It looks like Berlin, famously described by the city mayor as “poor but sexy”, is now quite a bit less poor in the realm of early stage tech startup financing. Earlybird Venture Capital has announced the $100m first close of its fourth venture fund. The target fund size is $200m.
The new fund will be dedicated to early-stage investments in “disruptive global consumer and enterprise internet and technology businesses originating from Europe, with an emphasis on German speaking countries.” Much of that innovation is coming out of Berlin right now, which has become a hotbed for startups and a talent pool for locals, internationals and the highly-prized engineering talent close by in Eastern and Central Europe.
The fund now plans to “significantly add” to its seven existing portfolio investments in Berlin according to Christian Nagel, Managing Partner at Earlybird.
Berlin has benefitted from effectively being the newest city in Europe since the Cold War ended, and has always had a tradition of rebellion, on both sides of the Berlin Wall. That’s a great back-history and environment for creative and innovative entrepreneurs such as SoundCloud, Anem and ReadMill.
Then again, it’s still been most famous to date as the base for Rocket Internet, an incubator which has become one of Europe’s most successful vehicles largely by launching clone companies aimed at the large and wealthy German-speaking population in Germany, Austria and Switzerland.
However, it’s worth bearing in mind that the biggest VC funds for Europe still reside in London. Index Ventures closed a €350m early stage fund in 2009. Accel raised a billion dollars in ’08. And Balderton raised a $430m fund in ’09. That gives you a taster of the power of Mayfair in London’s West End.