Cherry Ventures raises $500 million fund to invest in European startups

Cherry Ventures, a Berlin-based venture capital firm, has secured a $500 million fund to invest in early and late-stage European startups. The firm announced the new capital on Wednesday, noting that the funds will be split between its flagship early-stage investments and follow-on rounds at Series B and beyond.

In a letter published Tuesday, Cherry pushed back against the prevailing pessimism surrounding Europe’s economy, arguing that the continent has the potential to produce its first trillion-dollar company.

“So here is our commitment to you: today we’re launching Cherry V to be part of the solution. We have raised: $500m in new funds to be the right kind of partner, so together we can make European tech a global force. The funds are split between our flagship Early Stage fund, and an opportunity fund to double down on the most promising portfolio companies at Series B and beyond. In short, we’re ready to fund the first trillion dollar company in Europe,” the firm stated.

While Cherry didn’t specify a timeline for that ambition, the funding offers a boost to European startups, many of which are still playing catch-up with their U.S. counterparts. AI startups in Europe raised about $8 billion last year, a fraction of the $97 billion secured by similar companies in the U.S., according to recent research.

In the U.K., the region’s largest startup market, venture funding dropped 50% in October compared to the previous quarter, with startups pulling in just $2.9 billion, according to a Dealroom and HSBC Innovation Banking report.

Cherry Ventures itself did not make last year’s HEC-Dow Jones Venture Capital Performance Ranking, where Earlybird Digital East Fund took the top spot. Meanwhile, Balderton Capital, known for backing Revolut, recently closed a $1.3 billion fund for European startups, acknowledging that the continent is trailing in the AI race.

Despite the challenges, Europe has a strong startup pipeline. As of early 2024, the continent is home to about 35,000 early-stage startups—more than any other region—and its tech workforce has grown sevenfold since 2015, according to the State of European Tech report.

“We have all the right ingredients: world-class talent, research depth in critical technologies, and thriving tech hubs—but our culture of innovation must change. With new world leaders in power and strong mandates for the tech sector, it’s imperative that Europe takes charge of its own destiny in the global tech race,” Cherry stated.

What This Means for European Startups

Cherry said its goal is to support founders with bold ideas that push technology forward. The firm pointed to past European success stories—Spotify, Supercell, Klarna, Revolut, and UiPath—as proof that big wins are possible with the right mix of determination and ambition.

The firm also emphasized that its investors have hands-on experience building major companies, including Zalando, Spotify, and Uber. That background, it said, will be a key asset in guiding new founders.

“Our network of the best founders in the world are equally committed to the cause of Cherry V: Ilkka from Supercell, Miki from Wolt, Jochen from Flix to name a few. We are proud to call them investors in Cherry, and grateful for all of our partners unwavering support for our vision.”

Cherry Ventures currently backs more than 130 startups and is positioning itself as a driving force in Europe’s tech ecosystem.