European Startups Struggle to Raise Funds Amid Economic Slowdown
Hedging Their Bets: European VCs Focus on Global/US Play
In the midst of an ongoing economic slowdown in Europe, startups continue to struggle with fundraising. However, European Venture Capital (VC) firms are adapting by shifting their focus towards startups with a global or US play in mind. This strategy is yielding significant interest from Limited Partners (LPs), as witnessed by Frontline Ventures’ recent fundraising efforts.
Frontline Ventures Raises $200 Million Across Two Funds
TechCrunch has learned exclusively that Frontline Ventures has successfully raised $200 million across two funds, namely Frontline Growth and Frontline Seed. These funds will enable the firm to continue making strategic bets on both sides of the Atlantic. Notably, Frontline already had a reputation for investing in both Europe and North America, with its new funds maintaining this dual-focus approach.
Giant Ventures Closes $250 Million in Two New Funds
In January, Giant Ventures closed two new funds totaling $250 million to invest in startups on both sides of the Atlantic. This development highlights the trend among European VCs to hedge their bets by expanding their focus to global or US-play startups.
Frontline’s Strategy: Focusing on B2B Software Companies
Frontline believes that US scale-ups generally have better odds at succeeding when they expand operations to the other side of the Atlantic. According to Brennan O’Donnell, co-lead of Frontline Growth with Stephen McIntyre, "Though it is a traditionally undervalued market, Europe accounts for over 30% of global revenues of top-performing B2B software companies at IPO."
The Value of Europe as a Market
While headlines may suggest that the European venture landscape is struggling, statistics indicate that startups on the continent still raised more capital last year than in previous years. Moreover, pre-seed and seed investments have not slowed down significantly.
Frontline Seed’s Strong Track Record
O’Donnell noted that Frontline Seed has an especially strong track record when it comes to helping companies raise their Series A. Given that pre-seed and seed investments haven’t slowed down as much as later stages, this could be a valuable strategy for European startups hoping to become transatlantic scale-ups or IPO candidates.
Dublin’s Frontline Ventures Raises New $83.8M Seed Fund
In related news, Dublin-based Frontline Ventures raised a new $83.8 million seed fund for European B2B startups. This development underscores the firm’s commitment to supporting early-stage companies with growth potential.
European Startups: Opportunities and Challenges Ahead
As the economic slowdown in Europe continues, startups face significant challenges in raising funds. However, European VCs are adapting by shifting their focus towards global or US-play startups. Frontline Ventures’ recent fundraising efforts demonstrate this trend, highlighting opportunities for European startups to scale up and become transatlantic leaders.
What’s Next?
As the VC landscape evolves, it will be interesting to see how European startups navigate these changing conditions. With Frontline Ventures at the forefront of this shift, we can expect more exciting developments in the months ahead.
About Anna Heim
Anna Heim is a freelance reporter at TechCrunch, covering SaaS and other topics. She’s also a former LATAM & Media Editor at The Next Web and Sciences Po Paris alum.
Get the Latest News
Stay up-to-date with the latest news from TechCrunch by subscribing to our daily newsletter, AI newsletters, Space newsletter, Startups Weekly, or other publications that suit your interests.
Related Stories
- What will this year bring in VC? We asked a few investors
- Inside the wild fall and last-minute revival of Bench, the VC-backed accounting startup that imploded over the holidays
- OpenAI’s take on AI agents could come in January
