At a time when several well-established venture capital firms have fallen short of their fundraising targets, Headline has closed its fourth global growth fund on $865 million, more than double the amount it was aiming for.
“The oversubscription was split fairly evenly between existing and new investors,” Mathias Schiller, a founding partner at Headline, tells Venture Capital Journal.
For investors that have been desperate for DPI, Headline was able to show more than $6 billion of total exit value for its portfolio companies in 2023, Schiller says. The firm proved “it can drive consistent returns in every market cycle,” he notes. “I believe this drove the interest from LPs to both grow with us and start anew.”
Fundraising took a little over two years to complete. Headline Global Growth IV began fundraising in June 2022 with a $400 million target, according to a regulatory filing. As of June 13 of this year, the fund had closed on $804.3 million from 86 investors, a subsequent filing shows.
The firm got a major boost from the European Investment Fund, which committed €350 million, or about 45 percent of the total fund, according to its 2023 annual report. EIF made the commitment through the European Tech Champions Initiative, a €3.75 billion fund of funds that it manages on behalf of the European Investment Bank and the governments of Germany, France, Spain, Italy and Belgium.
“Europe invests significantly less in venture capital compared to the US and Asia,” EIF chief executive Marjut Falkstedt said in a statement. “This funding gap not only limits our start-ups’ ability to scale but also risks losing them to foreign markets where capital is more readily available. This is a trend that we are committed to reversing.”
Besides EIF, French state bank BPI France and KfW Capital, the venture subsidiary of German state-owned development bank KfW, also committed to the fund, according to a report by Sifted.
Attracting top talent
Headline began to conceive of a fully built-out growth team many years ago, Schiller tells VCJ. “As we gained conviction in the direction of the strategy, we started focusing on team composition and profiles approximately two years ago, and spoke to many candidates. Given Headline’s culture, stability and opportunity set, we have been pleasantly surprised by the incredible talent available to us in the market.”
The growth team is led by Shalini Rao, who joined in June after serving as a general partner with TCV. Other team members include Trevor Neff, who worked at Sound Ventures and Bessemer Venture Partners; Reda Bensaid, who came from EQT Group; Jake Horwitz, who worked at Insight Partners; and Nancy Xiao, who was an investor at Maven Clinic and a principal at Bond. The team will eventually comprise 10 investors.
While this is Headline’s fourth growth vehicle since its inception in 1998, it is the first to focus mostly on net-new investments “where they are actually bringing on a team of dedicated growth-focused investors who are used to underwriting growth-stage companies,” says Xiao, who joined Headline last month. “Series B through pre-IPO had been my main focus for all of my venture career,” as it was for other new hires to the growth team.
Global Growth Fund IV will invest in 20-25 companies from Series B to later stages across the world over the next three to four years, with checks between roughly $20 million and $70 million. Investments will focus primarily on Headline’s core markets in the US and Europe.
That’s not to say the new fund won’t continue to do follow-on investments, but those will be a smaller portion of the portfolio. “Certainly, if there are breakouts, we would love to be able to support those companies in all stages of their scaling,” Xiao tells VCJ. “But the primary focus of the fund is net-new investments at the growth stage.”
Headline’s prior growth funds focused on doubling down on companies in its existing portfolio. “I definitely think the size of the [new] fund enabled the broader Headline team to think in more ambitious terms,” she says. “They wouldn’t have hired a whole new team if it was in line with their prior growth fund sizes.”
The growth team members bring lessons from all their prior workplaces, combining varying investment approaches, deep networks, investment committee structures, and stage and sector expertise, Xiao notes.
“We’re deciding along the way how we want to shape this strategy in order to best align our incentives with the success of the founders we work with,” she says.
As a generalist fund, Global Growth Fund IV will invest in a range of verticals from consumer and healthcare to software and fintech. The new fund is designed to capture the inflection points of growth, which the firm has said will enable it to expand the universe of companies it invests in.
The growth team will use its proprietary AI-enabled platforms Searchlight and DeepDive, which Headline has built over the past several years, to enhance its ability to source companies, connect with founders and analyze business efficiencies. This technology-driven approach enables the team to engage with around 80 percent of companies that have raised Series A financings each month, Headline says.
Headline also stands to benefit from having an on-ground presence in various geographical regions, with offices in London, Paris, Berlin, Tokyo, Taipei and Sao Paolo, in addition to its headquarters in San Francisco.
“We’ve all been at US-based funds that invest globally but don’t have boots on the ground,” Xiao says. “It’s really just all by Zoom, or a once-a-quarter trip to a certain region, or a once-a-year trip to a certain region. That actual continuity of relationships with brilliant partners who speak the language, understand local idiosyncrasies, the regulatory environments, the local talent markets – all the nuance of various cultures and incentive structures – I think that really makes a difference.”
