1Mby1M Virtual Accelerator Investor Forum: With Alastair Mitchell of EQT Ventures (Part 3)

Sramana Mitra: Can you look at the 2017 deal flow, and talk about where are the pockets where there are good companies in Europe right now? Is it France? Is it Portugal? Is it Stockholm? Is it Spain? Where are you seeing the really interesting activity?

Alastair Mitchell: By deal flow, London still represents over 50% of deals in Europe. But there are two big buts. That is changing rapidly because of Brexit. A lot of those companies were actually European companies that moved to London and are now staying where they started.

It’s causing a huge boom for Paris, Lisbon, Berlin, less for the Nordic, but also for other parts of Europe. Some of the  best companies that we are seeing now are  coming out of other parts of Europe. That’s the other change which is that now we’re seeing startups coming from all over the place.

Some of the fastest growing companies are coming out of Turkey. Berlin has always been strong, but Munich’s growing faster. Paris has dramatically changed in 2017. Paris is the story of 2017 in Europe.

Sramana Mitra: Paris is the story of 2017. I actually met Macron before he’d started the campaign. He came here and I was invited to meet with him for a one-on-one meeting, and I didn’t know he was going to run for President at that point.

Alastair Mitchell: What he has done now is create the biggest startup accelerator in Europe. Estonia has always been strong. There are some amazing companies coming out of there because access to capital is easier and access to customers is so much easier because we’re all so much more global and travel more. You’ve seen companies pop up and then grow and expand very quickly, which is super exciting.

Sramana Mitra: So talk to me a bit about how you perceive the seed, angel, pre-series A ecosystem in Europe? What are the trends that you see in the investor pool that feeds into your deal flow?

Alastair Mitchell: There has been an amazing rise in the quality and number of angels partly because of tax breaks. In the UK, you’ve the EIS scheme which allows you to get a 70% break on tax from investment and not get any capital gains on it. The quality of Angels has gone up dramatically because there’s a bunch of great exits, and these guys are now funneling money back into Europe in a way that you have seen in the Valley in the last 20 years.

Whether it’s the Rocket Internet School coming out of Berlin, whether it’s all of the gaming companies and food companies coming out of Germany and Sweden or the FinTech companies and the deep tech companies coming out of London, the biggest VC deal in the world was done in London. There are some great angels and early stage investments going on.

The other thing is YC has been a huge powerhouse in in the Valley. But now you’re seeing Seedcamp in London. You’re also seeing things like Entrepreneurs First. It’s a very tech-focused incubator doing very well and expanding to New York. I think you’re seeing very strong quality.

The thing that is still getting there is, valuations are still lower, which you could see as good or bad. I see it as a bad thing just because I think it still means people are more cautious and putting less money. That still has to go a little bit. People still think a little bit too small. I’d love to see great ambitions on behalf of the Angels to encourage their founders to really blow it up and go for big risks.

Compared to when I started Huddle 10 years ago, it had dramatically changed since 5 years ago. We’re on a great path. I’d just encourage everyone to still think bigger.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Alastair Mitchell of EQT Ventures
1 2 3 4