In a significant boost for innovation in Europe, French venture capital firm Daphni has announced the successful first closing of its third fund, dubbed Daphni Blue, managing to raise an impressive €200 million (approximately $215 million). The firm is optimistic about extending this figure to €250 million ($270 million) by year’s end, further solidifying its position in the competitive VC landscape.

Daphni has a rich history of backing successful startups since its inception in 2015, with notable investments including the likes of Back Market, Swile, Hubcycle, and Pasqal. To date, Daphni has invested in around 70 European startups. With the new fund, the firm has set its sights on funding an additional 40 innovative startups, demonstrating a commitment to fostering the next generation of groundbreaking companies.

Limited partners contributing to Daphni Blue include reputable names such as Crédit Mutuel Arkéa, Bpifrance, the European Investment Fund, PRO BTP, and Swen Capital Partners. As founding partner Pierre-Eric Leibovici emphasized, the firm is intent on distinguishing itself by supporting technologies and services that promote sustainability alongside creating differentiation in their investments.

In an environment where many VC firms frequently cite artificial intelligence as their primary focus, Daphni is taking a different approach. The firm aims to prioritize fundamental scientific research across a variety of domains including life sciences, physics, biology, and mathematics as the driving force behind the next wave of innovation. 'When you talk about quantum computing, it’s a blend of physics with both hardware and software,' Leibovici explained, highlighting the need for a strong scientific foundation in tech advancements.

In line with their vision, Daphni is actively recruiting talent with diverse academic backgrounds, including PhD graduates and students, to bolster its investment team. This recruitment strategy aligns with a broader trend where emerging researchers are increasingly inclined to commercialize their research, inspired by peers successfully launching startups.

Despite recent trends prompting French universities to allocate budgets to attract American researchers, Daphni’s pivot towards fundamental science was a decision made prior to this shift. 'It’s coincidental that we’re seeing this momentum now,' Leibovici clarified, reiterating the firm’s openness to invest in American entrepreneurs seeking opportunities in Europe.

Looking forward, Daphni faces the crucial task of channeling this newly raised capital effectively while showcasing its investment strategy's viability. As Leibovici pointed out, 'Raising capital isn't the final goal; the true measure of success lies in delivering returns, which ultimately comes down to successful exits.'

As Europe continues to emerge as a vibrant hub for startups, Daphni’s strategic focus on science-driven innovation could pave the way for a new era of technological breakthroughs. Keep an eye on this dynamic firm – their next moves could change the landscape of European venture capital forever!