Venture Capital/News/

Accel raises $650m early-stage European fund

Europe’s leading VC tells Sifted where it's looking to invest — and why it isn’t remotely scared of Tiger.

By Amy Lewin

Accel's European partners

Accel isn’t just a VC firm with more than 30 unicorns and five IPOs under its belt in Europe in the last two years alone, a portfolio of absolute stonkers and a reputation for picking winners.

It’s also a VC with extremely deep pockets, after announcing three new funds totalling $3.05bn. That includes a $650m early-stage fund covering Europe and Israel (its seventh), a $1.75bn global growth fund and a $650m early-stage fund covering the US. 

With that capital, its European team will be doing more of the “same, good old”, Luca Bocchio, partner at Accel, tells Sifted. That means investing in “exceptional entrepreneurs” at Series A (and occasionally at seed) across a broad range of sectors, writing cheques that could range from “as little as $1m to as much as $20m”. 

It’s looking for its next batch of companies like virtual events platform (and phenomenon) Hopin, gaming giant Supercell and robotic processing automation company UiPath (“one of the most important investments over time for Accel”). Since the start of this year alone, Accel has seen more than 10 new unicorns created in its portfolio.

And Accel isn’t, Bocchio says, fazed by Tiger Global and other ‘crossover’ investors muscling in on big European VCs’ territory. 

Tiger schmiger

“Ultimately, if you want to talk about Tiger and similar crossover funds, first we need to make the important distinction: they’re still playing later than we are,” says Bocchio. In general, Tiger and other fast-paced growth investors like Coatue invest at Series B and beyond — but there are exceptions.

“It’s about the product they’re offering versus the product we’re offering. An entrepreneur who has raised a Series A is usually looking for a partner who wants to work with them, on hiring talent, on product development. When you see the crossover investment product [like Tiger’s], it’s all about being passive. It doesn’t mean supporting the entrepreneur.”  

Accel’s looking for founders who don’t want a hands-off investor — and offers them help with finding senior talent, introductions to customers and expansion advice. 

Speedy investments

Accel isn’t impervious to the markets though. Whether it’s thanks to Tiger, global lockdowns or interest rates, investments are seriously speeding up — and that means Accel got through its last funds, including a $575m European fund announced in May 2019, far faster than ever before. 

“Once we reach a certain level of capital committed, we begin [fundraising for] the next one,” says Bocchio. “And the last couple of years, the pacing has been quite high.” 

Raising the fund was “quite straightforward — and being fully remote made it more efficient than before”. Bocchio won’t disclose the names of his LPs, but says the “vast majority remain” with Accel from fund to fund. 

The watch list

Last year, Accel launched a scout programme in Europe to get eyes on exciting companies at their earliest stages. Its scouts include some of the continent’s best known founders and operators — like portfolio company Personio’s cofounder Hanno Renner; former VP of marketing at Monzo Tristan Thomas; and former CPO of N26 and current CPO of Tier, Georgie Smallwood. Each is given $200k to invest in European startups of their choice.

Investments made by the scouts so far include: Young Platform, a cryptocurrency platform which raised a €3.5m Series A this week; Airbank, a Berlin-based fintech which closed a €2.5m seed round last week; and Remi, a remote team-culture building platform which raised a €1.2m seed round this month.

Bocchio, meanwhile, is looking for founders who “always want to learn”. Johnny Boufarhat, Hopin’s CEO, is a great example of this, he says: “He gets the best out of every single meeting and chat.” 

“The more you can get feedback and take it with you, and improve, the better.”

Bocchio is “excited” by a few trends: open finance (“we’re in the early innings of what can be done there”); automation for small business owners; automation more broadly (“the next layer could come from no code and low code players”); and insurtech (“it’s still early days — it’s a sleepy industry”.)

Amy Lewin is Sifted’s deputy editor. She covers VC, foodtech and diversity in tech, and tweets from @amyrlewin. She’s the coauthor of our weekly Startup Life newsletter, which you can subscribe to here.

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