Early-stage rounds account for the majority of investment in the European startup market, and on Tuesday one of the region’s largest firms announced a new fund to fuel the trend. Accel has raised $650 million to back startups from seed to Series A in the UK, the continent and Israel. The fund is the eighth of its kind for Excel since it first put down roots in London in 2000.
Accel has invested in over 200 startups in the region to date, making it the most prolific VC in the market.
One of the recurring regrets you find in Europe is that even if the region produces exceptional talent and ideas, companies on the continent are challenged when it comes to scaling. There have been a number of exceptions over the years, however, testing that claim, and part of Accel’s gravitas as an investor comes from the fact that it has been a backer of many of them. These include some of the most successful startups to come out of Europe, such as Skype, Supercell and Spotify (a trio of Nordic startups, incidentally, hatched in Estonia, Finland and Sweden respectively).
In the years since those investments, Accel has been betting that the growth of startups in Europe has been strong enough to expand the pot of money it’s backing them. Notably, the $650 million announced Tuesday is the same size as the firm’s early-stage fund in the U.S. (announced December 2023). Given that the US is a fairly large market in terms of overall venture funding and number of startups, that speaks to Excel’s confidence in what’s happening here.
“The European tech scene has really aged,” said Harry Nellis, a longtime colleague at Excel in London. Current investments include cybersecurity firms Sierra and Oasis, care-home marketplace Lottie, and buzzy AI video startup Synthesia, among many others.
As you might expect from this list and recent headlines, the focus going forward will be on timely businesses that meet the needs and interests of the moment. These include those that are developing creative solutions to pressing problems (cybersecurity is a prime example), smart commerce solutions (including marketplaces that address social and societal needs), and — what Should I write it down? – AI, AI, AI.
Venture capital in the first quarter of this year showed modest but still encouraging signs of recovery, according to PitchBook research. In the first three months of this year, a total of around 16.3 billion euros were invested in startups across Europe. That’s up to the first quarter of 2023, when €13.7 billion found its way into startups’ bank accounts, but several billion less than the heady, Internet-related days of both 2021 and 2022.
This decline may not be such a bad thing in the long run: right now the market is trying not to get knocked out by the wave of startups that were generously funded in previous years that are now collapsing because they Find yourself. struggling to reach their revenue estimates, setting their prices, and failing to exit the public markets or raise further funding.
Credit : techcrunch.com
