Lakestar, recognized as one of Europe’s premier venture capital funds, has recently achieved a milestone by closing its continuation vehicle, Lakestar Continuation Fund I (LCF I), with a value of €228 million. This fund has garnered a remarkable level of interest, resulting in oversubscription, making it one of the most significant transactions of its kind in the European venture capital landscape to date.
The backing for LCF I comes from a diverse group of institutional investors, with Lexington Partners taking on the role of lead investor. This consortium also includes reputable firms such as Industry Ventures, Performance Equity Management, and several other influential secondary investors. Their participation signals a decisive vote of confidence not only in the underlying portfolio managed by Lakestar but also in the broader strategies and capabilities of the firm itself.
The transaction was executed through a secondary liquidity process designed to optimize outcomes for all parties involved. Existing limited partners (LPs) in four of Lakestar’s earlier funds were offered liquidity, and the pricing for this was determined through a competitive process that adhered to arm’s-length principles. Importantly, for most of the portfolio companies, only a portion of Lakestar’s total holdings was sold to LCF I. This strategic choice enables Lakestar to retain some upside potential, ensuring that the interests of the selling funds are well-protected. At the same time, it provides a meaningful liquidity event for the limited partners who had invested in those earlier funds.
The successful completion of this transaction holds great significance for Lakestar, as it not only enables the firm to continue its support for existing portfolio companies but also empowers those companies to pursue new growth opportunities. Lakestar’s commitment to funding and nurturing these ventures positions them favorably for future success, further underscoring the dynamic nature of the European venture capital sector. This development reflects a vibrant investment climate and underscores Lakestar’s pivotal role in driving innovation and growth within the industry.
Advisors: Lakestar was exclusively advised by PJT Partners, one of the world’s leading financial advisory firms. Clifford Chance acted as legal advisors for the transaction.
KEY QUOTE:
“The ability to close one of Europe’s largest venture continuation vehicles of this kind to date shows the strength of our portfolio and the enduring belief in European innovation. We are pleased to deliver liquidity to our existing LPs while the backing of a selection of top-tier investors highlights confidence not only in the underlying portfolio but also in Lakestar’s broader investment strategy. We are also proud of Lakestar’s role as a long-term partner to Europe’s next generation of category-defining companies.”
Klaus Hommels, Founder and Chairman, at Lakestar
