Plural, a venture firm launched by Wise and Skype founders, secures $436 million for new fund targeting European tech startups

For over a decade now, Europe has been trailing behind the United States in terms of startup funding. However, there’s a promising shift on the horizon, as a team of seasoned entrepreneurs, the brains behind Wise and Skype, is gearing up to make a difference with fresh funding to support emerging and promising European startups.

Plural, a venture firm founded by the minds behind Wise, Skype, and Songkick, today announced it has closed 400 million euros ($436.4 million) for its new fund, Plural II. This fund will primarily focus on investing in European tech startups, particularly those with innovative potential yet to be recognized by mainstream funds like Atomico.

Co-founder Taavet Hinrikus, formerly of Wise, said that Plural stands out from its competitors as it was initiated by entrepreneurs with valuable “scar tissue” from their own experiences. This fresh fund aims to compete with established players such as Atomico, Balderton Capital, and Creandum, bringing a founder-led perspective to the forefront, CNBC reported.

Plural Fund II arrives just 18 months after the firm raised its last fund, a 250 million-euro vehicle. Co-founders include Taavet Hinrikus, Ian Hogarth, Sten Tamkivi, and Khaled Helioui. Hinrikus highlighted that Plural, with its “unemployable” partners, aims to be a more effective partner to startups in Europe, especially considering that only 8% of venture capitalists in Europe are former founders, a stark contrast to the 60% in the United States.

In an interview with CNBC, Hinrikus said, “If we look at a lot of VC funds, you have lots of people who have done great work with spreadsheets, not with startup life. In our case, it is seen as a core criteria for choosing our partners that they’re totally unemployable.”

He also added, “It feels like it’s World War Three, and we’re in the trenches together as one of the founders. So, if we look at the track record, and our ability to get the deals done, I think that all seems to say that this is really missing in Europe.”

The investment for the fund came from a mix of limited partners, including British and American university endowments, U.S. foundations, insurers, and strategic family offices in Europe and the United States. Despite the challenges of fundraising in a tough environment, Plural exceeded its own fundraising target, indicating significant appetite from institutional backers.

Plural plans to invest at a rate of two to three investments per investor per year with its new fund. The firm, known for its “unemployables,” who are active angel investors, has already made 27 investments, supporting companies in sectors such as AI, frontier technology, and climate and energy.

Hinrikus clarified that Plural is not on the lookout for the next major software-as-a-service name in Europe but is instead interested in deep tech, focusing on founders solving fundamental scientific problems in areas like energy, AI, and healthcare. The firm aims to build technology giants in Europe by identifying winners in emerging categories often overlooked by other funds.

Carina Namih, a partner at Plural and a biotechnology entrepreneur, expressed optimism about seeing major technology names emerge in Europe, driven by rapid technological breakthroughs and increased access to capital. Plural’s new fund launch adds to the growing startup activity in Europe, where the ecosystem has evolved into a thriving community over the past decade.

“The fact that, in a difficult fundraising environment, we’ve been able to raise a fund of this scale, with a huge amount of appetite from LPs, just shows you that some of the most sophisticated investors in the world are really recognizing the opportunity in Europe, and really want to see a fund the shape of Plural,” Carina Namih, partner at Plural, told CNBC.

The venture capital firm Accel reported that the presence of $1 billion-plus unicorn firms has acted as a catalyst for startup creation, with numerous startups founded by former employees of European and Israeli unicorns. The fintech sector, in particular, has seen significant growth, with many new startups emerging from the success of fintech unicorns.

This surge in startup activity has transformed the European ecosystem, making it easier to start companies with the groundwork laid by previous successes in engineering and marketing. The trend indicates a positive flywheel effect, creating a more dynamic and robust entrepreneurial environment in Europe.