@GeeknRolla: Big-league VCs backing Europe's digital start-up scene

It was hard enough to attract the attention and cash of VCs before the econony almost crashed into oblivion, so it’s a really tall order for start-ups to stand out from the crowd and get funded these days.

So what state is the UK/Europe investment scene in right now? A GeeknRolla panel on investment trends was largely positive about the possibilities – even cautiously optimistic – that a good number of European deals would be hammered out this year and beyond.

Mattias Ljungman from Atomico Ventures tackled the perennial question head-on: “I think it’s right to say Europe is still an emerging market,” he says. “But it’s stronger now than it’s ever been… I would say all across Europe there are some great companies.”

He says the the Euro scene is getting more “federated” – spreading out across the continent: “If you look at Skype, Bebo, MySQL and smaller ones like Last.fm and Playfish… these are from all over the place. So it’s different (to the US) but it’s exciting. Michael Jackson, from Mangrove Capital agreed there are “plenty of opportunities in Europe”.

Robin Klein, serial investor and chairman of The Accelerator Group, urged entrepreneurs to be realistic about what they were asking for: “I’m a big support of the VC industry in Europe… but you’ve got to target your request to the levels of capital that exist.” Companies are building with very little capital, he says, which can only make them more attractive to investors.

Klein says it’s not just about which sector is hot, it’s about “investing in people… What’s exciting to me is a room of people like this with the excitement and energy to change the world.” But if you had to press him on which vertical investors are looking at, Klein says: “We like data, a lot; the retail space, e-commerce and SAS.”

Apax Partners founder Alan Patricof, something of a legend in VC and private equity circles, says a meeting like GeeknRolla couldn’t have happened in the UK 30 years ago. And he recalls that a start-up event in the gung-ho late 1990s “would have been full-on insanity – with crazy ideas and ridiculous valuations. The whole atmosphere was crazy. I can tell from this audience that people have learend from those times.”

However, he adds a note of caution: “What I do worry about is signs that the insanity is coming back at some level…”

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