Europe has become one of the most exciting startup markets in the world.
With Paul Murphy and Ross Mason joining Lightspeed’s Europe team, the sky is the limit.
Having grown up in London, I will always consider myself a European (ignoring Brexit). According to 23 & Me, I’m various parts English, German, Irish, Norwegian, and Swedish. Despite having lived and worked in the states for the last 10 years, I feel a strong affinity for entrepreneurs in Europe (I used to be one after all).
It’s one of the reasons why I’m happy to be on our Lightspeed Europe team, alongside Rytis Vitkauskas and Bejul Somaia. And I’m especially thrilled to officially announce the hiring of Paul Murphy to help lead our European office in the UK as a Partner, and Ross Mason who joins us as a Venture Partner.
Paul Murphy comes to us from Northzone, one of the top early-stage venture firms in Europe, where he’s spent the last three years as General Partner. Like all the members of our Euro team, he was a prior founder; Rytis founded the marketplace YPlan, I was early at the FinTech company Nutmeg and launched a wearables startup and Paul was co-founder and CEO of Dots, the addictive mobile game. All being ex-founders is important to us as we believe it better helps us understand what the founder is going through. Paul is also an investor in such seminal companies as Hopin, GIPHY, Tier, Bunch, Klang, and ThirtyMadison. Last but certainly not least, he’s also a brilliant manager and a truly lovely human being.
British born, Ross Mason founded MuleSoft in 2006 on the idea that connecting applications should be easy, building on the open-source Mule project he created. We were impressed by Ross’ clear vision, which convinced us to make our original investment in the company in May 2007. In 2017 he took MuleSoft public (NYSE:MULE) and in 2018 MuleSoft was acquired by Salesforce. Ross continues to advise MuleSoft’s strategy, whilst providing thought leadership on digital and cultural transformation. Ross is also a prolific angel investor, helping founders build the next generation of enterprise software companies and recently launched his own venture capital fund, Dig Ventures.
Why Europe, why now?
Lightspeed is no stranger to Europe. We’ve been funding companies there since 2007. But the pace has really picked up recently. Since we opened our Euro office in 2019 we’ve doubled our number of investments there — close to half a billion dollars all told, with the bulk of that coming in the last two years.
We now have 20 portfolio companies based in Europe, from Blockchain (which just closed a round valuing it at $5.2B) to Vinted ($4.5B), and from Zapp (stay tuned for further developments) to Grafana (recently closed $220M Series C at a $3B evaluation). And we’re only just getting started.
Historically, other VC firms have tended to shy away from the continent because of the added complexities. With 24 official languages, 9 active currencies, and more stringent regulations, Europe is often seen as too challenging an environment for startups to operate across borders. But we take a different view.
Europe’s population of nearly 750 million people is more than double the population of the US. It contains five large local markets with more than 50 million people, creating key hubs where successful startup ecosystems are emerging. Excellent STEM education has made Europe a hotbed of tech talent; it currently has just over 6 million software developers, vs roughly 4.4 million in the US. More relaxed immigration rules make it easier to hire people across borders.
More important, Europe’s startup ecosystem has matured rapidly in just a few short years. Successful exits such as Spotify, Ayden, Kazoo, Deliveroo, Allegro, Darktrace and more have created serial entrepreneurs, super angels, and role models for the next generation of founders. Strong and experienced seed funds, professional service providers, and government-supported schemes such as the European Investment Fund (EIF) have given the ecosystem an additional boost.
Europe is red hot, and not just from global warming. According to new data from Dealroom, Europe produced 72 new unicorns over the first half of 2021. Europe is the fastest-growing region for VC investment globally, having attracted ~$58B of investments so far in 2021 — exceeding China and the rest of Asia. This data signals the incredible momentum that we are currently seeing in the European tech and founder ecosystem.
The best is yet to come
We believe that the most impactful and ambitious founders are increasingly thinking about global reach and scale, and we understand that playbook. We support US companies expand into Europe, including Faire, Calm, and Cameo, and support our European companies expand to the US, including Blockchain, CleanCo and Multiverse.
One of Lightspeed’s key differentiators is that when we enter a new geography, we’re in it for the long haul. In addition to Europe, over the last 20 years we’ve opened offices in China, India, Israel, and Southeast Asia— and we’re committed to always keep them open.
I like to say we do things the right way and in this case, that means we don’t go in with sharp elbows. We’re looking for strategic partners within each region who are knowledgeable in the sector and can add value. For example, we co-led the seed round for Zapp with 468Capital, and co-led the Series A with Atomico. We believe that playing nice benefits everyone — most importantly, the founders and teams we partner with.
With Paul, Rytis and Ross as our boots on the ground (and Bejul Somaia and myself for a large part of the year), we anticipate a lot more activity in Europe over the next few years. It’s going to be an exciting time.
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