Fintech VC firm Fabric Ventures is expected to launch its third fund in Luxembourg, Fabric X, offering early stage finance of €100,000, with a follow up injection of €350,000.
The fund completes the life cycle of startup support offered by the VC firm through existing funds Fabric Ventures (€1-€2m in seed and A series finance), Fabric Growth (€5-€10m) and Cayman Islands domiciled Fabric Capital, providing liquidity.
“Luxembourg as a base for two, about to be three of our funds, gives us that regulatory framework and recognition that we’re doing everything absolutely to the letter of the law,” Fabric Ventures chairman and managing partner Richard Muirhead told Silicon Luxembourg.
He added: “It’s a powerful communication to our investors around the world, and to our founders, that we are absolutely responsible citizens in that regard.”
Fabric has existed in its current form since November 2017. Originally based in London, in 2021 it moved to Luxembourg to establish a new fund backed by the European Investment Fund. As part of the agreement with its main investor, Fabric has a duty to invest 67% within Europe.
“Across all Europe, there is a maximum 20% of the venture capital that we need.”
Richard Muirhead, Fabric Ventures chairman and managing partner
Located at the House of FinTech (LHoFT) since May, Fabric aims to support projects focused on Web3, “putting the individual and ownership of their identity and data and their privacy at the centre of all of the digital networks that we now rely upon for our everyday lives,” says Muirhead.
“This is the first sort of technology wave that has been accompanied by fundamental, not just innovations but thinking of financial instruments and financial technology and financial services and consequently financial regulation. Because it’s a fresh approach to doing things. It is an approach that ultimately serves the needs of the individual but balances IT with the needs of the collective.”
Muirhead believes that investing in these sorts of startups will lead to improved regulation of financial services. “Because the space is intrinsically set up to be data-driven, to be automated, to be transparent, and indeed, actually to be incorruptible. All of which are characteristics that make it superior to today’s banking and capital markets systems,” he says.
“It’s going to require an adjustment but it means that effectively you will be able to be regulated and compliant on every front, in real time, rather than after the fact.”
Fabric is looking to hear from to “talented, complementary founders with skills in stack, Web3 and smart contract platforms.” More information about its funds is expected to follow online imminently. Interested founders are encouraged to ask for an introduction through someone who is already part of the Fabric ecosystem.
VC funding is sorely lacking in Europe, particularly for scaleup financing, according to the European Commission’s Joint Research Centre, an opinion that is shared by Muirhead. “Across all Europe, there is a maximum 20% of the venture capital that we need. We do it because venture capital drives risk taking adventures that actually move society forward. And that is the best possible use of capital.”
