Software investor EVP is raising $100m for its fourth fund

“With $100 million, that is a 15-company portfolio, and it lets us invest entirely within our strategy of making 15 $4 million-odd investments, and then having 50 per cent of the fund for follow-ons.”

The raise of EVP’s fourth fund comes on the back of its third $50 million fund, raised in 2020, being fully deployed.

From EVP’s first fund, the VC has had three exits, coming from its smallest positions, including home services marketplace start-up UrbanYou. It still has eight assets in the fund, with its core holdings in Ignition, online booking platform Rezdy and job management platform Fergus.

The firm typically leads the rounds in which it participates, and always takes a board seat.

Some of EVP’s more recent investments include Canibuild, AI personalisation platform Particular Audience and freight forwarding software platform Explorate.

The larger $100 million fund size is in line with the increasing value of Series A rounds. EVP’s average investment size has gone from a touch below $2 million in 2016, to $3.5 million in its third fund.

“Consistent with most folks, we’re seeing a good 100 companies each month. We made seven investments off 1200 opportunities last year,” EVP partner Justin Lipman said.

“But we’re focused on cutting through the large top of the funnel and finding the B2B software companies. We’ve spent time cultivating strong relationships with a few hundred companies in the region that by virtue of their business model, are companies we invest in.”

EVP plans to close the first tranche of capital for the new fund by the end of June. It is already well on its way to achieving this, with the EVP partners collectively committing to contribute $15 million to $20 million to the new fund.

Despite the downturn in public market sentiment towards tech stocks, Mr Leibman said that had not yet flowed through to the Series A stage of the market, and he did not think the fund would have any issue raising capital.

As it is, he said the fund takes a conservative approach to valuations.

“We hold assets at the value of the last third-party financing round, or cost. The average revenue growth rate of our last fund is 185 per cent year-on-year ... so these companies are an order of magnitude larger now [than when we invested],” he said.