European institutional investors are rallying behind a new growth stage venture capital strategy that aims to bridge the notorious funding gap between promising early stage deep tech companies and the growth capital needed to build global champions. Spain-based Mundi Ventures has just completed the first close of its €750 million Kembara Fund I, marking one of the largest dedicated deep tech growth funds to emerge from Europe.
The fund represents a strategic shift for the Spanish investment firm, which previously focused on earlier stage investments. After securing a cornerstone €350 million commitment from the European Investment Fund through the European Tech Champions Initiative earlier this year, Mundi Ventures successfully attracted additional institutional capital despite challenging market conditions.
Addressing the European Scaleup Challenge
Kembara Fund I targets a well documented problem in European venture capital: the tendency for promising deep tech startups to struggle or fail when seeking Series B and C funding rounds. Recent industry analysis shows that while Europe generates substantial early stage investment in climate and deep tech ventures, many companies falter when attempting to scale manufacturing and expand internationally.
The fund operates under dedicated management within Mundi Ventures, with offices spanning Madrid, London, Barcelona, and Paris. Yann de Vries, who co-founded the Kembara initiative alongside Mundi Ventures founder Javier Santiso, brings direct experience of European scaleup challenges from his time as an executive at German electric aircraft developer Lilium, which ceased operations in 2024 despite raising over $1 billion.
“Europe doesn’t have an innovation problem. It doesn’t have a startup problem. The problem it has is a scaleup problem,” de Vries explained. His perspective reflects broader institutional recognition that European deep tech companies often possess strong technical foundations but lack access to sufficient growth capital.
Investment Strategy and Structure
Kembara plans to deploy initial investments ranging from €15 million to €40 million across approximately 20 companies, with the flexibility to provide follow-on funding that could reach €100 million per portfolio company. This approach addresses the capital intensive nature of deep tech businesses, particularly those developing manufacturing capabilities or expanding production capacity.
The fund’s structure incorporates lessons learned from recent European deep tech failures, particularly around financing diversity. Rather than relying solely on equity funding, Kembara intends to offer non-dilutive financing options to help portfolio companies optimize their capital structures and reduce dilution risks.
“What we want to do now is to productize non-dilutive financing for these deep tech founders to help them de-risk their future financing,” de Vries noted. The approach includes bringing in limited partners who can provide both fund investment and direct co-investment opportunities for successful portfolio companies.
Geopolitical Considerations Drive Investment Focus
The fund’s investment thesis reflects growing European concerns about technological sovereignty, with specific focus areas including dual use technologies and defense applications. This positioning aligns with broader policy initiatives aimed at developing European champions in critical technology sectors.
Regulatory filings suggest Kembara could eventually reach a final close of €1.25 billion, though the team completed the current €750 million milestone over a two year fundraising period. The fund’s sector focus encompasses quantum computing, semiconductor technology, space applications, and climate solutions.
Santiso brings relevant experience from his previous role as CEO for Europe at Malaysian sovereign wealth fund Khazanah, providing international perspective on technology investment strategies. The fund name itself reflects this global outlook, with “Kembara” meaning “to wander” in Malaysian.
Market Context and Competition
Kembara emerges alongside other large European growth stage funds addressing similar market needs. Deep tech venture firm Elaia recently partnered with asset manager Lazard to form LEC (Lazard Elaia Capital), which targets initial investments between €20 million and €60 million per company. Meanwhile, operator-led fund Plural reportedly seeks to raise a new €1 billion vehicle.
The broader European venture capital landscape shows increasing recognition of the growth stage funding gap, with institutional investors and government backed funds providing more support for later stage technology companies. Industry reports indicate sovereign wealth funds and corporate investors are particularly active in supporting European technology champions.
Kembara’s team includes climate technology investor Robert Trezona and deep tech specialist Pierre Festal as general partners, alongside former Atomico partner Siraj Khaliq serving as senior strategic advisor. This combination of sector expertise and operational experience positions the fund to identify and support promising growth stage opportunities.
The fund plans to pursue global market access while maintaining European operational focus, with de Vries indicating that future funding rounds will target international investors to provide portfolio companies with broader market reach and supply chain access. This strategy acknowledges that European deep tech companies must compete globally while leveraging regional strengths in research and development.