Diversity-focused British VC firm closes inaugural fund with high-profile backers

By Anna Irrera

(Reuters) - A new London-based venture capital aimed at funding tech companies whose founders come from traditionally under-represented groups said on Tuesday it closed its inaugural fund with backing from investors including TransferWise co-founder Taavet Hinrikus and later stage investment firm Atomico.

Ada Ventures, whose name is inspired by computer science pioneer Ada Lovelace, plans to invest the $34 million (£26.50 million) fund in UK technology companies aimed at underserved customer segments or whose founders are traditionally overlooked by VCs because of gender, race or background, it said.

Other fund backers include the British Business Bank, which will make the cornerstone investment, U.S.-based BlueSky Capital, Dubai-based Rasmala and Silicon Valley law firm Wilson Sonsini, the company said.

This year $92 of every $100 invested in tech companies in Europe went to founding teams that were all men, according to a study by Atomico. Around 84% of founders who raised external funding were white and 82% were university educated, the research also found.

Ada Ventures hopes to help change this by providing early stage equity to more diverse teams, founding partner Francesca Warner said in an interview.

"We felt like there needed to be a fund properly breaking down barriers for people who felt they couldn't identify with the current venture capital options," Warner said.

The firm will also invest in technology companies developing products and services aimed at overlooked segments, including ageing populations, women and people under 20, it said.

It will make initial investments of around 500,000 pounds ($641,500) and reserve around half of the fund for follow-on investments, it said.

It has already backed seven companies including Polipop, a company developing a flushable sanitary pads, and Juno Bio, a biotech company focused on decoding the vaginal microbiome to increase the success of IVF.

(Reporting by Anna Irrera in New York; Editing by Cynthia Osterman)