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Green shoots are appearing for Europe’s technology start-ups after a two-year investment drought, as dealmaking picks up among early-stage companies and venture capitalists raise new funds.

Creandum, an early backer of Spotify, Klarna and Depop, unveiled a €500mn fund on Monday, becoming the latest European-focused private tech investor to secure fresh capital for start-ups this year.

That fundraising follows similar-sized deals, including Accel Europe, which launched a $650mn fund last month, and Plural, a London- and Tallinn-based firm targeting “deep tech” start-ups that has raised €500mn. Plural added another €100mn to its fund last month after January’s initial close.

Creandum’s fund was raised “in record time”, according to general partner Carl Fritjofsson. “There is a dramatic change in the sentiment, appetite and activity across the industry,” he said.

After the Covid-19 pandemic-driven frenzy of tech investment came to a sudden halt due to inflation, rising interest rates and geopolitical tensions, European start-ups were forced to slash costs as VC investment dried up. Some large US tech investors, including Tiger Global and Coatue, pulled back on European dealmaking.

But VCs say the market has started to change in the first few months of 2024, as a new craze for artificial intelligence start-ups couples with a strong rally in Big Tech valuations on Wall Street.

“We haven’t fully washed through the overhang from the peak years but the green shoots are all around us,” said Tom Wehmeier, who runs the insights team at Atomico, one of Europe’s largest VC companies. “We are moving beyond the recovery phase and back into a period of growth.”

Wehmeier predicts that, after the decline in 2023, private tech investment into European start-ups will return to growth this year. “The market is more active at any point than we’ve seen before 2021,” he said, pointing to three successive quarters of increased investment in “Series B” deals.

“From the data we see and from our work every day, we are genuinely very excited about 2024,” said Sabina Wizander, a Creandum partner based in Stockholm. “More quality companies are daring to go out [to raise money] because the fundraising environment is more predictable.”

Many start-ups were forced to cut costs and focus on profitability as the market turned in 2022. Those that survived the funding freeze are now more sustainable, investors say, while revenue growth has generally begun to accelerate.

Even some Silicon Valley investors have returned to Europe, with Andreessen Horowitz and IVP opening offices in London in the past few months.

Between 2007 and 2021, Creandum made back almost seven times what it invested in companies, after selling those stakes. One in six companies it has invested in has hit a valuation of more than $1bn.

Jon Biggs, a partner at one of Creandum’s investors, Top Tier, said the figures demonstrated that European venture capital groups could show returns to match those of their Silicon Valley peers — a question that has long hung over investors in the region. “The firm is comfortably at the top table of global VCs,” he said.

Not every European fund has been able to raise funds so easily. London-based Atomico is in the final stages of its largest ever capital raise, targeting as much as $1.35bn across its venture and growth funds, according to people familiar with the matter. But, while it expects to complete the funding in the coming months, the process has taken more than a year.

That reflects both the size of the deal and continued investor caution around funds directed at later-stage companies at a time when there have been few successful initial public offerings, these people said. Atomico declined to comment on its fundraising plans.

As repairs are still being made to fix the broken water mains in Atlanta, the City of Atlanta Department of Watershed Management said there will be water interruptions in a couple of places.

Officials say “essential repairs” will be conducted on West Peachtree Street and 11th Street on Monday and it will cause water interruptions.

We’ll take you to the repair work and where it stands, LIVE on Channel 2 Action News This Morning.

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Atlanta Watershed said as part of the repairs, crews will shut off 36-inch and 30-inch water mains, resulting in a “temporary interruption of water service.”

The streets affected by the repairs include 11th Street to W. Peachtree Street to Peachtree Street, and W. Peachtree Street from 10th Street to 12th Street.

The repairs began at 1:00 a.m.

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Traffic control measures and signs will be in place to guide drivers around the work zone.

Atlanta Watershed advises that drivers and pedestrians should avoid the area if possible.

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IN RELATED NEWS:

China’s Ministry of State Security said MI6, Britain’s spy agency, recruited “employees of a central national agency” in a statement on Monday morning.

The MSS said that a man surnamed Wang and his wife with the last name Zhou were recruited by MI6 to “collect information for the British”. They allege Wang was targeted by MI6 shortly after arriving in the UK in 2015 as part of a “China-UK exchange programme”.

“MI6 provided Wang with professional spy training, directing him to return home and collect important intelligence related to China,” the ministry said, adding that it was “legally investigating the couple”.