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Dude, We're Huge: Inside The Elaia-Lazard Plan To Build A Growth Equity Giant

The influential early-stage VC is embarking on a new partnership with global financial giant Lazard. The deal could transform both -- and be another step toward closing Europe's late-stage funding gap.

(Updated April 19, 2024: Elaia and Lazard finalized and signed an agreement to create a new Private Equity Asset Management Company called Lazard
Elaia Capital. Lazard will own 75% of the new firm and Elaia will own the other 25%. Lazard is also taking a stake in Elaia, with an option to eventually buy the whole VC firm. Xavier Lazarus, co-founder and Managing Partner of Elaia, will run the PE firm and hire a new investment team. The firm hopes to make its first investment in early 2025, but is still awaiting formal approval by French financial regulators.)

While most people in the tech sector were quietly winding down in mid-December for the holidays, Elaia decided to uncork one last seismic news bomb. One of France's OG VC funds announced a surprising partnership with global financial giant Lazard to create a Growth Equity Fund of "several hundreds of millions."

That is only the TL;DR version of the announcement. Lazard is taking a minority stake in Elaia's classic early-stage fund business, with hints that one day it could turn into a majority stake – or even outright ownership. Meanwhile, the new bosom financial buddies have created a joint venture to raise the new fund – in which Lazard will be a majority investor – by leveraging Elaia's tech investing reputation and Lazard's global sales team.

At the center of the deal is Elaia co-founder and Managing Partner Xavier Lazarus. He will continue to run Elaia's established early-stage business as well as the Growth Equity fund. That will require building a new late-stage team from scratch and refining the pitch to attract the remaining investors.

The two sides are still trying to iron out the final details of the deal. Officially, they announced "exclusive negotiations to form a strategic partnership and launch a private investment platform." But they were confident enough that it would close to go public. Assuming it comes to fruition, the new Lazard-Elaia fund (official name still TBD), will represent an ambitious attempt to address the Growth Equity Gap that stands as one of Europe's major weaknesses.

Lazarus, who co-founded Elaia more than 20 years ago, said this new phase is the result of two partners who are in just the right place to offer complimentary strengths to serve as the foundation for this new phase.

"I think this is a meeting of two organizations that have a common will," Lazarus said. "Coming from two different views but getting to the same conclusion. We ended up discussing this and found out that we were very compatible."

From left to right: Elaia Managing Partner Xavier Lazarus, Lazard Strategic Director Sophie de Nadaillac, and Lazard CEO François-Marc Durand.
From left to right: Elaia Managing Partner Xavier Lazarus, Lazard Strategic Director Sophie de Nadaillac, and Lazard CEO François-Marc Durand.

In The Beginning

Lazarus co-founded Elaia in 20o2 in Philippe Gire. Lazarus was an entrepreneur who joined a large French bank to build a VC division but eventually decided to strike out on his own.

Starting a VC firm in France at the time was swimming against multiple currents. Not only had the dot-com bust soured much of the investment world on tech, but scrounging money from the limited number of European LPs was tough. Elaia beat those odds and has now backed 170 companies, of which 36 have made exits, according to Dealroom.

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