At a time when several well-established venture capital firms have fallen short of their fundraising targets, Headline has closed its fourth global growth fund on $865 million, more than double the amount it was aiming for.
“The oversubscription was split fairly evenly between existing and new investors,” Mathias Schiller, a founding partner at Headline, tells Venture Capital Journal.
For investors that have been desperate for DPI, Headline was able to show more than $6 billion of total exit value for its portfolio companies in 2023, Schiller says. The firm proved “it can drive consistent returns in every market cycle,” he notes. “I believe this drove the interest from LPs to both grow with us and start anew.”
Fundraising took a little over two years to complete. Headline Global Growth IV began fundraising in June 2022 with a $400 million target, according to a regulatory filing. As of June 13 of this year, the fund had closed on $804.3 million from 86 investors, a subsequent filing shows.
The firm got a major boost from the European Investment Fund, which committed €350 million, or about 45 percent of the total fund, according to its 2023 annual report. EIF made the commitment through the European Tech Champions Initiative, a €3.75 billion fund of funds that it manages on behalf of the European Investment Bank and the governments of Germany, France, Spain, Italy and Belgium.
“Europe invests significantly less in venture capital compared to the US and Asia,” EIF chief executive Marjut Falkstedt said in a statement. “This funding gap not only limits our start-ups’ ability to scale but also risks losing them to foreign markets where capital is more readily available. This is a trend that we are committed to reversing.”
Besides EIF, French state bank BPI France and KfW Capital, the venture subsidiary of German state-owned development bank KfW, also committed to the fund, according to a report by Sifted.
Attracting top talent
Headline began to conceive of a fully built-out growth team many years ago, Schiller tells VCJ. “As we gained conviction in the direction of the strategy, we started focusing on team composition and profiles approximately two years ago, and spoke to many candidates. Given Headline’s culture, stability and opportunity set, we have been pleasantly surprised by the incredible talent available to us in the market.”
The growth team is led by Shalini Rao, who joined in June after serving as a general partner with TCV. Other team members include Trevor Neff, who worked at Sound Ventures and Bessemer Venture Partners; Reda Bensaid, who came from EQT Group; Jake Horwitz, who worked at Insight Partners; and Nancy Xiao, who was an investor at Maven Clinic and a principal at Bond. The team will eventually comprise 10 investors.
While this is Headline’s fourth growth vehicle since its inception in 1998, it is the first to focus mostly on net-new investments “where they are actually bringing on a team of dedicated growth-focused investors who are used to underwriting growth-stage companies,” says Xiao, who joined Headline last month. “Series B through pre-IPO had been my main focus for all of my venture career,” as it was for other new hires to the growth team.
Global Growth Fund IV will invest in 20-25 companies from Series B to later stages across the world over the next three to four years, with checks between roughly $20 million and $70 million. Investments will focus primarily on Headline’s core markets in the US and Europe.
That’s not to say the new fund won’t continue to do follow-on investments, but those will be a smaller portion of the portfolio. “Certainly, if there are breakouts, we would love to be able to support those companies in all stages of their scaling,” Xiao tells VCJ. “But the primary focus of the fund is net-new investments at the growth stage.”
Headline’s prior growth funds focused on doubling down on companies in its existing portfolio. “I definitely think the size of the [new] fund enabled the broader Headline team to think in more ambitious terms,” she says. “They wouldn’t have hired a whole new team if it was in line with their prior growth fund sizes.”
The growth team members bring lessons from all their prior workplaces, combining varying investment approaches, deep networks, investment committee structures, and stage and sector expertise, Xiao notes.
“We’re deciding along the way how we want to shape this strategy in order to best align our incentives with the success of the founders we work with,” she says.
As a generalist fund, Global Growth Fund IV will invest in a range of verticals from consumer and healthcare to software and fintech. The new fund is designed to capture the inflection points of growth, which the firm has said will enable it to expand the universe of companies it invests in.
The growth team will use its proprietary AI-enabled platforms Searchlight and DeepDive, which Headline has built over the past several years, to enhance its ability to source companies, connect with founders and analyze business efficiencies. This technology-driven approach enables the team to engage with around 80 percent of companies that have raised Series A financings each month, Headline says.
Headline also stands to benefit from having an on-ground presence in various geographical regions, with offices in London, Paris, Berlin, Tokyo, Taipei and Sao Paolo, in addition to its headquarters in San Francisco.
“We’ve all been at US-based funds that invest globally but don’t have boots on the ground,” Xiao says. “It’s really just all by Zoom, or a once-a-quarter trip to a certain region, or a once-a-year trip to a certain region. That actual continuity of relationships with brilliant partners who speak the language, understand local idiosyncrasies, the regulatory environments, the local talent markets – all the nuance of various cultures and incentive structures – I think that really makes a difference.”
