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Target Global, the Berlin-based venture capital firm that has supported companies such as Auto1, Delivery Hero, Omio (formerly GoEuro) and Wefox, opens its first office in the UK, undeterred by the uncertainties of Brexit.
Expansion in the UK, in addition to Target's offices in Berlin, Tel Aviv and Moscow, was overseen by General Partner Yaron Valler. Two of the company's partners will be based in London. It is Malin Holmberg and Gilad Engel, who will be supported by venture capital partner Rytis Vitkauskas, as well as administrative and financial staff.
By expanding its reach in London, Target Global will continue to support "European innovations in bringing solutions to global problems", with the broader goal of linking the various and often disparate poles of the European eco-system. With particular regard to the UK, Target Global Partner General Partner Alex Frolov cites "engineering, advanced technology and financial technology" as particular strengths and areas in which VC intends to invest.
To this end, Target Global currently manages € 700 million in Europe and invests primarily in SaaS, marketplaces, fintech, insurtech and mobility. The company claims to adopt a "multi-step approach" for the businesses it supports, following three active investment strategies: early growth, growth and dedicated mobility funds – which has just supported Flash, the Delivery startup. Hero and Team Europe, founder of Lukasz Gadowski.
Below you will find a question-and-answer email with Yaron Valler, Senior Partner of Target Global, where we discuss the UK installation, the company's investment thesis, other European hubs, and of course, Brexit.
TC: How important is the opening of an office in London by Target Global and why now?
YV: London and the United Kingdom are among the most innovative and fastest growing companies in the world. The country has an excellent network of innovations, particularly in the fields of engineering, artificial intelligence, deep technologies and financial technologies, all of which are key industries for us. We already have successful projects in the country and we are looking to increase our presence here. There is no better time than this one at the moment. We see a huge opportunity for us to move forward in a market that continues to produce global success stories.
Our expansion in the UK is a natural step for us in our pan-European approach. We truly believe in a pan-European ecosystem because we are convinced that there should be no borders for innovation and growth. Target Global has identified the main strengths of each technology hub in Europe and we are working to connect entrepreneurs with capital in these regions and beyond. Europe needs to build on its core strength, including the diversity and different strengths of different hubs. After all, a European ecosystem is only as good as the links it promotes.
TC: How does Target Global perceive Brexit and was it a factor in your decision?
YV: Our willingness to connect the main hubs of the European start-up ecosystem means that the UK has always been within our reach. Brexit or no Brexit, London will always be one of the world's most innovative, high-growth technology hubs. Of course, this could have an impact on the economy over the next few years, but that does not mean that opportunities will disappear. The UK still produces entrepreneurs and startups that can serve the European market and they are needed more than ever before, whether the UK is in the EU or not.
TC: Which UK startups have you already saved?
YV: We already have successful projects in the country, for example our holding companies Sharegain (FinTech) and Parkjockey (PropTech).
TC: What UK startups should expect from Target Global and what milestones and sectors will you target in the UK?
YV: In the UK, we are following our approach of investing in startups that essentially disrupt European industries – retail, financial services, food, mobility, healthcare, manufacturing – by bringing technologies such as SaaS, the market and the AI to these billions of industries.
We will invest in all our existing funds, our Early Development Fund, our Growth Funds and our Mobility 2.0 Fund. With our multi-fund approach, we offer the possibility of changing funds as the business grows.
Our strong presence in the key start-up centers in Europe has proved invaluable to our entrepreneurs, providing them with access to talent, knowledge and exit opportunities in many markets. There is no doubt that these links with the wider European ecosystem will also benefit the British founders. We are extremely committed to the success of our entrepreneurs. We can make decisions quickly and can be agile and flexible. This is because we understand growth indicators rather than just focusing on financial key performance indicators. We also understand technology and market drivers in the markets in which startups operate.
Our sponsors and sector advisors are a tremendous force multiplier for our companies. They offer an invaluable combination of industry-led "industry" expertise on troubled old / real industries, as well as pilot opportunities, comic book development and sales.
TC: Finally, you talk about "connecting the main European ecosystems" while playing on each of their respective strengths. What are the key areas from Target Global's point of view and what are their strengths?
YV: With Berlin, London and Tel Aviv, we have offices in the main European hubs. Berlin was a destination for our investments long before it was added to this list and we supported some of the iconic companies in the ecosystem. Of course, Paris, Stockholm and the Nordic countries in general also constitute a very important European pole.
In addition to the existing key poles, we are seeing interesting ecosystems emerge, for example. Spain and EEC. We have already made many investments in Spain and we are excited about the opportunities offered by the ecosystem. We find that Spain is about to become a large ecosystem, Madrid and Barcelona constituting two major hubs in a country and some smaller ones being born. The Spanish ecosystem has seen some companies become leaders in the category, for example. our portfolio company Travelperk, and an ecosystem is growing in the context of these leading companies.
We are also very satisfied with our investments in the CEECs, for example in the Polish companies SaaS, docplanner and Shedul, two holding companies in Austria. In Central and Eastern European countries, we are seeing a strong technological talent, highly motivated entrepreneurs, an infrastructure that is beneficial for new businesses and a general openness to innovation – and we expect a strong distribution network in this region.
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