Ariadne Capital finally puts skin in the game with a £20m fund

It looks at first glance like Michael Birch and Brent Hoberman’s PROfounders Capital has a new and unexpected bit of competition in the shape of “online Dragon” Julie Meyer from Ariadne Capital. The latter has just announced a brand-new £20m fund, the Ariadne Capital Entrepreneurs Fund, that aims to invest in early-stage companies.

Meyer rightly points out that lower costs mean investing £250,000 to £1m in a start-up today is roughly equivalent to the £5m – £10m that might have been needed ten years ago. That’s the space her new fund is aimed at, which places her head-to-head with PROfounders Capital. Doesn’t it?

“No, absolutely not,” Meyer told TechCrunch Europe this afternoon. “Ariadne is just continuing what we’ve been doing for eight years, only we’ll be cutting the cheques ourselves now, rather than going to investors we have good relationships with. We’re really just formalising what we’ve already been doing.”

The “ACE Fund” will concentrate on business applications, media technology, voice applications, consumer and SME financial services and digital entertainment, and will be on the look-out for potential “game-changers” to invest in at the seed stage.

Investors in ACE include David Rowe, founder of EasyNet; Marc Worth, founder of WGSN; Rob Hersov, founder of Marquis Jet Europe (sold to NetJets); Michael Jackson, former Chairman of Sage; and betting supremo Simon Capreis.

Meyer will act as Managing Partner. She declined to reveal how much she has personally invested in the fund, but confirmed that she has put her own money in, alongside money from the ten other investors. Given the lack of institutional money this looks more like a “super-Angel” fund than anything else, but at least I guess we can no longer say Ariadne isn’t a real VC.

So where is the cash going? Meyer says Ariadne’s existing portfolio – which includes troubled speech-to-text company SpinVox – may benefit from the fund. But she denies that SpinVox will see any of it: “We’re investing in early-stage companies. SpinVox has proven their business model and are scaling globally, as I’m sure you know. They’re three steps along from the companies we’re looking at.”

To date, Ariadne Capital hasn’t been your typical outfit: it has 53 experienced entrepreneurs (as opposed to investors) on its books, who came together in 2000 to demonstrate the “entrepreneurs backing entrepreneurs” model. According to Meyer, five companies have been funded since Christmas and over 30 have been funded since 2000 via their network. Prior to this announcement, Ariadne was more of an investment relations advisor, really.

But that doesn’t mean they sat on the fence: Meyer raised eyebrows earlier this year with her staunch defence of under-fire SpinVox, and in particular its founder Christina Domecq. (To be fair, Ariadne is an investor in SpinVox – though Meyer declined to tell us this afternoon what stake they currently hold, apart from saying it was “small” – so it’s hardly surprising she stuck up for the company.)