Until recently Taavet Hinrikus, cofounder of Wise, and Sten Tamkivi, cofounder of Teleport, had banded together as a sort of ‘mini Angel brand’ known as “Taavet+Sten”. Tamkivi has done around 50 angel deals, Hinrikus has, reportedly, done as many as 150. But they were effectively pooling their personal capital as Angel investors. However, evidently, this wasn’t enough for either, plus as former co-founders, they were viscerally aware that almost no VC funds in Europe have been founded by actual former entrepreneurs. And if you think about it, they’re right.
Atomico might have Niklas Zennstrom, or PRO Founders has (or rather had, as both are far more concentrated elsewhere) Brent Hoberman (LastMinute.com) and Michael Birch (Bebo). But these are hardly recent entrepreneurs, to put it mildly. In the US, founder-founded VCs are far more in abundance than in Europe, a fact which has not escaped many a European entrepreneur.
So today’s launch of a new project involving Hinrikus and Tamkivi, together with two others, is a tantalizing glimpse of a new wave of European VC, founded and run by former tech startup ‘operators’.
“Plural”, is a new € 250m early-stage venture fund started by Ian Hogarth (formerly Songkick), Tamkivi, Hinrikus and Khaled Heloui (a former tech CEO). The fund founders say other tech founder/partners will be unveiled in due course, and that they have ambitions to lead early-stage funding rounds from the earliest stages all the way up to € 10m. The band will also focus on 4-5 deals a year per investor, so that they can be “hands-on”.
As the Plural founders point out, less than 10 per cent of investors in Europe are former operators, in contrast to more than half of tech investors in the US. This means founders miss out on the experience of other founders-turned-investors, and it’s a valid criticism.
In a statement Helioui said: “So much opportunity is left untapped today as uncommon founders fail to meet standard investors’ pattern recognition criteria. Sadly investors lack the risk appetite needed to fulfill founders’ ambitions and the full extent of the impact of those founders is not realized. There is so much potential to unlock, especially in Europe, if we change the funding mechanisms that still act as conservative gatekeepers today. ”
Tamkivi said: “We are huge optimists for the potential of technology coming from Europe which can benefit the whole world, as well as improve the lives of people across the continent.”
Between them the founders have founded four startups – Wise, Songkick, Teleport and Certific – and played a significant role in three companies, including Skype, Bigpoint and Topia. Companies in their collective existing portfolio include Deliveroo, Hopin, Pipedrive, Chorus, Uber, Zego and Bolt.
They say that as Plural, they have already invested in 14 companies including Feather, NFTport an NFT infrastructure company, energy storage company Field, metaverse company Ready Player Me and student banking challenger MOS. However, the scale of their investments in these companies was not revealed.
In a statement, Hinrikus, said: “We’re the investors we would have liked to have when we were building our own companies. Founding a company is a craft and the best way to learn that craft is to work alongside those who have done it before. ”
Hogarth added: “We call experienced founders ‘unemployables’, because once you’ve experienced the intense authorship that comes with creating something new it’s hard to work for anyone again. We created Plural to give unemployables a place to call home and put their entrepreneurial energy behind missions and founders they deeply believe in. ”
Hinrikus co-founded Wise in 2010. Wise completed the first-ever direct listing on the London market, which was also the biggest tech listing ever in the UK. Before co-founding Wise, Taavet was the 1st employee at Skype. Hogarth co-founded Songkick in 2007, sold to Warner Music Group in 2017 and won a $ 130m settlement against TicketMaster for anti competitive behavior. Helioui was CEO of Bigpoint from 2013 to 2017 of which he led the sale to Youzu. He was also one of the early backers of Uber, Deliveroo, Bolt Payments and Mos and helped found the Armenian National Interests Fund of which he presides the investment committee. Tamkivi co-founded Teleport, sold to Topia in 2017.
In an interview Hinrikus offered some fighting talk: “The only VCs are all spreadsheet junkies, bankers, consultants, they have no idea what it means to run a company, how to build a company. So that’s the problem we’re solving. We’re building an investment platform, where all the GPs are former founders. And we’re going to scale this to a large number, an irresistible army of ‘unemployables’, who will be your side when you’re building your company. ”
Hogarth added: “We’re trying to do something that is really a lot more of a peer-to-peer structure, where, the next ‘unemployable’ that joins has the same economic rights as Taavet and I, and ultimately has the same autonomy and freedom to make good investment decisions. So it’s an attempt to respect the fundamental independence of former founders and operators. We also think that that structure is the only way to scale, and this hasn’t really been done ever before by anyone. Ask any founder who’s going to raise money, it’s the entrepreneurs who are a few years ahead of them that they prefer. ”
Hogarth went on: “Because a lot of existing VCs who invest haven’t built companies, they tend to fixate on the story of this young person who stumbles into great market opportunity and builds a massive company, right? But actually, if you look at the really, really iconic companies for the last couple of decades, a huge percentage of them are started by second time founders, right? So Stripe, second time founder, Deep Mind, second time founder, Netflix, second time founder. It’s a really long list. And we think that at heart that’s because you can become a better founder. The longer you do it, the longer you invest in the craft of building companies, the better you get at it. So we think one way to take someone who wants to solve a really seriously hard problem, but hasn’t done it before, is to surround them with founders who have, so they get this like, you know, like, you know, ‘ speed up ‘on that skill development. ”
Hinrikus continued: “I’ve been on plenty of board meetings versus a well-respected venture capitalist. And he’s asking about the legal expenses last quarter. Yes, it’s probably an important question, but it’s not what makes the company better at an early stage. The last thing they need is an is someone obsessed with an Excel spreadsheet. ”
Both told me that Plural’s investment themes will be climate, health, the ‘future of governance’ (such as with DAOs) and ‘opportunity gap reduction’ (access to finance or education, more traditionally called Impact).
Hogarth concluded: “The dream for us would be to find the startup that’s going to build the first working scalable fusion reactor. It’s going to be an incredibly valuable business, and it’s going to have a lot of impact. So we’re sort of looking for that intersection where you have a tonne of impact on a really big important societal issue, like climate change, clean energy, but you also need to do it in a way that scales with capitalism. ”