French venture capital firm Daphni has announced the first closing of its new fund, Daphni Blue, with a total raise of €200 million (approximately $215 million at current exchange rates). The firm expects to reach its target of €250 million ($270 million) by the end of the year.

This new fund marks a significant milestone for Daphni, which has invested in 70 European startups since 2015. Some of its most notable past investments include Back Market, Swile, Hubcycle, and Pasqal. With Daphni Blue, the firm plans to invest in an additional 40 startups, further solidifying its position as a key player in the European startup ecosystem.

The limited partners in Daphni Blue include Crédit Mutuel Arkéa, Bpifrance, the European Investment Fund, PRO BTP, and Swen Capital Partners. According to founding partner Pierre-Eric Leibovici, the firm's investment strategy is centered around supporting technologies or services that are sustainable and have the potential to drive meaningful innovation.

What sets Daphni apart from other VC firms is its emphasis on science as the primary driver of innovation. While many firms focus on artificial intelligence, Daphni is taking a more holistic approach, recognizing the significance of life sciences, biology, physics, chemistry, and mathematics in shaping the next wave of innovation. Leibovici noted that even quantum computing, often touted as an AI breakthrough, is fundamentally rooted in physics combined with hardware and software.

To support its science-driven investment strategy, Daphni is recruiting professionals with diverse backgrounds, including PhD graduates and students. This approach is reflective of a growing trend among researchers, who are increasingly open to commercializing their fundamental and applied research. Leibovici observed that this shift is driven, in part, by the desire to start companies and create impact, rather than solely pursuing academic pursuits.

Notably, Daphni's focus on fundamental science predates the recent trend of French universities setting aside budgets to attract American researchers. Leibovici emphasized that the firm's strategy is not a response to this trend, but rather a coincidence. However, Daphni remains open to investing in American researchers who are starting startups in Europe.

With the newly raised capital, Daphni will now focus on deploying its funds and demonstrating the effectiveness of its investment strategy. As Leibovici aptly put it, "Raising is not an end in itself. What is an end in itself is distributing returns, and therefore exits." The firm's ability to generate returns and facilitate successful exits will be crucial in validating its approach and cementing its position as a leader in the European VC landscape.

As the European startup ecosystem continues to evolve, Daphni's science-driven investment strategy and commitment to supporting sustainable technologies will be closely watched. With its latest fund, the firm is poised to play a significant role in shaping the next generation of innovation in Europe.