Lightspeed Venture Partners has hired Paul Murphy and Ross Mason to head up its push into Europe as Silicon Valley VCs step up the hunt for deals on the continent. The move from the Menlo Park-based VC fund—which has backed Snapchat, Affirm and Epic Games—to put down roots in London comes as funding raising and the valuation of European startups have skyrocketed in the last year.
Investors have plowed over $50 billion into European startups this year alone with the valuation of the continent’s most valuable startup Klarna leaping to $45.6 billion in June from $10 billion in September. That shift came as investors stopped viewing Europe as an arbitrage play, with valuations typically lower than American rivals, and saw the potential for British and European startups to become global winners, says Murphy.
“This is Europe’s moment. There are so many amazing companies being built right now by incredible founders and everything is primed now,” says Murphy. “The question was not whether we should enter Europe, but should we go big.”
A generation of European founders who have built experience at, or sold a business, to a Silicon Valley startup, talented developers, and a huge, albeit, fragmented market was now driving the surge in valuation, says Murphy.
Murphy led investments in Hopin, the events platform that skyrocketed to a $7.5 billion valuation just two years after its launch; e-scooter startup Tier Mobility and videogame developer Klang, after joining London-based early-stage investor Northzone in 2018. He also cofounded the video games studio The Dots, which was sold to Take Two Interactive for $192 million in August 2020, and GIF library Giphy, which was bought by Facebook in a $400 million deal in May 2020. That deal now faces being unwound by the U.K.’s antitrust regulator.
Murphy will also be joined by Mason, who will be based out of Geneva. The British entrepreneur had been backed by Lightspeed at his cloud data startup MuleSoft which was acquired by Salesforce in a $6.5 billion deal in March 2020. Mason will continue investing in cloud, software as a service (SaaS), and fintech startups like ComplyAdvantage through his Dig Ventures seed fund, and advising Lightspeed.
“We now have had so many unicorn success stories in Europe. There is more of that talent to run tech companies at scale and that’s helping fuel the next generation of companies be more successful, more quickly,” says Mason, Lightspeed venture partner. “When I told Ravi [Mhatre, Lightspeed managing director] I’m moving back to Europe he said ‘let’s find a way to work together’ and that’s something that’s typical of Lightspeed…they are very collaborative.”
The two new hires fit with the dual focus of Lightspeed. Its founding partners’ track record is anchored in a string of billion-dollar exits from enterprise and infrastructure plays like Nimble Storage, Nutanix and AppDynamics, while a more recent crop of partners like Midas List investor Jeremy Liew, James Mi, and Nicole Quinn, have invested in fast-growing consumer startups like Snapchat, Gwyneth Paltrow’s Goop, and meditation app Calm.
“Paul is an exceptional investor and I think he deeply understands what an exceptional founder is, and builds the trust with those founders,” says Nicole Quinn, Lightspeed general partner. “Ross moved from the U.K. to Switzerland to really focus on European investing and advising other companies and is deeply ingrained in the continental European ecosystem.”
Lightspeed’s plan to open a London office has been well trailed, and it has had a partner, Rytis Vitkauskas, based in the British capital since September 2019. The VC fund has invested over $500 million in European startups since 2007 with second-hand clothes marketplace Vinted, HR software unicorn Personio, and grocery delivery startup Zapp as standouts in its portfolio.
“We have always made the decision if we go into a region, then we double down, we triple down and that’s exactly what we plan to do in Europe,” says Quinn, who works from the California office, while the fund also has teams in China, Israel, India and Singapore.
Lightspeed’s push into Europe tracks with moves from rival Valley heavyweight Sequoia to expand its footprint in the U.K. and Europe. The Menlo Park-based fund hired Luciana Lixandru from Accel Partners in March 2020 to head up a new London office.
That push has come amid a wall of capital from Silicon Valley, and Wall Street, firms landing in Europe over the last year. That potential threatens some traditional European investors who can’t boast of the same network of big-name exits and international ties that can help startups expand into the U.S. or Asia. “We would be crazy to try and squeeze out the amazing seed funds here. It’s more us coming to the table to say we can add unique value—perhaps you can make space for us,” says Murphy.