Berlin’s status as the hottest startup hub in Europe, if not the world, has been given a boost with the first close of a new fund from Earlybird Venture Capital. The $100 million (€75 million) close will be used to fund early-stage investments in disruptive tech companies.
Earlybird’s Max Claussen spoke exclusively to Silicon Allee about the fund and what it means for the Berlin scene. You can hear some of his thoughts in this interview on SoundCloud (see below also).
The fund includes institutional investors from around the world, including the US, Japan and the Middle East, in a clear demonstration of how Berlin is increasingly attracting global investment.
Max told Silicon Allee: “This is great news for the scene here in Berlin in terms of seed funding. We will be looking to do 10 to 15 seed investments out of the new fund, many of them in Berlin.”
The company, which currently manages more than $700m in assets, hopes to eventually reach a target of $200m for the fund, known as Earlybird V.
And the type of entrepreneurs they are looking to invest in is very clear: “We’re targeting disruptive business models which can create some kind of lock in, with strong user engagement. It also needs to be something really global – Berlin is now a place where you can create a global business; that has changed over the last couple of years. It’s about backing teams with global ambitions and potentially creating billion dollar exits.”
The announcement is part of a bigger trend which has seen growing amounts of international money flowing into the startup ecosystem, with Sandstone and Partech amongst those raising funding in recent times. Max said that Berlin has become recognised as a breeding ground for new category leaders, companies such as SoundCloud and Wooga, and that many within Germany are starting to shift focus from Munich and Hamburg – where the Earlybird office will close in eight weeks – and towards the capital.
Max also revealed that Earlybird has already agreed to at least two new investments which will be announced in the near future. He explained that the company likes to get in early and have an investment period in the 6-8 year time frame rather than 2-4.
And it’s not just startups who are seeking to expand with this fund – Earlybird itself is looking to take on two new associates with experience in tech or business.
Christian Nagel, managing partner at Earlybird, said in a press release: “We are deeply committed to founder success and in helping entrepreneurs build tomorrow’s category leaders. In addition to maintaining our continental investment focus, we plan to significantly add to our seven existing portfolio investments in Berlin, which has become a nourishing ground for global tech companies.”
And Andreas Schmidt, head of primary private equity at Deutsche Bank Private Equity, said: “Earlybird’s announcement today is another sign that venture capital is re-emerging as an attractive asset class on the continent and underscores that, despite the sovereign debt crisis, innovation has not fallen victim to recession and the financing of novel companies that shift paradigms has little correlation to macro economic conditions.”
The lesser-spotted Berlin Earlybird office