involved Andreessen Horowitz (a16z), Menlo Ventures, Tencent, Fly Ventures, Inreach, and Norrsken.

Crowberry Capital — spotting winners and championing inclusivity and diversity

As the only major Nordic venture fund headed by an all-female team, Crowberry Capital has achieved recognition for providing alternative perspectives and voices in an industry and sector that offers cutting-edge technology, yet remains unprogressive in many respects. In interviews and international news articles, Crowberry Capital senior team members have highlighted that the lack of female investors is the conclusion of a self-perpetuating cycle that starts with too few female founders, and have called out the exclusionary culture of sauna events at Nordic tech meet-ups which reinforces deal-making between all-male partygoers.

Helga Valfells from Crowberry Capital comments: “We saw that there was a gap in the market when it came to early-stage funding in the Nordics. We realised that we could have greater impact — and make real change — by founding our own fund. So we resigned from our very comfortable roles with a large team and started out like true entrepreneurs in 2017 with nothing and raised our first fund in six months. At this juncture, we are delighted to welcome the EIF as a shareholder of our second fund and we are grateful for their belief in us, our work in Iceland, and the other Nordic countries.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. Since its first project in Norway, in 1974, the EIB Group has made available over €6 billion to support projects in the EFTA region, about €5 billion through the EIB and €1.1 billion through the EIF. In Iceland alone, the EIB Group has made available nearly €1.2 billion over the years (total of EIB and EIF financing).

This investment is supported by InnovFin Equity with the financial backing of the European Union under Horizon 2020, the Framework Programme for Research and Innovation (2014-2020). Through or alongside selected venture capital, business angels, technology transfer funds and funds-of-funds, the European Union provides risk capital financing to enterprises, research organisations and universities in their proof-of-concept, pre-seed, seed, startup and other early-stage phases allowing them to set up or reach their next stage of development.

Crowberry Capital is an Icelandic venture capital fund manager focusing on early-stage ICT companies with a specific focus on fintech, enterprise software, games, consumer, and health tech. Based in Reykjavík since 2017, Crowberry supports companies in Iceland and throughout the Nordics, as well as Western-Europe and the United States.

Press contacts:

EIB Group:Tim Smit, Tel: +352 691 28 64 23, t.smit@eib.org, Follow us on Twitter@eif_eu
Website: www.eif.org - Press Office: +352 4379 21000 – press@eib.org

Crowberry Capital: Benjamin Webb, +44 7930 408 224, benjamin@deliberate-pr.com
European Commission: Flora Matthaes, +32 460 755148, flora.matthaes@ec.europa.eu
EU Embassy to Iceland: Klemens Þrastarson, +354 694 4205, klemens.thrastarson@eeas.europa.eu