Mangrove raises $170M for its new fund to invest in Europe and Israeli startups

Luxembourg-based Mangrove Capital Partners, one of Europe’s leading early-stage venture capital firms, has raised $170 million for its latest fund.

Mangrove V will be used to invest across Europe and Israel. The amount matches that of its previous funds, and was completed inside two months with 90 percent coming from returning investors, said the firm. Mangrove has been one of Europe’s most successful VCs, backing hits such as Skype (sold twice and now part of Microsoft) and (which is now publicly traded). So far the firm has invested in more than 130 companies since 2000.

Mark Tluszcz, co-founder and CEO, said in a statement: “We like to take big bets very early and support our best portfolio companies through multiple rounds of financing to build material stakes. We prefer to invest in unproven or unusual technologies rather than chase the latest fad.”

Compared to much bigger fund raises from other European VCs in the last year or so, including EQT Ventures (over €500 million), Atomico Ventures (latest fund: $765 million) and Index Ventures (latest fund: $1.25 billion), $170 million seems relatively modest. Mangrove said it opted for a smaller fund in “in order to maximise the performance… the data shows that larger funds have diminishing returns,” the company noted.

The smaller fund size means smaller investments, BUT potentially bigger returns IF the startup does well. Mangrove put $8 million into, and that resulted in a $550 million exit when it became the largest tech IPO to come out of Israel. Mangrove is also famous for being the first investor in Skype, turning a $2 million investment into $200 million.

Mangrove now has more than $1 billion under management and a team of 12, which includes partners in Berlin and Tel Aviv. Its investments include WalkMe, Lesara, JobToday, FreedomPOP, Wallapop, Kang and Happify. Partner Michael Jackson, who was previously COO at Skype, is on the board of AXA and Blockchain.

Mangrove also is among the guard that is pushing for more evolution in investing. The firm recently launched Europe’s Female Founders, a series of meetups across various European cities, to help foster a more gender-balanced founder ecosystem. They are not alone. Other VCs have launched similar initiatives, including LocalGlobe and Accel Partners in London.