June 11, 2020

Welcome to the decade of purpose, says new Index Ventures partner

“The past decade was the decade of convenience. The coming decade will be the decade of purpose."

John Thornhill

4 min read

Europe’s cash-hungry founders had better develop a sense of purpose fast. One of Europe’s biggest venture funds is increasingly focusing on a company’s business purpose when deciding where to invest.

Stephane Kurgan, the former chief operating officer at casual gaming startup King (which sold for $5.9bn) who has just joined Index Ventures as a venture partner, says that the world is being transformed by the social movements of our time, such as Black Lives Matter and MeToo, as well as by environmental and privacy campaigns. 

Those startups that are not attuned to these movements will find it difficult to raise money and attract and retain a more idealistic generation of employees, he says.


“The past decade was the decade of convenience. The coming decade will be the decade of purpose. The companies that will be formed will have purpose at their core and some of them might make it their business,” he says in an interview with Sifted.

That message is echoed by Danny Rimer, one of Index’s senior partners, who says that the Covid-19 crisis is opening up all kinds of investment opportunities in healthcare, education, the environment and remote working. 

“This crisis is not like anything I have witnessed before. It is not like anything my 86-year-old dad has witnessed before. It is one for the history books,” he says. 

He points to the Amsterdam-based Otrium, which has developed the concept of conscious fashion by selling excess branded stock, as the kind of business that can thrive in this new environment. “Consumers and employees are not going to buy from, or work for, companies that do not have the right intent,” he says.

Index’s increased emphasis on purpose-driven organisations certainly chimes with the times.

Miika Huttunen, the chief executive of Slush who has been talking with dozens of founders about the future of the European tech sector, says that the entrepreneurs are increasingly driven by the ambition to tackle humanity’s biggest challenges. 

“We've already seen funding for purpose-driven companies explode over the past few years in Europe; a development that opens a real possibility for founders to build impactful, world-changing companies," he says. “This makes business sense — increasingly, data shows that virtuous business is good business.”

Index, which was recently ranked by Dealroom as Europe’s top Series A investor following successful initial public offerings with Adyen, Datadog and Farfetch, has a lot of financial firepower. In April, it closed its latest $2bn funding round. But some other funds that have prioritised investing for purpose have found it difficult to translate good intentions into positive returns. Moreover, corporate definitions of purpose can sometimes be fuzzy, if not outright misleading.

One of the reasons Index has taken on Kurgan is to help its portfolio companies scale quickly. He is immediately joining the board of Codat, the London-based data infrastructure company that enables small businesses to “plug into” banks and other financial institutions. Codat announced today [Thursday] that it has raised an additional $10m to fund its expansion into the US.

During his time at King, from 2011 to 2019, Kurgan helped manage a period of explosive growth, mostly thanks to the success of its blockbuster game Candy Crush Saga. “Between 2012 and 2013 we grew from $165m in bookings to $1.85bn, or 11x in one year. We had 540m users. The whole world was playing. It became a social phenomenon,” he says.

As chief operating officer, his role was to help keep the “mathematicians” and the “magicians” aligned, making sure the data geeks and the creative designers headed in the same direction. He did so by making sure that the incentive structures were aligned so that all employees were rewarded for growing the value of the overall network. King was acquired by Activision Blizzard for $5.9bn in 2015.


He is wary of offering generic advice to startups because “there is a different truth for every company”. But the one approach he does insist on is that companies must always strive to hire the best people, even if it takes time. “The single most important rule is recruitment. You cannot compromise,” he says.

Kurgan argues that the example of King, Spotify, Adyen and Farfetch shows that European digital champions can make a global mark. “The talent is as good if not better than in the US. You have got good engineers and serial entrepreneurs and top talent coming back from the valley,” he says.

Unsurprisingly, Rimer is equally upbeat about the prospects for those European startups that can ride out the current crisis and readjust their business models. “You have to be very transparent and brutally honest about what we are facing,” he says. “Make it happen today rather than postpone the inevitable.”

John Thornhill

John Thornhill is Sifted’s editorial director and cofounder. He is also innovation editor of the Financial Times, and tweets from @johnthornhillft