Multiplicative Effects at Play in European VC Over the Past 15 Years

In this month’s newsletter, we look at the multiplicative effects at play in European VC over the past 15 years.

Multiplicative Effects at Play in European VC Over the Past 15 Years
Photo by Mika Baumeister / Unsplash

In this month’s newsletter, we look at the multiplicative effects at play in European VC over the past 15 years. And we are very excited to be hiring again, so please pass on the message to any star candidates!

Rise of Europe: Compounding Growth of our Tech Scene

I recently joined Aldea Ventures' Carlos Trenchs for a keynote fireside chat at 4YFN Barcelona. We discussed how vastly different European venture was when I co-founded Atomico 15 years ago. The ecosystem was only a fraction of the size it is today. Just looking at a few of the numbers tells an incredible story.

According to Dealroom, in 2005 €2.1bn annually was going into European VC and there were only 239 active VCs. Today, this number is €50-60bn - a 25-30X increase - a 24% annual growth rate over that 16 year period, and there are over 2000 active VCs - that's nearly ten times as many.

While these flashy statistics illustrate powerful compounding growth, I think there is a much deeper multiplicative effect at play here.

Companies coming out of Europe are hugely diverse, attempting to solve a broad range of issues and touching more of society than ever before. With each generation of new company entering into the multi billion Euro category, there is a domino effect with more companies being formed. We can see this very clearly in the financial services sector - Adyen, Klarna, Revolut, Monzo and Wise all became multi billion dollar companies one after another - and this is becoming true in gaming, healthcare, marketplaces and enterprise software.

Such category leaders are a breeding ground for founders that want to take on a new challenge, usually with the ambition of building something even bigger than where they came from. At Moonfire we have invested in founders coming out of Revolut, Supercell, Spotify and King, as well as other rising stars across Europe.

Furthermore, the success of Europe's VC ecosystem attracts world-class tech talent from across the globe, students who prize an entrepreneurial journey more than any other career. Leaders and operators from global tech companies like Facebook and Google (with massive operations here in Europe) are bringing their scaling expertise to the table. And lastly, there is a larger number of serial entrepreneurs than ever before; they've got the battle scars to show for it and are brimming with ambition.

Success is breeding success. This is a new Europe driven by a new class of innovators.

Portfolio News

Willa, the FinTech solution that provides creative freelancers with a hassle-free, paper-free way to ensure they get paid on time, has been part of the Moonfire portfolio since June 2020. Last week, Willa raised an $18 million Series A round, which will allow it to expand its invite-only beta to its waitlist of over 150,000 freelancers in the United States. Willa’s Series A was led by New York-based FinTech Collective with EQT Ventures and Entrée Capital also joining the round.

Started by a trio of ex-Riot co-founders, Amihan Entertainment is an early, venture-backed game studio that aims to craft uplifting, lifelong games for all humans. Their team is 100 percent fully remote and they firmly believe that their diversity of experience empowers them to build world-class IP. Co-founder Naomi McArthur broke the news on Twitter this past month. Everything’s still pretty under wraps, but check out their early concept art!

Moonfire Zoom Series

This month we hosted serial entrepreneur, current Director of Product at Facebook and Moonfire advisor, Henry Erskine Crum. Henry previously co-founded Spoonfed, Evently and Listora and is now working on Facebook’s e-commerce offering.

Henry highlighted the importance of having a clear vision for the future of the world and where your product fits within that world. He also emphasised the value of sequential frameworks and strategic building blocks as the bedrock of a solid product management framework - when time and coding hours are limited, it's important to know why ideas are important and the order in which you are going to do them.

Thanks for reading and keep an eye out for next month's edition.