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Venture firm Accel just raised a new $500 million European fund

TechCrunch TechCrunch 11/04/2016 Romain Dillet

Accel is on a roll. Shortly after announcing a $500 million seed fund and a $1.5 billion growth fund for U.S.-focused investments, the venture firm has yet another fund. This time, Accel raised $500 million for Accel London V, a fund focused on Series A and B investments in Europe and Israel.

The firm announced Accel London IV nearly two years ago — it was a $475 million fund. Despite an increasingly uncertain economy, it looks like Accel has no issue raising new funds. Raising a new fund every two or three years is a healthy cycle for VC firms doing well.

Recent European investments include Deliveroo, Funding Circle, BlaBlaCar and ForgeRock — so the fund can invest in anything from marketplaces to fintech startups and enterprise software solutions as long as the startup is based in Europe or Israel.

When it comes to exits, Supercell has been sold to SoftBank and was a spectacular exit for Accel. More recently, Showroomprive went public in France. In total, Accel’s London team has generated $15 billion in exit market value in 2015 and taken a cut of this big cake — not too shabby.

Maybe you’re an entrepreneur and you’re thinking that today is your lucky day! Accel now has plenty of money on its bank account and you want to pitch them your beautiful startup. Here’s what the Accel team is looking for. The firm wants to focus more on marketplaces, software-as-a-service business models and infrastructure projects.

Accel already has a well-established reputation in Europe. And you may already know that the firm tends to shy away from seed rounds and start investing in Series A rounds. The firm doesn’t plan to change any of that with the new fund.

I’ve asked Accel partner Harry Nelis a few questions about Accel’s strategy in Europe.

TechCrunch: Are you going to focus on Series A rounds like with the Accel London IV fund?

Harry Nelis: Yes, we’re going to continue to focus on Series A investments. Early stage is our sweet spot and where most of our investments are made — we typically invest in Series A and Series B rounds. Although, sometimes we go in a bit earlier when we meet an exceptional entrepreneur with a great idea or we’ll write larger checks when there’s a strategic opportunity to do so.

TC: What are going to be the average checks of this fund compared to the previous fund?

HN: We typically make Series A and Series B investments, which are between $5 million and $10 million for the first round, and ultimately invest about $15 million per company over time. 

TC: What do you think of the current cooldown in the U.S.? Is it going to affect Europe and Israel as well or is it an opportunity for the European tech scene?

HN: In certain areas, private market valuations are out of kilter, and there will be an adjustment. This is particularly pronounced in the U.S. However, a private market valuation is really a glimpse into the future. Any meaningful valuation takes hard work, and Europe’s entrepreneurs are working hard to build sustainable businesses.

TC: Any strategic change worth mentioning about Accel's strategy in Europe or is this fund a way to keep doing what Accel has been doing over the past few years?

HN: From the start, our strategy has been to partner with the most extraordinary entrepreneurs and companies from their earliest stages through their growth. This has served us well, leading to investments in some of Europe’s most successful enterprise and consumer technology companies, including Avito and Showroomprive, Supercell and Qliktech.

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