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Plural’s unique European tech investment model defies market challenges

Posted:Jan 24, 2024 13:48 Category: AI , Europe , Startup , Posted by Lea Hogg

Departing from traditional venture capital models, Plural, a European tech investment firm founded by a number of well-regarded entrepreneurs, has successfully raised a substantial €400 million fund.

AI task force chair Ian Hogarth, founded Plural in 2021 along with Wise’s Led by Wise’s Taavet Hinrikus, Khaled Helioui, former chief executive of Bigpoint Games, and Sten Tamkivi, formerly of Skype amongst others (pictured above), Plural is charting a new course for European entrepreneurs at a time when funding faces a downturn, particularly in the wake of a significant drop in investment reported by venture firm Atomico.

Based in UK and Estonia

The London and Tallinn-based firm, established just in 2021, stands out by adopting a Silicon Valley-inspired strategy, emphasizing a founder-led and operator-centric approach to venture capital. Plural’s founders, boasting experience from successful startups, are breaking away from the conventional VC molud dominated by financiers. This unique methodology has enabled them to secure a formidable €400 million fund despite challenging market conditions, showcasing an alternative pathway for ambitious founders in Europe.

Plural distinguishes itself by concentrating on early-stage ‘deep tech’ companies. This category encompasses startups tackling intricate challenges such as nuclear fusion and precision medicine. In the 18 months since raising its initial €250 million fund, Plural has invested in 26 companies, with a focus on solving complex problems that have the potential to yield consequential innovations.

Ian Hogarth, the AI task force chair and co-founder of Plural, spoke about the importance of a smaller, more concentrated portfolio managed by former founders rather than career investors. This strategy, he believes, accelerates problem-solving and facilitates the rapid development of significant companies in Europe. Despite the focus, Hogarth acknowledged the challenges of identifying the best investment opportunities, highlighting areas such as bio-defence as underexplored territories.

The successful fundraising by Plural comes at a time when the investment landscape for European startups is somewhat challenging. The Atomico report revealed a nearly 50 percent reduction in investment in European startups in the previous year, with limited partners displaying reduced enthusiasm for venture funds compared to previous years.

Plural’s founders, however, remain optimistic about the future of European entrepreneurship. Plural’s 100 percent founder-led and operator-driven approach aligns with the successful patterns observed in Silicon Valley, catering to the preferences of ambitious founders seeking seasoned operators as backers.

Supporting next-gen entrepreneurs

Plural’s new fund has gained encouraging support from unique backers, including large university endowments that had not previously invested in Europe. While specific names were not disclosed, this suggests a broadening appeal and recognition of Plural’s distinctive model.

As Plural moves ahead in its mission to support the next generation of European entrepreneurs, its unconventional approach challenges the status quo, offering an intriguing alternative to the conventional venture capital landscape. The success of Plural’s fundraising endeavours in the face of market challenges underscores the resilience and potential of this alternative model, providing a beacon of hope for the European startup ecosystem.

 

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