Investment Firm Plural Launches $436 Million Fund to Support European Startups

Venture capital firm Plural has launched a 400 million euro ($436.4 million) fund to support technology and AI startups in Europe, CNBC reported on Tuesday (Jan. 23).

The new fund, Plural Fund II, comes just 18 months after the investment firm raised its previous fund of 250 million euros.

Plural’s founders include Wise co-founder Taavet Hinrikus and Sten Tamkivi, co-founder of Skype.

According to Hinrikus, only 8% of venture capitalists in Europe are former founders, compared to 60% in the United States. As such, Plural believes that its founder-led approach will make a significant difference in supporting European entrepreneurs.

“It feels like it’s world war three, and we’re in the trenches together as one of the founders,” Hinrikus said, per CNBC. “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.”

Plural has already made 27 investments in various sectors such as law-focused artificial intelligence, nuclear fusion power plant development and drug discovery platforms. The firm plans to invest at a pace of two to three investments per investor per year with its new fund. The fund’s largest sectors by investment are AI, frontier technology, and climate and energy.

The launch of Plural’s new fund adds to the growing startup activity in Europe over the past decade. Former employees of European and Israeli unicorns have founded 1,451 new startups, per a report from venture capital firm Accel, with a significant number coming from the FinTech sector.

This development is especially encouraging for European startups, which have been reconsidering expansion in the face of an ongoing venture funding shortage in the region.

As PYMNTS reported in August, the amount of venture capital funds invested in Europe fell by 61% in the first half of 2023, a steeper decline than what U.S. firms had to contend with.

The challenging climate has led to a rise in popularity of alternative methods like government funds, corporate partnerships and angel investing, which are being used by cash-strapped FinTechs to complement traditional funding avenues.

As Angela Lee, founder of 37 Angels and a VC professor at Columbia Business School, told PYMNTS in an interview last year, “[angel investing] has just exploded. ‘Shark Tank’ is the most watched family show in the world, and that means a lot of people have been introduced to this investing class that they didn’t know about a decade ago.”