HomeUKEpisode 1 Closes £76M Third Early Stage Fund

Episode 1 Closes £76M Third Early Stage Fund

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Episode 1, a London, UK-based early stage venture capital firm, closed its third fund, at £76m.

The raise included a £20m cornerstone commitment from British Patient Capital and the National Security Strategic Investment Fund, as well as Molten. Over one-third of the new fund’s LPs are former or current founders, including 21 founders previously backed by Episode 1. Other founder LPs include Alex Chesterman (founder of Zoopla and Cazoo), Aidan Corbett (founder of Wayflyer), Aron Gelbard (founder of Bloom & Wild), and Alex MacDonald (founder of Velocity Black and Sequel). 

This latest vehicle will enable Episode 1 to back a new generation of B2B innovators at pre-seed and seed stage, as well as deepen their reputation as the UK’s most innovative early stage investor. The fund will be making investments of between £250k and £3m in pre-seed and seed stage startups, with a significant amount allocated for follow-ons. Episode 1 plans to make between 10 to 15 investments per year in software-led companies operating primarily in the UK which focus on key areas including AI, TechBio, open-source, software infrastructure, healthtech and marketplaces. There will also be some allocation available for US and European-based companies that have a UK presence. The team, which has already begun deploying capital from the fund, will also offer support to help source senior hires; optimize portfolio companies’ future fundraises to set them up for a Series A; etc.

Launched in 2013 and led by Hector Mason, General Partner, Episode 1 has backed over 69 portfolio companies to date, including Carwow, Huboo, CloudNC, Raft, Robin AI, Fatmap and Omnipresent. 

73% of portfolio companies from their prior fund have gone on to raise a Series A – ~3x higher than the average pre-seed and seed graduation rate. The team has also overseen high-profile exits including Fatmap (acquired by Strava), Passfort (Moody’s), Feedr (Compass Group), Touch Surgery (Medtronic) and Atlas (Meta).