Klaus Hommel has been investing in some of Europe’s most successful start-ups. Spotify which is a music-streaming service and Klarna which is a Swedish online payments company, Facebook and Airbnb which is a vacation rental company are some of tech startups he has in his kitty. Hommel has decided to double on Europe’s tech sector. His venture capital firm Lakestar has announced a fund worth €350 million. US online shaving company Harry’s and social network for bond trading Algomi are part of the portfolio. He plans on spending ambitious amounts of his new money on tech companies in industries like automotive and energy who are moving rapidly towards new technology to make lives simpler. He has previously invested in King Digital, the maker of Candy Crush, but he sold his share before the company went public, which cost him $1 billion. There is a rekindled interest among venture capitalists and private-equity firms to invest in European venture capital.
Companies like Zalando, King Digital and Mojang have caused this change in the minds of the investors and lured them with sizable returns to early investors. There are 131 start-ups valued at more than $1 billion, including European ones like Deliveroo which is a food delivery company. European venture capital firms have raised €2 billion in the second quarter which is 63 per cent more than the same period last year. Although the number is still small in comparison to $12.9 billion US venture capital raised in the same period, experts believe Europe is soon reaching funding highs of the dotcom era. There is speculation that the industry could be entering a tech investment bubble owing to the sudden sharp fall of markets around the world last week. Thus many companies like Index Ventures and Accel Partners are focusing their attention on startups with predictable business plans at a later stage to make their investments less risky.
Google Ventures on the other hand is investing full fledged ($100 million) in less-established European tech companies. Thanks to smartphones, cloud computing etc trends have now spread across to the public thus technology is no more secluded to small group of web entrepreneurs/ technical experts like it was in the dotcom era. European entrepreneurs have become more tech savvy and are open to learn directly how to run their business their from Silicon Valley counterparts.