It is often remarked that European venture capitalists lack the financial clout to compete with their American counterparts, who frequently secure funding in excess of a billion dollars. This sentiment is underscored by the recent announcement that Berlin-based Cherry Ventures has successfully closed its newest fund at $500 million, intended for both early-stage investments and follow-on funding for Series B and later stages.
Cherry Ventures articulated its ambitious goal in a statement, aiming to leverage this fund to foster the development of the “first trillion-dollar company in Europe.” The firm expressed a desire to combat the prevailing “doom and gloom” narrative regarding Europe’s economic prospects.
This is an encouraging perspective; however, there is limited evidence suggesting that European startups are currently advancing towards a trillion-dollar valuation. For instance, if artificial intelligence evolves into the powerhouse many predict, only a select few of the highest-capitalized companies in this sector are based in Europe. Recent analyses indicated that AI companies in Europe attracted around $8 billion in funding, in stark contrast to the approximately $97 billion raised in the U.S. for AI startups. While funding isn’t the sole determinant of success, it remains a crucial component, as recognized by Cherry and other VCs.
Cherry Ventures did not specify a timeline for achieving its objectives.
In the United Kingdom, which is the largest startup hub in Europe, October saw a 50% decline in venture capital funding for local startups compared to the previous quarter. Startups managed to raise approximately $2.9 billion, according to a report by Dealroom and HSBC Innovation Banking.
Interestingly, Cherry Ventures was absent from last year’s HEC-Dow Jones Venture Capital Performance Ranking, which was topped by Bek Ventures (formerly Earlybird Digital East Fund).
Meanwhile, Balderton Capital, an investor in Revolut, successfully raised $1.3 billion for European tech startups, echoing concerns that Europe is lagging in capitalizing on the AI boom.
Cherry’s previous fund, highlighted in early 2022, totaled €300 million (around $312 million). The VC’s investment portfolio includes businesses such as The Exploration Company, a space tech startup; Flink, a grocery delivery service; Robeaute, a developer of neurosurgical microbots; Flix SE, the parent company of Greyhound; and the logistics unicorn Forto.
Limited Partners (LPs) involved in this new fund include notable entrepreneurs like Miki Kusi from Wolt; Ilkka Paananen, CEO of Supercell; and Jochen Engert from Flix.
To date, Cherry Ventures has celebrated 18 successful exits, including CoW Swap, Ninetailed, and Homelike.
Compiled by Techarena.au.
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