Edoardo Ermotti, founder of 14Peaks Capital
“I was always much more interested in funds where I was one of 15 partners, rather than one of 100,” says Edoardo Ermotti, the founder of Swiss venture capital firm 14 Peaks Capital, of his investment approach as a former business angel and family office executive. “That gave you the ability to have more of a say in how the fund was run and to support the portfolio companies.”
It’s an approach Ermotti is now offering to investors in 14Peaks’ inaugural fund, which will today announce it has closed with $30 million raised from a combination of family offices and high-net-worth individuals. In his role as general partner of the fund, Ermotti has deliberately sought to recruit a relatively tight circle of limited partners – a select group with relevant experience and contacts for portfolio companies as well as capital to offer.
“Each of the investors supporting 14Peaks is globally successful in their own right, giving our portfolio founders access, through us, to this curated hub of extensive experience and networks,” he explains.
Although the fund has only formally closed this month, Ermotti has been raising money since 2022, when 14Peaks was launched, and has already added 11 companies to the portfolio. The fund’s focus is on business-to-business software providers in two verticals – financial technology (fintech) and the future of work.
“We’re interested in fintech because financial services is such a large industry with so much potential for disruption from technology,” Ermotti says. “Future of work could be anything that changes the way people in a business interact with one another, or with how two businesses interact; that could be data collaboration or analytics, but it might also be human resources platforms.”
Early investments include a stake in Rain, the US fintech which works with employers to offer staff advances on salary for hours they have already worked, and Threatfabric, a Dutch cybersecurity specialist. Both companies credit Ermotti’s team with offering more than just financial support.
“Ever since we met them, the team has rolled up their sleeves and been very hands-on and proactive in transforming us into an organisation that can truly scale in an emerging market,” says Han Sahin, the co-founder of Threatfabric. At Rain, founder Alex Bradford adds: “14Peaks has plugged us into highly valuable investor networks and boosted our go-to-market plans by sitting down and helping us craft business development strategies.”
It's an approach that Ermotti believes can be best served by leveraging the strengths of 14Peaks’ limited pool of investors with relevant expertise. “It’s all about giving our founders access to this pool,” he says. “It’s an advantage that we think attracts founders to us.”
Indeed, Ermotti argues that many start-ups are now just as focused on this type of support from investors as they are on the size of the investment involved. Despite its relatively small scale, 14Peaks has led or co-led on three of the 11 investments it has made to date.
With 30% of the fund reserved for potential follow-on investments, Ermotti expects to invest an average of around $750,000 in 25 portfolio companies. Deal opportunities will be sourced from 14Peaks’ existing network of contacts, from founder referrals and, increasingly, from outbound activity.
Future plans include expansion in the US. The fund has a mandate to invest on both sides of the Atlantic and the portfolio already includes several American businesses, but Ermotti believes 14Peaks now needs a team on the ground in the US to support these companies. “That will also help us support our European portfolio companies, many of which are looking to expand into the US,” he adds.
