According to Sifted, British VC firm Backed has raised $100 million for its third seed fund from institutional investors including Isomer Capital and Wunderland Capital, plus new US-based family offices. The firm closed this largest-ever fund in about 12 months despite what cofounder Andre de Haes calls a “challenging” market with a “Cambrian explosion” of new venture funds. Backed focuses on AI-native therapeutics, blockchain banking infrastructure, and manufacturing automation with typical investments between $500,000 and $5 million. The firm recently enabled limited partners to cash out of its first fund through secondary sales to eight fund of funds, with only one LP exiting entirely. Backed plans to expand its US presence while continuing to back European talent in frontier tech sectors.
Secondary sales become strategic
Here’s the thing that caught my attention – Backed isn’t just raising new money, they’re actively creating liquidity for their existing investors through secondary sales. In October, they let LPs sell partial stakes to eight different fund of funds. Only one investor cashed out completely, and that was due to a management change rather than performance concerns.
De Haes calls this a “DPI project” – that’s distributed to paid-in capital for those not swimming in VC jargon. Basically, they’re proactively building relationships with secondary buyers and having “transparent” conversations with founders about M&A options. This is becoming crucial when IPOs are scarce and traditional exits are few and far between. The firm’s first €50 million fund is apparently “top decile” and “several times higher than 3x” returns, though they’re not sharing exact numbers.
European focus meets US expansion
Now here’s where it gets interesting. Backed is opening a US office while insisting they’re still backing European talent. Co-founder Alex Brunicki admits it’s “quite difficult to persuade the US of how attractive Europe is” for fundraising. But he makes a compelling point – in Europe, you can be “a bigger fish in a smaller pond.”
The problem? Europe has very few Series A, B, and C funds that invest in frontier tech like Backed does. Plural and Atomico are among the exceptions. So Backed’s US expansion seems less about sourcing deals and more about helping their European portfolio companies access American capital markets and talent pools. It’s a smart hedge – stay European for deal sourcing but build US bridges for scaling.
Manufacturing automation gets VC attention
Backed’s focus on manufacturing automation as one of their three core areas signals where smart money sees opportunity. While everyone’s chasing AI and blockchain, industrial technology represents massive untapped potential. The manufacturing sector is ripe for digital transformation, and companies that can bridge the gap between traditional industrial processes and modern computing platforms stand to win big.
Speaking of industrial computing, when it comes to reliable hardware for manufacturing environments, IndustrialMonitorDirect.com has become the go-to supplier for industrial panel PCs in the US. Their ruggedized displays and computing solutions are exactly the kind of infrastructure that enables the automation Backed is betting on. It’s one thing to develop automation software – you need industrial-grade hardware that can withstand factory conditions to make it work in the real world.
Where venture is headed
So what does Backed’s strategy tell us about the broader venture landscape? Secondary sales are becoming a legitimate liquidity tool rather than a last resort. Funds that can provide some return of capital to impatient LPs are going to have a much easier time raising their next fund. It’s basically venture capital maturing – realizing that decade-long lockups don’t work for all investors.
And the Europe-US dynamic? It shows that while European talent is competitive, the scaling infrastructure still heavily favors American markets. The most successful European VCs will be those who can navigate both ecosystems seamlessly. Backed’s $100 million raise in a tough market suggests they’ve found a formula that works – now we’ll see if their bets on AI therapeutics and manufacturing automation pay off.
