Wise and Skype founders raise $436 million to create tech giant in Europe

The founders of Wise, Skype and Songkick have raised 400 million euros ($436.4 million) for a new fund to support technology startups in Europe. It seeks to compete with established funds such as Atomico, Balderton Capital and Crendum with its founder-led focus.

Plural Fund II, the company’s second ever, comes just 18 months after the company raised its last fund, a 250 million-euro vehicle. Its co-founders include Tavet Hinrikus, co-founder of fintech firm Wise, Ian Hogarth, co-founder of concert discovery service Songkick, Stan Tamkivi, co-founder of communications platform Skype, and Khaled Helioi, former CEO of Bigpoint Games.

Hinrichs told CNBC that Plural could serve as a better partner for startups in Europe than most venture capital funds, noting that it was started by people with the “stain tissue” of proven entrepreneurs. He says only 8% of VCs in Europe are former founders, much lower than the 60% in the United States.

“If we look at a lot of VC funds, you have a lot of people who have done a good job with spreadsheets, not with startup life,” Henriques told CNBC in an interview. “In our case, it is seen as the main criterion for choosing our partners that they are completely unemployed.”

“It’s like it’s World War III, and we’re in the trenches together as one of the founders. So, if we look at the track record and our ability to get deals done, I think everything is He says it’s really missing in Europe,” Henriques said.

Plural raised funding from a mix of limited partners including British and American university endowments, American foundations and insurers, and strategic family offices in Europe and the United States. The firm said it saw “significant appetite” from LPs – limited partners, institutional backers of venture funds – for its new fund and met its own fundraising target, despite being in the “most difficult environment” to raise funds. Crossed.

“The fact that, in a difficult fundraising environment, we have been able to raise a fund of this scale, with a huge amount of appetite from LPs, just shows you that some of the most sophisticated investors in the world are really recognizing this opportunities in Europe, and would really like to see a fund of Plural’s size,” Carina Namieh, partner at Plural, told CNBC in an interview.

“I think it’s a real testament to such a broad backdrop that we’ve raised a fund of this size and scale so quickly,” he said.

Plural plans to invest at a pace of two to three investments per investor per year with its new fund. The company has a total of five partners, whom it calls “unemployed”, due to the fact that they would not easily join a VC firm, or qualify for employment at a startup. Each partner is an active angel investor.

Plural has made a total of 27 investments in subsidiaries including law-focused artificial intelligence firm Robin AI, nuclear fusion power plant developer Proxima Fusion and most recently drug discovery platform Sano Genetics. Its largest sectors by investment are AI (31%), frontier technology (16%), and climate and energy (14%).

Hinrichs said Plural is not interested in finding the next major software-as-a-service name in Europe, referring to companies that provide data storage, access infrastructure and ease the burden of data analytics for businesses. Makes software for. It is more interested in deep tech, focusing on founders solving fundamental scientific problems around energy, unlocking AI “superpowers,” and making unprecedented progress in health care.

Plural says it wants to build technology giants in Europe, identifying winners in emerging categories that other funds may ignore, such as deep tech and clean tech.

Carina Namieh, a biotechnology entrepreneur turned partner at Plural, said she would not be surprised to see major technology names emerging in Europe in the near future on par with the US and Chinese giants.

He said technological progress is now happening very rapidly, boosted by major developments around AI and more established pools of capital.

“Look at how fast OpenAI has come with ChatGPT,” he said. He said new technologies are taking less time to reach major milestones. “Obviously, big tech companies have a lot of advantages and they are stronger in many ways. But I think now more than ever is a time where new players and emerging players can come in and create completely new spaces. But can dominate, which did not exist years ago.”

Namieh previously worked on applying AI to mRNA-based medicine at his former startup HelixNano.

Plural’s new fund launch adds to the wave of startup activity that has been happening in Europe over the past decade.

A report from venture capital firm Accel late last year showed that unicorn companies valued at more than $1 billion often serve as catalysts for startup creation, with 1,451 new startups founded by former employees of European and Israeli unicorns. Have been established.

According to the report, most of that new batch of startups comes from fintech, with 70 fintech unicorns producing 423 startups.

“Over the last 10 years, the whole ecosystem has really become an ecosystem, whereas before, we were just hunting wild game,” Accel partner Harry Nellis told CNBC. “There was one here, one there, there was no ecosystem.”

“Starting a company is a lot easier than it used to be. The engineering is done first, the marketing is done first,” he said. “That’s a flywheel that we never had before in Europe, which we have now.”