Despite the downturn, Accel has established a new $650 million fund to support early-stage startups in Europe and Israel. The American venture capital firm claims it is still steadfastly dedicated to Europe. With its initial fund established in 2000, this is American Venture Capital’s seventh fund dedicated to the area. Several of Europe’s largest tech startups, including Lithuania’s Vented, Romania’s UniPath, France’s Blablacar and Doctolib, and the UK’s Monzo and GoCardless, have received backing from Accel.
The VC seeks to make up to 30 investments during a three-year deployment period, writing tickets for firms at seed and Series A that range from $1 million to $20 million.
According to Accel partner Harry Nelis, a portion of the capital will be reserved as a reserve to help top portfolio companies in their next rounds. Similar to Accel’s earlier ventures, this generalist fund will make investments in a variety of industries, such as AI, business software, and cybersecurity.
Nelis claims that France and the UK in particular are becoming hotspots for AI investments.
He states, “There are two major centers in Europe when it comes to AI.” “One is located near Deepmind in the United Kingdom, while the other is near FAIR [Facebook AI Research] in Paris.”
Four sources claim that Accel is leading a seed investment in the Paris-based startup Holistic AI, which was established by two former Deepmind scientists. Sifted has learned from one source that the $200 million financing includes a $120 million convertible note. According to a recent report from Bloomberg, the round has ended. Nelis chose not to respond.
Speculating on Europe
Nelis claims that despite some foreign venture capitalists scaling back their investments in the region or moving their European teams due to the recent economic slump, Accel’s strong commitment to Europe is reflected in the new fund. According to data from venture capital firm Atomico, the overall funding amount for European companies in 2023 was $45 billion, which is less than half of the cash collected in 2020.
It comes after two years, 2020–21, when startup investments in Europe accelerated due to low loan rates and a pandemic-induced tech boom. During that time, numerous foreign venture capital firms, such as Coatue Management and Tiger Global, increased their deal activity in the region.
A few of them are shifting their focus. Just two years after it began, Coatue Management closed its European headquarters in London at the beginning of 2024. “A few players enter the market when it gets really hot,” Nelis explains. “They return home after becoming tourists rather than long-term residents.” “We are really happy to be making investments in Europe at this time. It’s okay if some folks have returned home.
