What: Varsity is a new pan-European Seed fund based in Paris that just announced its first closing of €80 million toward a €150 million goal it expects to reach by the end of the year.
At the center of Varsity is former Société Générale's Didier Valet who served as one of the bank's highest-ranking execs for almost two decades before leaving in 2018. Toward the end of that stint and over the past few years, Valet has become one of France's most prolific Business Angels. He wanted to scale up that investment work and expand beyond his base of fintech, so he created Varsity by teaming up with former Serena Capital partner Kamel Zeroual (who was also an Angel investor), and former Serena operations manager Florent Thomas.
"We saw that the combination of our skills as investors was making us relatively successful in winning some transactions," Valet said. "And on my side, I was ready to re-engage in an adventure that was a bit for the long term. And so the three of us decided to create Varsity."
Becoming An Angel: Given his prominent role in France's finance world, Valet became an influential figure with a massive Rolodex. But while still at SocGen (as the French call it), he had to be somewhat restrained in the number of types of investments he could make personally, particularly regarding fintech.
That changed when he departed in 2018. Valet has now made 70 investments as a Business Angel, with a high concentration of fintech deals. Those investments include French fintech unicorns Pennylane and Qonto. The full list of Business Angel deals can be found on his LinkedIn profile.
"The timing was lucky because, in late 2018 and the beginning of 2019, the fintech market in France really flourished," he said.
While he could leverage his network to an extent, he also had to build new ones that reached beyond the traditional financial world and into the early-stage startup world. Meanwhile, he also became an advisor to Bain and joined the board of VC firm InfraVia Capital Partners. He credits these experiences with helping him gain greater insight into how to invest in such early-stage deals.
At the same time, his financial background brought a lot of advantages to fintech founders beyond his wallet. In a sector that often faces complex regulatory environments, Valet could help founders navigate the thicket of rules. And for entrepreneurs hoping to partner with larger enterprises and customers, Valet's ability to open doors to traditional players proved invaluable.
A few years ago, Valey met Kamel who was then still at Serena, and they gradually began to co-invest in more deals together. Beyond his role at Serena, Kamel has also made 40 investments as a Business Angel.
Angel Criteria: When evaluating potential investments as a Business Angel, Valey said he studied fundamentals such as the quality of the founding team, the go-to-market strategy, and the pain points the founders were trying to address. When looking at Qonto, for example, the founders had clearly identified simplicity as a pain point for many independents and small businesses who needed financial services.
"They cracked that market and it's why they've been so successful," Valet said.
The Varsity Squad: Having reconstructed a new entrepreneurial network, Valet wanted to take things a step further. Kamel had decided to leave Serena and at the time, Thomas had left Serena to work at restaurant tech startup Sunday.
While Business Angel investing was satisfying, the size of the checks also meant that Valet's impact with any one startup was naturally limited. "How can we bring more value?" Valet said.
The trio felt their skill sets were highly complementary with Valet's financial experiences, Kamel's enterprise software background, and Thomas' operations focus.
"In terms of due diligence and challenging each other and the startups, it makes us even more credible to founders who are looking for investors that can bring added value and support them," he said.
Themes: Varsity will back European startups across four verticals: fintech, healthtech, climate tech, and enterprise SaaS software.
