More and more prominent American technology investors are moving to Europe to invest in startups.
|Leading US venture capital fund Sequoia expanded its operations to London last year. Photo: AFP|
US capital poured into Europe increased 18 times
This trend is on the rise after a number of European technology companies were valued at sky-high levels during the Covid-19 pandemic. Typically, the Hopin video conferencing platform was valued at $7.75 billion within two years of its founding, while the payment service company “buy now, pay later” is valued at up to $ 7.75 billion. 46 billion USD, equivalent to the value of some major car manufacturers in the world.
American technology investment funds are recruiting employees to work in Europe, and also take advantage of workers in the “old continent” when they come to invest in Spotify or soon ASML, a manufacturing company. Dutch semiconductor market capitalization jumped to 331 billion USD amid the prolonged global “thirst” for chips.
Veteran investor Alex Ferrara, senior partner at Bessemer Venture Partners – Venture capital funds backs online platforms like LinkedIn and Pinterest – confirmed to CNBC that he moved from New York to London this past September.
“Ten years ago, most European business founders realized that they needed to move to the US soon to be successful,” says Ferrara. “But that’s changed and today they’re building great companies everywhere in the world and staying active here on the continent.”
“I think that’s the new normal and we’re going to see more and more of these”decacorns” (super unicorn valued at $10 billion or more) appear all over Europe,” Ferrara said.
Last month, Silicon Valley-based Lightspeed Ventures, which has invested in Snap and Epic Games, recruited two veteran investors, Paul Murphy and Ross Mason, to launch the fund’s expansion. this to Europe.
Mr. Paul Murphy was one of the first investors in the London-based video conferencing platform Hopin, while Mr. Ross Mason was a co-founder of software company MuleSoft (USA), which was acquired by Salesforce in October. March 2018 for 6.5 billion USD.
In London, Lightspeed Ventures has also recruited Adrian Radu, who was a partner at investment bank Qatalyst Partners, according to LinkedIn. The trio of Adrian Radu – Paul Murphy – Ross Mason will join Mr. Rytis Vitkauskas, another partner of Lightspeed Ventures in London to expand investment search.
In a separate development, General Catalyst, an American venture capital fund that has invested in two online platforms Airbnb and Stripe, hired Chris Bischoff of London as CEO in May, according to LinkedIn.
The number of venture capital deals in Europe involving US investors has increased from 359 in 2011 to 1,434 in 2021, according to data from Pitchbook released mid-week.
In 2011, European venture capital deals involving US investors totaled around EUR 2.7 billion (US$3.1 billion) and this number has increased by 18 times. times to 50.8 billion EUR by 2021.
Europe still lacks a technology “big man”
Although Europe still lacks “giants” like Apple or Amazon, this is a market where more and more technology companies are worth tens, even hundreds of billions of dollars. Some experts say it’s only a matter of time before Europe can create tech companies the same size as the “giants” in the US and Asia.
London-based individual investor Hussein Kanji says there is a general perception that Europe has emerged from a technologically depleted region to a truly global playing field for multi-industry companies, such as: Spotify, Klarna, Revolut, and Darktrace.
“The great thing for the ecosystem is that three-quarters of successful companies in the European market have raised capital from US investment funds,” noted Mr. Hussein Kanji.
“This would make you think that the European tech sector would be dominated by American venture capital funds, the same way global investment banking did and the City of London would be. dominated by American companies,” said Hussein Kanji.
Sequoia, the world-renowned venture capital fund, announced an expansion in London last year, and its veteran partner Matt Miller has also moved from San Francisco to London. .
Sequoia used to support Apple and Google in the early days of operation. The fund currently has an office in the county of Marylebone, London with 4 partners and one director.
Sequoia has only supported investments in more than 10 companies in Europe since opening its office in London, but the total investment of this fund in the “old continent” is very high because they have invested in this region since more than a decade ago. Sequoia is the back-end partner of AI chip maker Graphcore in Bristol (UK) and financial technology company Klarna in Stockholm (Sweden).
Similarly, hedge fund New York Coatue Management confirmed this month that it is planning to set up an office in Europe. Coatue Ventures president Dan Rose said its European office will open in the near future but did not disclose the specific time and location of the office.
“We believe Europe is emerging as an important innovation hub in both the public and private sectors, as evidenced by the rise in venture capital activity across the continent,” he said.ng Dan Rose stated.
However, not all American technology investors are flocking to find direction in Europe. The Andreessen Horowitz Investment Fund, for example, does not yet have any investors in Europe. “They’ve done 5 deals in the UK and Europe in the last 12 months with decent capital, but they’re not ready yet. [mở rộng hoạt động ở châu Âu]”, the source of CNBC said.
Andreessen Horowitz’s hesitation may be because there are still plenty of opportunities in the US or it may be because things don’t always go according to plan to expand investment into Europe.
Previously, Google Ventures Fund (GV) launched a dedicated investment segment in Europe in 2015 with 5 partners in London. However, things did not go according to plan and Google Ventures Fund dropped it after the parent company in California rejected many investment ideas from partners in London.
After that, Google Ventures continued to invest in Europe, but now they use global funds instead of dedicated funds in Europe, and have narrowed the number of partners in London from 5 to 2. .