Home Venture Capital Founder-led European tech investor Plural raises new €400mn fund

Founder-led European tech investor Plural raises new €400mn fund

27
0

Unlock the Editor’s Digest for free

Plural, a tech investment firm led by some of Europe’s best known start-up founders, has raised €400mn to back the next generation of the region’s entrepreneurs at a time when funding is facing a downturn.

The London- and Tallinn-based firm, founded by Wise’s Taavet Hinrikus and UK AI safety tsar Ian Hogarth among others, focuses on early stage companies, a sector that has suffered a less severe drop-off in funding than later-stage deals.

The fund backs so-called “deep tech” start-ups that take on more complex problems, including nuclear fusion and precision medicine, investing in 26 companies since raising its first €250mn fund 18 months ago.

“We believe that working with a smaller, more concentrated portfolio, and having former founders doing that [instead of] career investors, there was a chance that those hard problems could be solved faster and we could build consequential companies more rapidly in Europe,” said Hogarth.

He recognised, however, that focus can make it harder to find the best candidates for investment. “Right now I’m extremely interested in the idea of bio defence: how to build the infrastructure to prepare for the next pandemic,” Hogarth said. “Actually there aren’t very many founders working on that area.”

The funding comes after a report by venture firm Atomico found that investment in European start-ups almost halved last year to $45bn from 2022. Many of the firms that write those cheques have also been struggling to secure backing for their own funds as interest rates have risen and growth has slowed across much of the tech industry.

The Atomico report, published in November, said that 20 per cent of the limited partners who invest in European venture funds were less keen to back that asset class, compared with 2 per cent in 2021.

Hinrikus and Hogarth co-founded Plural in 2021 alongside Khaled Helioui, former chief executive of Bigpoint Games, and Sten Tamkivi, a long-serving former Skype executive, to make early stage investments in European start-ups. Carina Namih, co-founder of Silicon Valley-based biotech company HelixNano, joined the firm last year.

Plural has taken a Silicon Valley-style approach to venture capital, trading on its founders’ experience running start-ups to appeal to a new generation of European entrepreneurs, as an alternative to traditional VC firms led by financiers. This way of operating, its partners say, has enabled them to close their new fund in spite of the grim market conditions.

“The fact that Plural is 100 per cent operator- and founder-led fits the pattern recognition of the model that turned out to be the most compelling and competitive in Silicon Valley, as Europe matures,” said Hogarth, who founded live music site Songkick before becoming an active investor in AI. “That’s what founders will gravitate towards and what the most ambitious founders want behind them.”

Hinrikus added that backers of its latest fund include “very large university endowments who have not invested in Europe before”, though he declined to name them.

The UK government last summer appointed Hogarth to a part-time role as chair of its £100mn AI task force, which led the AI safety summit at Bletchley Park in November. As a result he has agreed not to participate in any Plural investments in so-called “frontier AI” companies making very large models, such as OpenAI or Anthropic.

Nonetheless, AI is one of the largest tech themes Plural has backed so far, including legal start-up Robin AI and Unitary AI, which applies the technology to online content moderation.

“I think that our investments in AI slowed down as the bubble picked up,” Hogarth said. “We’ve selectively made investments while it remains so frothy, where we’ve found businesses we think have genuinely deep moats.”

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here