Technology

Draper Esprit, the publicly-listed VC firm based in London, is putting down further roots across Europe in cooperation with German VC Earlybird.

The &strategic partnership& sees Draper invest an initial €18 million in the latest Earlybird Fund VI (which closed this week at €175 million, above its initial target, apparently), with a commitment to invest a further €17 million or so per annum over the next four years.

The tie up will also mean the two VCs will work together beyond Draper simply being an LP in Earlybird, such as sharing deal-flow and investment resources. In addition, Draper is taking a minority stake in the management company of Earlybird Fund VI via the issuing of new Draper Esprit shares to Earlybird partners.

By putting money into Earlybird Fund VI, Draper has also indirectly acquired a minority stake in a number of startups that have already received investment from the fund. They include Shapeshift, Everoad, Movinga, Fraugster, Medidate, Xain, and Crossengage.

However, explained Draper Esprit CEO and co-founder Simon Cook in a call this morning, the partnership is really about the two firmleveraging the brand recognition of their broader and respective portfolios.

In aggregate, both firms say they count 100 &high growth& companies across Europe in their respective portfolios. They include the likes of Revolut, Graze, UI Path, N26, Transferwise, Ledger, Graphcore and Peak Games.

Meanwhile, in a European VC market where almost every local early-stage VC is becoming &pan-European,& the two firms met to discuss how they might work together. As the conversation progressed, it became clear that a more formal partnership fitted the ambitions of both VCs as they both attempt to have a larger presence across the continent.

In a corresponding blog post, Draper Esprit reiterates that it invests in series A, B and beyond, whereas Earlybird is focused on seed stage to series A. So, whilst there is some overlap, it won&t be hard for the two firms to divvy up deals and Cook told me Draper Esprit will share all relevant deal-flow with Earlybird and where it makes sense a partner at either firm will take the lead.

Draper Esprit is already an investor/LP in a number of other European early-stage funds, including pre-seed and seed investor Seedcamp, and Episode 1.

&We invest from offices in the U.K., Ireland, and Paris. They, from Berlin, Munich, Istanbul. We raise money via the public markets and through our EIS and VCT funds, they from traditional private LPs,& adds the VC firm.

French venture capital firm ISAI just raised a new $175 million fund (€150 million) called ISAI Expansion II. This fund is designed for later stage investments.

The firm says that it managed to raise this fund in less than three months. This is a growth fund and the team plans to invest between $6 million and $35 million per deal (between €5 million and €30 million).

ISAI first started with a seed fund back in 2010. The company raised a $41 million fund (€35 million) and invested in BlaBlaCar shortly after that. The firm has raised a growth fund and another seed fund since then.

If you include todaynew fund, ISAI has raised over $350 million in total (€300 million). So ISAI Expansion II is by far the biggest fund to date.

Limited partners include dozens of successful tech entrepreneurs as well as institutional partners. Many existing investors invested once again in ISAInew fund. Some entrepreneurs joined the list for the first time.

With the previous ISAI Expansion fund, the firm invested in nine companies over five years. And ISAI already sold its shares in two companies, Hospimedia and Labelium.

ISAI also says that it can help entrepreneurs using owner buy-out transactions. By creating a holding company, this type of operations lets entrepreneurs cash out, buy shares from existing minor investors and work with a new investor.

More interestingly, ISAI doesn&t necessarily want to focus on Paris-based tech startups. The firm is also looking for investments in more traditional companies that aren&t yet taking advantage of digital opportunities.

Ride-hailing giant Uber is in talks over a possible merger with Middle East rival Careem, according toBloomberg— citing three people familiar with the matter.

The report suggests various deal structures have been discussed, although it also says that no deal has been reached — nor may ever be reached, as discussions are ongoing and may not come to anything.

Bloombergsources told it that Uber has said it would need to own more than half of the combined company, if not buy Careem outright.

Among the possible arrangements that have been discussed are for Careemcurrent leaders to manage a new combined business, day to day, with potentially both brands being retained in local markets.

Another proposal would have Uber outright acquire Careem.

Bloomberg also reports that Dubai-based Careem is in talks with investors to raise $500 million, which it says could value the ride-hailing company atabout $1.5BN. Careem is said to have held early talks with banks about a potential IPO in January.

Neither company has publicly confirmed any talks.

An Uber spokesman declined to commentwhen asked to confirm or deny talks with Careem.

While a Careem spokeswoman, Maha Abouelenein, told us: &We do not comment on rumors. Our focus remains to build the leading internet platform for the region, from the region. That means expanding to new markets and doubling down on our existing markets by adding new products and services to the platform. We are only getting started.&

Uber has been reconfiguring its global business for several years now, pulling out of South East Asiaearlier this year after agreeing to sell its business to local rival Grab — while also taking a minority stake in the competitor.

And Uber did a similarexit deal with another rival — Didi — in China back in 2016.

Last year it also threw its lot in with Yandex.Taxi in Russia, with the pair combining efforts via a joint venture — albeit one which gave Yandex the majority share.

But Uber has been talking up its position and potential in the Middle East — with CEODara Khosrowshahi telling a conference in May that he believes it can be the &winning player& in the market, as well as inIndia and Africa, and vowing it would&control our own destiny& in those markets.

That does not necessary take a Careem-Uber deal off the table, of course, though the (public) claim from Uber is that itnot willing to settle for a minority stake in the region, as it has elsewhere.

Responding in April to a question from CNBCabout whether it might acquire Careem, UberCOO Barney Harfordruled out doing any more transactions for minority stakes, saying: &It would be crazy for us as a hypergrowth company to not engage in conversations about potential partnerships. But we&ve been very clear, the markets that we remain in today are core markets for us.&

Harford also claimed Uber was positioned to be able to invest in its chosen growth markets on &an indefinite basis&, thanks to having reached profitability in other markets. Italso targeting 2019 for an IPO.

In March the Financial Timesreported that Uber was in talks with Indian rival Ola over another possible merger — and the newspapersources poured cold water on the notion of Uber taking a minority stake there too.

Of course Uber may not want to have to shrink its already retrenched global ambitions. But it may have to if it gets out-competed in its chosen plum markets.

Hence Careemchest-puffing talk about just getting started — provided it can convince its investors to screw their courage to the sticking place and stay on board for the ride.

Investors in Careem, which closed a $500M Series E round a year ago at a $1BN+ valuation, include Saudi-based VC Kingdom Holding, German automakerDaimler, and Japanese tech giant Rakuten — which reportedly led the Series E.

Oskar Mielczarek de la Miel, a managing partner at Rakuten Capital who leads on its mobility investments and is also a Careem board member, declined to comment on the rumors of Uber-Careem merger talks when we asked to chat.

But he was happy to talk up the broader opportunity that investors seen coming down the road for ridesharing, telling us:&If you look at the industry everyone is talking to everyone, and while consolidation is an obvious trend, it won&t be limited to the ridesharing players but draw other tech companies, OEMs and payment companies, to name a few.&

According to Careemwebsite, the ride-hailing firm operates in 15 countries, mostly (but not only) across the Middle East, offering its services in around 80 cities in all.

While Uberwebsite lists it being active in 15 cities in the Middle East and 15 in Africa.