As a result of their growing numbers, goals, and status, European entrepreneurs collectively received a record-breaking $100 billion or more investment in 2021. Now, a venture capital firm in London has completed a record-breaking round of investment to precisely address that potential. According to the company, Blossom Capital, which invests in European businesses at the Series A stage, has secured $432 million in its third fund from a diverse group of limited partners based in Europe and the United States. According to the firm, Blossom Capital’s Series A fund, which has raised $432 million to far, is the biggest fund dedicated to European entrepreneurs to date.
Notice that Balderton raised a $600 million round for “early stage” investments last year, which I assume gives Blossom the right to claim to be the largest company solely focused on Series A investments.)
Blossom was founded by Ophelia Brown, who previously worked at Index Ventures and Local Globe. The company’s development has paralleled that of the European startup scene.
For years, Silicon Valley was the hub of all activity — so much so that even when firms were conceived in Europe, they looked to the United States to get momentum and expand, raise significant funds, and attract top-tier personnel. Startups were often required to relocate to the United States, and especially to the Bay Area, as a condition of receiving investment from venture capital firms established there.
However, the Valley grew more costly and less competitive as time progressed. As a result, both entrepreneurs and investors — armed with ever-increasing sums of money from LPs eager to enjoy the benefits of a rapidly-growing software sector — have begun to do business in new markets. That tendency received a significant boost due to Covid-19, which altered general ideas of where and how to do our job. In response to the possibility, venture capitalists from Silicon Valley are establishing and investing in enterprises in the region.
If one of the most valuable characteristics of a venture capitalist is their ability to detect (and then finance) a trend early on, it’s a relatively strong vote of confidence that Blossom was quite prophetic in predicting how things would change for companies in the European market.
“We started in 2018 with the assumption that there would be a gap in Series A investment,” Brown said. “Instead, we’re seeing that opportunity set expanding year after year, and not just in London, Paris, and Berlin, but in a slew of other European cities, as well.”
By this, the rounds grown here have also increased in size.
A decade ago, it was pretty unusual for a Series A round of funding for a European firm to be less than $5 million in size. However, starting in 2021, the median size began to approach $10 million, and it is often much, much more significant than this. Although this is still outperformed by rounds in the United States, where the median Series A in 2021 was $13 million, the total amount raised may be far more than this amount. (Also, I’m ready to bet that when we see more successful exits, huge growth milestones, and soaring values shortly, Series A rounds in various locations will converge to be on par with one another.)
The venture capitalists who are making their way into Europe, on the other hand, are fewer rivals than partners for the moment, turning to Blossom for more significant local insights for future investments. According to the company, Accel, Addition, Coatue, Greenoaks, and Tiger Global are among the companies that have invested alongside the startup.
As a generalist venture capital firm, Blossom has invested in a diverse range of startups, including instant delivery startup Dija (which was acquired by GoPuff last year), payments specialist Checkout.com (which announced a $450 million round last week that valued the company at $15 billion), business forecasting specialist Pigment, and startups in the fields of cybersecurity and messaging as well as video startups.
This current fund will essentially follow in the footsteps of the previous one, with one major exception: one-third of its funds have been set aside expressly for bitcoin firms, which is a first in the industry.
It’s an area in which Brown and her firm were interested from the beginning — she purchased her first bitcoin in 2012 — and, despite some of the speculation and volatility that have characterized the cryptocurrency market in recent years, Brown remains optimistic that some significant companies will emerge from it in the long run.
Monday, a platform that allows people to buy and sell cryptocurrency using fiat currency, is the firm’s first significant investment in the space; it was made as part of the startup’s eye-watering $555 million Series A round in November of last year (as we previously stated, these rounds were frequently significantly higher than $10 million in value.)
Managing partner Alex Lim (who just joined Blossom from IVP) said that the business intends to invest more in crypto infrastructure, Web3, protocols, and additional consumer services in the future.
“Our priority is to invest as soon as possible,” he stated. “It’s not simply a bubble, believe it or not. It is possible to build marketplaces in this area.”
It is noteworthy because Blossom was started and is headed by a female entrepreneur (Imran Ghory, the third partner, is pictured above left, with Lim and Brown). Females continue to be underrepresented in venture capital, particularly in Europe. According to Brown, diversification is a significant element for Blossom. Still, the firm’s strategy is to engage with portfolio firms to increase the diversity of their workforces rather than using diversity as a component of the entire investment thesis.
When it comes to [our investment] plan, “we don’t think about diversity as much as we do when it comes to how they think about embedding it into their team or products, or how they think about addressing it with consumers,” she added.
It will be intriguing to observe how the infusion of still more money will affect how companies in Europe expand over the long term, not just in terms of how they scale but also in terms of whether or not this will influence their exit possibilities. It wasn’t that long ago that a promising firm in Europe had a choice between two options: either relocate to the United States to continue its growth or get purchased.
According to Brown, when investors invest in a firm, they want it to operate as a stand-alone operation in the long run. “I believe the odds of that are now considerably higher,” he added. Selling a firm for more than $250 million has been almost unthinkable in the last ten years. Startups now have a far more comprehensive range of possibilities.”