Accel’s London office (which is the global investment firm’s base for all investments in Europe and Israel) has secured $500 million for its fifth fund – dubbed Accel London V – to back early-stage startups across the region in the coming years.
The fund is similar in size to other and previous funds raised by Accel, and obviously one of the biggest funds in Europe, particularly as it focuses mainly on Series A and B rounds.
That said, Accel partner Harry Nelis (pictured below) explained to me over the phone yesterday that Accel London will opportunistically chase both seed and later-stage deals as well.
The overall size of the fund is a logical one, Nelis further pointed out, as Accel typically looks to invest around $15 million on average in the lifespan of a portfolio company, and for its size needs to make around 30 investments out of a single fund.
Nelis opted not to name the investors in the new fund, noting it was a mix of charitable foundations, university endowments, pension funds and (mostly US-based) fund-of-funds.
Geographically, Accel London says it is totally agnostic when it comes to making investments, and thus willing to back the best companies its team comes across regardless of where they are based. But all of Accel London’s 6 investment partners are based in the UK, and it’s natural for them to focus most of their attention on opportunities in London and mature hubs such as Berlin, Paris, Stockholm and Tel Aviv.
Nelis wouldn’t comment in much detail about which geographies in Europe he sees coming up in the future, but noted that Accel hadn’t done investments in Spain for a while after making a total of three out of its previous funds – so it’s obvious that the firm will be closely looking at other opps in the Southern European country in the near future. Russia and Finland are other regions it continues to believe in, given its hits with Avito and Supercell, respectively.
As for verticals, not much will change either now that Accel London has raised its fifth fund. A big focus will be on fast-growing SaaS and FinTech companies in the region, but that was already the case with its previous fund.
Another thing that won’t change: Accel London’s investment team (which totals 14 people if you don’t only count its general partners) will continue to making capital deployment decisions independent of its US team, although Nelis did stress Accel’s teams in the US, Europe and India share information on investment opportunities and portfolio companies as ‘part of the system that’s in place’.
Accel originally opened its London office back in 2000; total funds under management in Europe and Israel now stand at $2.5 billion. Also worth noting: Accel London team’s investments have generated over $15 billion in exit market value in 2015 alone, so expect the team to be quite hungry to repeat / better that success.
As for the ‘competition’: Index Ventures recently closed a $550 million fund, while Atomico is reportedly out raising $750 million for its next vehicle, and Rocket Internet is shooting for the €1 billion barrier (it’s already confirmed a $420 million tranche). Balderton’s latest fund was raised back in April 2014 and came in just north of $300 million.
Also check the links below for other fresh funds in Europe (and expect more to pop up in 2016 as opportunities to invest in European and Israeli tech scale-ups continue to come knocking).