EIF, Minecraft, King Founders Invest in Swedish VC Fund BackingMinds

Swedish venture capital firm BackingMinds Invest AB raised more than €50 million ($56.1 million) in a first close of its third fund, adding two high-profile gaming entrepreneurs as new investors.

The new fund will target 15 to 20 companies in areas including artificial intelligence, climate and “resilience,” founders Sara Wimmercranz and Susanne Najafi said in an interview.

New backers of the fund include Mojang AB co-founder Carl Manneh, who helped build Minecraft, and Sebastian Knutsson, co-founder of Candy Crush maker King. The European Investment Fund committed €20 million while Hennes & Mauritz AB heir Karl-Johan Persson and EQT AB founder Conni Jonsson are among the biggest private investors.

Wimmercranz and Najafi said BackingMinds focuses on founders outside traditional VC networks, an approach shaped partly by their own experiences raising money as entrepreneurs. About 43% of the founders it has backed are women, 43% have immigrant backgrounds and more than 70% were founded outside major startup hubs including Stockholm and Copenhagen.

European venture firms continue to struggle with a lack of exits, leaving investors with less money to recycle into new funds. While deal flow and investment activity are beginning to pick up, fundraising remains difficult, according to an October survey by the European Investment Fund.

“Those investors have been waiting to get distributions so that they can invest in new funds,” Najafi said. With few initial public offerings, “capital has been locked up.”