European VC Plural has established itself as a standout venture capital firm in the region, led by entrepreneurs who have successfully grown their startups. The founders, including Taavet Hinrikus from TransferWise/Wise, Sten Tamkivi, and Ian Hogarth, founder of Songkick and currently involved in the U.K. government’s AI safety strategy, are steering Plural into a new phase. The firm is scaling up with a fresh €400 million fund to support what Hogarth terms “transformational” startups in the region, aiming to provide operational expertise to help them flourish as businesses.
Plural, a venture firm set up by the founders of Wise, Skype and Songkick, raised 400 million euros ($436.4 million) for a new fund. https://t.co/yEutGoymlx
— CNBC International (@CNBCi) January 23, 2024
Plural maintains its primary focus on early-stage startups rather than growth rounds, even as it navigates the challenges of a shifting venture capital landscape. Launching in June 2022 amidst a thriving startup scene, Plural’s €250 million debut fund was a response to the record-breaking $100 billion raised by European startups in 2021, as reported by Atomico in its annual survey.
The current venture capital scenario in Europe tells a different story. A weakened economy has led to a retreat in venture capital activity, with startup investment dropping to $45 billion in 2023. Notable investors like Omers and Coatue downsized or closed operations, contributing to a general decline in valuations. Plural, too, faced its share of challenges but continues to invest from its first fund.
Plural, an early-stage investment fund set up by founders and operators, announced a new €400 million fund to back the most ambitious founders on a mission to change the world through technology 🇬🇧 🚀https://t.co/llJ18NKBHo
— EU-Startups (@EU_Startups) January 23, 2024
Plural’s latest fund, exceeding its original target, saw significant participation from an unnamed U.K. academic institution, alongside other institutions and family funds from the U.S. and Europe. Co-founder Khaled Helioui and recent addition Carina Namih, with a track record in health tech, are part of the Plural team that has made 26 investments from the first fund. Key categories driving Plural’s investments include:
• Artificial intelligence (AI).
• Accounting for nearly one-third of all assets, “frontier tech” at 16%.
• Climate and energy-focused startups at 14%.
Notable investments from the first fund include London-based Robin AI, Isometric, Proxima Fusion, and Unitary AI—plural plans to continue exploring similar categories in its latest fund but with a different partnership approach.
Ian Hogarth, now chair of the U.K. government’s newly formed AI Safety Institute, has shifted his focus away from large language models like OpenAI’s, ensuring no economic benefit from AI investments. While AI remains a focal point, Plural acknowledges diverse opportunities in the market, especially in the consumer sector. Hogarth emphasizes the importance of founders with a unique vision and a differentiated approach, seeking opportunities beyond the crowded landscape of identical AI startups. Plural remains optimistic about uncovering exceptional opportunities in the consumer space in the coming years.
After taking on a leading role in the government’s AI Foundation Model Taskforce and contributing to organizing the high-profile AI Safety Summit in the U.K. last year, Hogarth has assumed the chair position at the newly formed AI Safety Institute. Consequently, Hogarth has distanced himself from investments and economic benefits related to AI companies working on huge language models like OpenAI’s or Anthopic’s. The government’s focus on AI safety is centered around frontier models.
In describing the process, Hogarth mentions a series of mitigations, including divestments and other actions, ensuring that he cannot derive economic benefits from his role. While AI is in the spotlight, Plural recognizes it’s not the only game in town. The current market conditions have provided investors with more clarity in pursuing what Hinrikus terms “consequential businesses.”
Despite the notion that the consumer ship may have sailed for some, Plural actively seeks to board that ship. Hogarth expresses confidence in the emergence of unique opportunities in the consumer sector in the next few years. The firm is particularly interested in founders with a singular vision, those taking a less conventional route and possessing a solid perspective on how the world is evolving.
In summary, Plural’s journey, marked by its founders’ entrepreneurial background, showcases its commitment to supporting early-stage startups in Europe. The venture into a fresh €400 million fund signals an ambitious endeavor to back transformative startups in the region, providing capital and crucial operational know-how. Despite challenges in the current venture capital landscape, Plural remains resilient, adapting its strategies to navigate economic fluctuations and continue making impactful investments. The firm’s shift in focus within the AI realm and keen eye on emerging opportunities in the consumer sector reflect its dynamic approach to staying at the forefront of the ever-evolving startup ecosystem.