Plural founders of fast-growing tech companies: Are they overachieving? A conversation with Hinrikus, Heloui, and Tamkivi
Plural’s founders—who have raised €250 million ($247 million at today’s exchange rate) with the aim of leading early-stage rounds between €1 million and €10 million—are something of an overachieving lot, bringing with them a wealth of experience in the art of the startup. They comprise Hinrikus, cofounder and CEO of Wise, Songkick founder Ian Hogarth, angel investor Khaled Heloui, and Teleport founder Sten Tamkivi. With their track records in leading such notable successes (the group has also played significant roles in Skype, Bigpoint, and Topia), they now intend to offer their entrepreneurial expertise—as well as capital—to their portfolio of companies.
Only 8 percent of European investors have invested in a fast-growing tech company. Hinrikus explains. “We are decades behind the US. Founders have a brain configured for what life for entrepreneurs is like. Many investors are asking why legal costs are higher than a year ago. That does not make or break a company, but ex-owners can look at things that matter.
“We’re completely agnostic on sectors—but we all gravitate to harder things to resolve,” he explains. Konrad is fascinated by artificial intelligence, Sten is interested in Web3 and I am climate curious. Female and minority founders make up 29 and 36 percent of our portfolio. We’re fully aware that the world needs a lot more diversity, but there’s nothing in our term sheets yet. That sounds more like PR than a business decision.”
The Crowd is the Answer: Why Black Startups Have a Chance, but Why They Are Under-Funded and Why They Want to Build a Better Europe
The difficult financial headwinds have made fundraising tougher, although there’s plenty of capital looking for deployment. According to Crunchbase data, investment in European startups dropped from €29 billion in the first quarter of 2022 to €14 billion in the second quarter—although VC funds are still raising money at the same rate, with the UK and Germany leading the major players.
“Thinking in national terms isn’t enough,” Hinrikus insists. “We’re looking to help Europe as a whole accelerate its ecosystem development. Thanks to the work of theSkype founders,Estonia got really lucky. Now Estonia has 10 unicorns for a 1.3 million population. I don’t love the word unicorn, but I would love to accelerate Europe in the same way.”
In 2023, VCs and investors in the tech industry will begin to actively invest in the “social” part of ESG, as they will realize they risk becoming obsolete otherwise. A 2020 report from Morgan Stanley found that more than half of venture capital firms think the BLM movement has an affect on their investment strategy, and 42% thought finding multicultural investment opportunities was a top priority for their firm. The tech industry has grown more candid and honest in its approach to race and class, as a few years ago many powerful players weren’t even asked questions about how they planned to be more equitable. In 2023, these conversations will become more widespread, and compel a greater number of powerful players to act.
It’s not enough for there to be more Black hires at big institutions, or one-off mentorship schemes for under-represented groups to get into the tech industry. My cofounder of Black Seed, Cyril Lutterodt, says that Black founders are over-mentored, but under-funded. Data from Crunchbase shows that Black-founded startups received record funding in 2021, with over $1 billion invested in the first quarter of 2021 alone. In the second quarter of 1992, that dropped to $324 million. In the first half of the year black entrepreneurs received 1.2 percent of the total investment in US startup companies.
The personal approach is crucial to giving diverse founders the chance to present their ideas in front of the right people. In a few years, investors and venture capitalist will realize that they need to look further for fresh perspectives. Powerful people who are connected to each other will encourage others to take a risk on someone with a different perspective, or on a completely different social background. We use the name recognition and built-in network of an established fund or firm to lure in more interest to lesser known ventures and individuals during collaborative events as part of Black Seed. This can lead to unlikely collaborations and new ventures that draw on the expertise of established players along with a fresh perspective—consider Google’s Black Founders Fund, which is based in the US but a similar example of the dynamic above.