The individuals who started Wise, Skype, and Songkick have successfully secured 400 million euros ($436.4 million) for a fresh investment fund aimed at supporting tech startups in Europe. This fund aims to rival established investment firms such as Atomico, Balderton Capital, and Creandum by prioritizing startups led by their founders.
Plural Fund II is the second fund raised by the firm, which comes just 18 months after the firm’s previous fund of 250 million euros. The co-founders of Plural Fund II include Taavet Hinrikus, who is known for co-founding the fintech firm Wise, Ian Hogarth, co-founder of the concert discovery service Songkick, Sten Tamkivi, co-founder of the communications platform Skype, and Khaled Helioui, former CEO of Bigpoint Games.
According to Hinrikus in an interview with CNBC, Plural has the potential to be a more beneficial collaborator for startups in Europe compared to typical venture capital funds. This is because the founders of Plural have firsthand experience as successful entrepreneurs, which gives them valuable insights and understanding. Hinrikus points out that only 8% of venture capitalists in Europe have a background as founders, a significantly lower percentage compared to the United States where it stands at 60%.
During an interview with CNBC, the founder of Wise and Skype, Hinrikus, expressed his perspective on VC funds. He highlighted the importance of selecting partners who have experience and understanding in the startup industry, rather than just excel spreadsheet skills. In fact, one of the core criteria for choosing partners at Wise and Skype is that they are deemed “totally unemployable,” emphasizing their unique qualities and expertise in the entrepreneurial world.
As the co-founder of Wise and Skype, Hinrikus believes that the current situation feels like a global conflict, with everyone involved in the startup industry being in it together. He emphasizes that when considering their past achievements and the success they have had in closing deals, it becomes apparent that this particular aspect is lacking in Europe.
The founder of Wise and Skype, Plural, successfully secured funds for their new fund from a diverse range of limited partners. These partners include university endowments from both the UK and the US, foundations and insurers in the US, as well as strategic family offices in Europe and the US. Despite the challenging fundraising landscape, Plural witnessed a strong interest from institutional backers and surpassed their own fundraising goal for the fund.
In an interview with CNBC, Carina Namih, a partner at Plural, expressed her excitement about the successful fundraising efforts of their fund despite the challenging environment. The fact that they were able to raise a fund of such magnitude, with a great deal of interest from LPs, highlights the recognition of the potential in the European market by sophisticated investors worldwide. The demand for a fund like Plural is evident.
“I believe this achievement truly reflects the resilience and success we have experienced in raising a fund of this magnitude and speed, despite the challenging macro environment,” she expressed.
The ‘unemployables’
Plural intends to make investments at a rate of two to three investments per investor annually through its latest fund. The company consists of five partners who are referred to as the “unemployables” because they are not inclined to join a venture capital firm or be suitable for employment at a startup.
The individual behind Wise and Skype, the Founder, has made a total of 27 investments. These investments have been made in various companies, such as Robin AI, which focuses on artificial intelligence in the legal field, Proxima Fusion, a developer of nuclear fusion power plants, and Sano Genetics, a drug discovery platform. Plural’s investments are primarily focused on sectors such as AI, frontier technology, and climate and energy. AI investments make up 31% of
Hinrikus mentioned that Plural, the company he represents, is not particularly interested in discovering the next big software-as-a-service company in Europe. Instead, their focus lies on deep tech and supporting founders who are aiming to solve significant scientific challenges related to energy, unleash the potential of AI, and make revolutionary advancements in the healthcare sector.
Building tech giants in Europe
Plural aims to foster the growth of technology giants in Europe by focusing on emerging categories that are often overlooked by other investment funds, such as deep tech and clean tech. They are determined to identify and support the winners in these areas.
Carina Namih, an individual who previously worked as a biotechnology entrepreneur and is now a partner at Plural, expressed her belief that it is highly possible for prominent technology companies in Europe to rise to the level of well-established U.S. and Chinese giants in the near future.
The pace of technological advancements has significantly accelerated, thanks to notable progress in AI and the availability of substantial investment resources.
The individual mentioned that OpenAI’s ChatGPT gained significant attention and recognition in a remarkably short span of time. This indicates that new technologies are achieving significant milestones at a faster pace. While established tech giants have numerous advantages and strong positions in various areas, the present moment presents a unique opportunity for new and emerging players to dominate completely new fields that were nonexistent just a year ago.
Before starting her current venture, Namih was involved in the implementation of artificial intelligence in the development of mRNA-based medicine at her previous company, HelixNano.
The recent introduction of Plural’s fund contributes to the growing trend of startup growth in Europe over the past ten years.
According to a recent report by venture capital firm Accel, the creation of new startups is often influenced by billion-dollar unicorn companies, with 1,451 new startups being established by former employees of European and Israeli unicorns.
Fintect Unicorns Dominate as the biggest producers of new startups
According to the report, a significant portion of the new startups come from the fintech industry. Out of the 423 startups, 70 of them are unicorns in the fintech sector.
According to Harry Nelis, a partner at Accel, the ecosystem of technology startups has significantly evolved over the past decade. Previously, the industry was comparable to wild game hunting, with individual startups scattered here and there. However, now it has transformed into a more interconnected and thriving ecosystem.
According to the founder of Wise and Skype, starting a company has become much simpler nowadays. The advancements in engineering and marketing have made it easier for entrepreneurs to kickstart their ventures. This particular dynamic, which was previously absent in Europe, is now present and benefits the region’s startup ecosystem.