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Family offices and the ultra wealthy are piling into investments in European tech. It’s another sign that the continent is becoming more like Silicon Valley.


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Europe has minted a new generation of tech millions after some notable IPOs and acquisitions. These wealthy founders are now re-investing their earnings back into the continent’s tech ecosystem.
Private wealth has doubled from $33 trillion in 2008 to $70 trillion in 2018 with some 92% of respondents saying they now invest in venture capital, according to a survey by London-based fund Talis Capital.
Money committed to VC now outstrips real estate among ultra-high net worth individuals as they hunt for yield outside of traditional assets.
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The young and ultra-wealthy want to pile their billions into tech startups.

Research conducted by Dealroom.co for London-based fund Talis Capital has found that increasing numbers of family offices and ultra-high net worth individuals are committing larger proportions of their finances towards European tech, via venture capital funds.

It’s a sign that the continent’s ecosystem is becoming more like Silicon Valley where millionaires and tech entrepreneurs are major investors in new startup ventures.

Where previously Amazon founder Jeff Bezos invested in Uber and Twitter, now European tech and other business founders may be well-placed to fuel the next big thing.

In the past decade, private wealth has doubled from $33 trillion in 2008 to $70 trillion in 2018 with some 92% of respondents saying they now invest in venture capital, according to a survey by Talis Capital.

Talis Capital is a London-based venture capital fund which invests on behalf of wealthy private individuals

This is down to a few reasons. One is that some traditional types of investment don’t offer the same attractive returns that they used to, such as property. Investors seeking higher returns need to look at riskier models, such as venture capital.

“It’s a product of a hunt for yield in private markets and investors turning away from traditional assets,” Vasile Foca, cofounder and managing partner at Talis Capital, said in an interview with Business Insider.

Another reason is that successful exits by European entrepreneurs have created new millionaires who want to put money back into the ecosystem. A notable example in Europe is Skype cofounder Niklas Zennstrom, who set up venture capital firm Atomico.

iZettle, and Adyen are just some of the major European exits in recent years while individual entrepreneurs such as TransferWise cofounder Taavet Hinrikus have been notable investors across a number of sectors.

These newly wealthy entrepreneurs don’t account for all ultra-high net worth individuals investing in venture capital, but Talis believes they account for some of the shift.

Over the past five years, the number of individuals and families using private wealth to directly participate in VC rounds in Europe has grown five-fold to a record-breaking $5 billion. According to the research, 2019 could yet beat that record.

In fact, Dealroom calculates that 20% of new venture capital funds raised in Europe came from private limited partners and that 18% of the $28 billion investment in European startups in 2018 came directly from private wealth.

Young, wealthy investors want to back tech

A survey of investors in the US with more …read more

Source:: Business Insider

      

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