LocalGlobe, the VC firm founded by father and son, Robin and Saul Klein, was already a well-known name in funding. It’s now going to be part of its own family, becoming the Phoenix Court Group, with the LocalGlobe brand now one of a $500 million family of funds that could take startups from pre-seed all the way to public listing.
With LocalGlobe joined by Latitude, Solar, and Basecamp, the fund will focus on an area they are calling ‘New Palo Alto’, a region within a few hours train ride of London. New Palo Alto, when considered as a single area, is only behind the Bay Area and Beijing for producing high-growth private companies, but is relatively underserved by investment, putting startups at a disadvantage.
A new phase for a well-established name
LocalGlobe has a long track record in investment. Saul Klein points to a career that is older than many of the founders he supports, saying he has been “in this business for nearly 30 years.” And during that time LocalGlobe had helped create many household names, like Monzo, Wise, and unicorns like TravelPerk and AccurRx.
The fund has long had a European focus, and a region they are naming New Palo Alto, an area within a four-hour train ride from their north London headquarters. This includes many UK cities traditionally associated with tech, like London, Oxford, Cambridge, but also brings in others that have yet to have the same exposure, like Manchester and Newcastle in the north, or Bristol to the west. Meanwhile, the Eurostar means that a large part of continental Europe is included, like Paris, Brussels, and even Amsterdam.
Aside from the practical benefits of enabling physical meetings without the hassle of airports, the region already has a proven track record. With an annual spend of $110 billion on IT in the region, it’s home to seven of the global top 30 universities. But despite being an incredible producer of tech unicorns, it is underserved when it comes to funding rounds over $100 million.
Moving startups through their lifecycle
Klein believes in the long-term value that LocalGlobe has created, his faith in their strategy means he pays little attention to share prices, but a lot to potential. “Our job continues to be helping founders and CEOs raise the capital they need to get to the next phase of their business.” LocalGlobe has helped by being recognised as an incubator, Klein suggests, “investors that sit above us in the value chain and say, “if I want to invest, I need to be looking at the LocalGlobe seed portfolio.’”
The brands in the Phoenix Court Group portfolio aim to do what LocalGlobe has been doing for pre-seed and seed stage startups. Latitude will support founders as they move from breakout to scale up stage, a point in a startup’s life where New Palo Alto suffers from significant underinvestment. A new fund, Solar, will continue providing support at growth stage.
Finally, Basecamp creates a community of over 50 early-stage funds and angels. The aim of Basecamp is to allow participants access to best practice, helping them make connections and offering access to the Newton Venture Program, which LocalGlobe co-founded with London Business School. Basecamp has the aim of at least 50% of venture investors coming from underrepresented backgrounds by 2030.
A force for good
A big part of the transition to Phoenix Court Group is the social value investment can bring. Alongside the new funds, Klein has also announced Phoenix Court Works, a foundation to support the area around the group’s Somers Town headquarters. Funded with profits from the Phoenix Court Group, it is intended to be a good neighbour, for both the area immediately surrounding its headquarters and the wider New Palo Alto. The foundation will focus on health and wellbeing, education and inclusion, and climate and the environment, and has already supported 23 organisations, including work to support young black female founders.
Klein sees the foundation as integral to the Phoenix Court Group, which is not just another investment fund, he says, but something different. “The foundation, literally and metaphorically, is at the heart of the way we think about this ecosystem,” Klein said.
Serving a region that has been responsible for considerable innovation and a string of unicorns, but which has been curiously underinvested when compared to North America and China might, for some, be motivation enough. And, perhaps, prompt ambitions of moving up from being the third-biggest generator of high-value startups. But Klein thinks it will be something more than that.
“The reason we think New Palo Alto is interesting is not just because it has the ability to be the next Palo Alto, it’s because we think it can be a different Palo Alto,” Klein explains. “The key difference, we think, is that this ecosystem is going to be one that is based around values.”