By the time a startup approaches Claret Capital, it has already been through the venture capital machine.
The company has raised its main rounds, built a business and is looking for capital to fund what comes next — but without giving away more equity. That is the gap Claret is addressing with its latest €575m fund.
“We're adding fuel to the rocket,” David Bateman, managing partner at Claret Capital, tells Pathfounders. “But someone else has to design the rocket, get it to the launchpad and get it off the ground.”
The growth debt investor provides debt to venture-backed companies three to five years after their main influx of venture funding with investments ranging from as little as €1-2m all the way up to €40-50m. For startups, it offers a less dilutive funding option, while for Claret it provides a more assured investment.
Since launching Fund IV, Claret has backed more than 27 innovators, including Billie, a B2B BNPL platform; Cinclus Pharma, a clinical-stage pharmaceutical company; PRODA, a commercial real estate software company; Inventiva, a clinical-stage biotech; and Surfe, a B2B sales-intelligence platform. It has so far deployed around 32% of this fund’s capital.
Claret typically “recycle[s] quite aggressively”, according to Bateman, typically lending most dollars twice and recycling close to 100% of a fund’s capital. That is made possible by a mix of up-front payments, amortisation and company acquisitions.
Since 2013, Claret has invested more than €1.5bn through its funds into the technology, life sciences and impact sectors across around 220 companies. The firm is referred around 1,000 companies a year and currently invests in around two a month.
But knowing when to invest is as important as knowing when not to, Bateman says. Often, he says, companies come to Claret too early. A big part of the job is learning when to say “not yet”.
But he says companies cannot be faulted for being too keen and looking for funding too early. It is instead part of Claret’s responsibility to make sure it does not put a startup at risk by providing it with too much debt funding too early on.
That judgement is becoming increasingly important as the European funding landscape changes.
“It’s all part of serving this European market more intently,” Bateman told Pathfounders. “Europe is becoming a little more of a self-contained island. We’re probably going to get less capital from the States over time and we’re probably going to sell less to the States over time.”
This varies by sector, of course, but Bateman points to a rise in the need for European sovereignty following the start of the war in Ukraine, explaining Claret’s decision to expand its physical presence across mainland Europe to reflect where the funding is going.
Claret has always been a pan-European investor, but has historically been London-centric, with an office in the city. Germany is now its biggest single lending market, ahead of the UK, with France rounding out the top three.
Following the close of Fund IV, the firm plans to expand its pan-European platform, increasing its local presence across the continent’s key innovation hubs and adding new team members on the ground in Paris and Berlin.
The firm is actively open for new deals across all sectors, but Bateman is specifically hoping to see more quantum startups and, crucially, more evidence of strength in the industry as a whole.
“We would like quantum to generate revenue,” he said simply. “There are some amazing companies. They are doing fascinating things. They need customers.”
The technology is promising, but repeatable commercial revenue patterns have not yet been established. Claret wants to see a volume of customers across multiple companies before financing the sector broadly.
For now, the firm’s focus remains on companies that have moved beyond their initial venture funding and reached the point where debt can help finance their next stage of growth.
And as European companies increasingly look to build, sell and raise capital closer to home, Claret is positioning itself to lend into that changing market.