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Redalpine has closed its RAC VIII early-stage fund at USD $250 million, its largest early-stage vehicle to date.
The pan-European venture capital investor said the fund was oversubscribed, bringing its total assets under management to more than USD $1.4 billion. RAC VIII will back about 20 early-stage companies across Europe, mainly through Seed and Series A rounds, with initial investments ranging from USD $1 million to USD $15 million.
Founded in Zurich in 2006, the firm has built its strategy around software and science businesses, focusing on areas such as fusion energy, artificial intelligence, robotics and biotechnology. It now has offices in Zug, Berlin and London, as well as a presence in Silicon Valley.
According to the firm, half its investment team are trained scientists, including biologists, physicists and engineers. That mix has been central to its pitch to founders and institutional investors as competition for specialist technology deals has intensified.
Redalpine has backed more than 100 companies, which it says have created more than 10,000 jobs. Its portfolio companies have raised more than USD $3 billion, while businesses backed by its previous early-stage fund, RAC VII, have secured more than USD $1.1 billion in total funding since that vehicle closed.
Its holdings include Proxima Fusion, Mistral AI, N26, Basecamp Research and Microagi. Since 2023, 12 portfolio companies have exited, a notable figure at a time when technology exits have remained limited.
New deployments
The first investments from RAC VIII include Enact Intelligence, which is developing force intelligence technology for robotics; Helical, which is building a virtual AI lab for reproducible drug discovery; and Arlequin AI, which is working on a new AI architecture designed to protect critical systems.
Redalpine reviews more than 5,000 companies a year in search of a relatively small number of investments. The latest fund drew support from both returning and new limited partners, including Aviva Investors, Flexstone Partners and KfW.
The launch comes as European venture firms try to show they can keep more local technology growth in the region, particularly by attracting backing from domestic institutions such as pension investors. Redalpine said its wider platform now supports companies from Seed stage through to IPO.
Dr Michael Sidler, Founding Partner at redalpine, set the latest fund in the context of the firm's original thesis.
"Twenty years ago, we started redalpine with the conviction that the most important companies would emerge where software and science meet. That belief hasn't changed. With RAC VIII, we're excited to keep backing these founders early, before the opportunity is obvious," Sidler said.
Sebastian Becker, General Partner at redalpine, linked the strategy to shifts in the wider technology market.
"AI is leveling the playing field more than ever. The advantage now lies with whoever understands the underlying science and the hardest problems best, and that has always been Europe's strength. We're seeing a new generation of highly ambitious founders who are determined to build and scale world-leading tech companies from here and establish Europe as a global technology power," Becker said.
Founders in the portfolio also pointed to the role specialist investors can play in technically demanding sectors. Proxima Fusion, one of the companies backed by RAC VII, has been among the better-known names in Europe's fusion sector.
"redalpine was early in understanding Proxima's potential for Europe's energy future and led our Seed round. With RAC VIII, they can bring that same speed and technical depth to more founders tackling genuinely hard and important problems," said Francesco Sciortino, Co-Founder & CEO of Proxima Fusion.
Institutional investors are also using specialist venture funds to gain exposure to earlier-stage technology businesses. Aviva Investors was among the backers named by the firm.
"redalpine has a proven track record in backing fantastic European businesses that are at the forefront of technology and scientific innovation. At a time when global VC markets are competing more intensely than ever for investor capital, we are thrilled to partner with the team at redalpine and believe it can help us gain greater access to support some of the most exciting, high-growth, disruptive and innovative start-ups across the UK and Europe. We view partnerships like this as being vital for the continued growth of our portfolio and, ultimately, supporting the delivery of long-term investment outcomes for pension investors," said Cynthia Chen, Head of Fintech at Aviva Investors.
"European self-confidence is back, and nowhere more visibly than among institutional investors, who are now putting real conviction behind European technology. Our fund platform lets us back founders from Seed to scale, so we can keep supporting them as they grow into global category leaders," said Rafael Hubatschek, Partner and Head of Investor Relations at redalpine.