Banking

Valley investors are quitting for Miami. A star VC who backed Discord explains why he’s moved to Europe instead.

  • The youngest partner in VC firm IVP’s history Alex Lim has left Silicon Valley behind for Europe.
  • Lim told Insider that IPOs and $10 billion exits could quadruple in the next five years.
  • US investing royalty like Sequoia and General Catalyst have already set up shop in the Europe.

While Silicon Valley’s venture capitalists are upping sticks for Miami, one bright star has quit Sand Hill Road for Europe.

Alex Lim, youngest ever partner at IVP and a native Brit, has moved to London to become managing partner of Blossom Capital, the Series A investor set up by ex-Index Ventures principal Ophelia Brown.

At IVP, Lim backed now-listed

telehealth
firm Hims & Hers, gaming chat service Discord, software giant UiPath, and virtual events firm Hopin, which became Europe’s fastest-growing startup of all time earlier this year.

“What I would be thrilled to see, and I believe it’s absolutely possible to see, is a $100 billion company come out of Europe over the next 10 years,” 33-year-old Lim told Insider.

“That’s something Europe hasn’t done up to this point but looking at the grassroots efforts and what’s going on at the early and mid-stage right now, some of these companies do have that sort of potential.”

Blossom’s portfolio includes Checkout, an online payments provider, and Dija, a grocery delivery company said to be acquisition talks with Gopuff.

Some of Europe’s historical barriers have fallen away

Lim has been flying out to Europe every six to eight weeks to scout cities and build a network.

His reconnaissance of the bloc has led to him becoming “extremely bullish” about what’s happening in the various tech hubs.

“I wouldn’t be doing this if I didn’t believe Europe could challenge the US and China at least on some levels and maybe particular sectors as a tech ecosystem,” he said.

European startups have raised €43.8 billion in the opening six months of the year, already smashing last year’s record of €38.5 billion, according to figures from Dealroom.

US investors have also poured over $10 billion into the sector so far this year.

The chart below shows Europe’s share of global capital allocation is growing:

European share of venture capital

Europe’s share of venture capital globally has steadily increased as more US and Asian investors back firms in the region.

Dealroom


And US investors Sequoia, General Catalyst, M12, and Lightspeed Ventures have all set up shop in Europe over the last 18 months.

One reason for the excitement, according to Lim, is that it’s easier for European startups to expand. In the US, a startup can grow rapidly in its home market. A European competitor must expand beyond its own borders to see equivalent growth — historically a challenge with different languages, cultures, and hiring practices.

“The homogenization of the European tech market is a very, very good thing for tech,” Lim said. “You’ve seen it in certain consumer markets like

fintech companies
that are able to operate across European borders. That’s really, really exciting.

“If the European Union is able to get out of its way a little bit and continue making this true single market, I mean the GDP and the economic firepower that Europe has is very similar to the US as a whole.”

No ‘valuation delta’ between US and European startups

Lim predicts European IPOs and $10 billion exits to “triple or quadruple” over the next five years and has backed Blossom portfolio firm Checkout.com to become the region’s first $100 billion startup.

He added that with the “top 5% of companies, the real cream of the crop, the ones building global companies, the ones attacking global markets, there’s really no valuation delta between the US and Europe any more.”

And while European founders now have US-style ambition, he said, they want top-tier investors close to home.

“Part of the driving factor behind joining Blossom is that while I believe those companies know their worth, they also do prefer having local investors within a couple of time zones,” Lim said.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button