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Investment without borders: what the stats from Earlybird's latest fund mean for Berlin Written by Ciaran O'Leary on 12. March 2013

night lights NASA

night lights NASA

Earlybird Venture Capital partner Ciaran O’Leary explains why country lines are so pásse, using fresh stats from his firm’s latest fund, including some yet-to-be-announced investments. This post originally appeared on his blog.

We’ve been investing out of our new fund for a year now. One thing that completely blows me away is that any and all international borders are now truly out the window. In every way you can imagine, the tech community is living in the new Europe – actually, never mind that – the new world…

To many of you this is news from the Church of the Bleeding Obvious. Nonetheless I wanted to share some data with you, based on our first investments from our new fund over the last 12 months. We’ve only announced three investments but have actually done more (around 10) that we’ll announce soon, so I hope the data is somewhat indicative already.

Just as a scene-setter: We’re most active in Berlin but invest across continental Europe; we like to back European companies with global ambitions. Let’s see what the data says.

Here’s the split of the dominating nationality within our founding teams:

  • German: 35%
  • US: 29%
  • Other: 36% (France, Sweden, Austria and Iran)

The large German portion and other European countries would be pretty much as expected. But around a third from the US? This is new and it’s good. I am seeing a huge influx of US talent and they are bringing a healthy new element to our entrepreneurial gene pool in Europe. We’re not only seeing this with founders, but also plenty of experienced US C-level folks are moving in.

I then looked at if there is a match between the nationality of the founder and where the company is based:

  • Yes: 44%
  • No: 56%

So the majority of founders are building a company in some place they are not from. They are making choices based on where they think the best place is to build their companies. We see this most in Berlin, where barely anyone is from Germany. But it’s also happening elsewhere.

We’re all seeing capital becoming more mobile, so I also looked at syndicate structures:

  • National syndicates: 22%
  • International syndicates: 78%

What’s really interesting here is that this applies across all stages – from seed to growth; we’re seeing entrepreneurs really having more choice, and that they can match capital to their company and not to their geography. Again, a super healthy thing.

The next data set is the most important to me. We like to think that Europe is now systematically creating companies that can become global leaders in their space and are not just addressing regional markets.

So here’s a split of our companies’ activities when we invested:

  • National: 11% (addressing just one market)
  • International: 22% (addressing several markets)
  • Global: 66% (addressing dozens of markets across all continents)

No comment needed.

I expect these numbers to shift even more towards the global/international part of the scale going forward. I love it. What are you seeing?

Image credit:
lights from space: flickr user woodleywonderworks


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