Target Global, the Berlin-headquartered VC, opens London office

Target Global, the Berlin-headquartered VC that has backed the likes of Auto1, Delivery Hero, Omio (formerly GoEuro) and Wefox, is opening up its first U.K. office — undeterred by Brexit uncertainty.

The U.K. expansion, which adds to Target’s Berlin, Tel Aviv and Moscow offices, was overseen by General Partner Yaron Valler. Two of the firm’s partners will be based in London. They are Malin Holmberg and Gilad Engel who will be supported by Venture Partner Rytis Vitkauskas along with back office and finance staff.

By expanding its reach to London, Target Global says it will continue to back “European innovations with solutions to global problems,” with the broader aim of connecting the various and often disparate hubs within the European ecosystem. With regards to the U.K. specifically, Target Global Partner General Partner Alex Frolov cites “engineering, deep tech and fintech” as particular strengths and areas the VC plans to invest.

To that end, Target Global currently has €700 million under management across Europe, investing primarily in SaaS, marketplaces, fintech, insurtech and mobility. The firm says it takes a “multi-stage approach” to the businesses it backs, following three active investment strategies: early-stage, growth and a dedicated mobility fund — which recently backed Delivery Hero and Team Europe founder Lukasz Gadowski’s scooter startup Flash.

Below follows an email Q&A with Yaron Valler, General Partner at Target Global, where we discuss the move to the U.K., the firm’s investment thesis, other European hubs, and — of course — Brexit.

TC: What is the significance of Target Global opening a London office and why now?

YV: London and the broader U.K. is home to some of the world’s most innovative, fastest growing businesses. The country has an excellent web of innovation, particularly in engineering, AI, deep tech and FinTech, all of which are key industries for us. We already have successful ventures in the country, and we are looking to grow our presence here – there is no better time than now for this. We see a huge opportunity for us to step forward into a market that continues to consistently produce global success stories.

Our U.K. expansion is a natural step for us, in our pan-European approach. We truly believe in a pan-European ecosystem, as we are convinced that there should be no borders for innovation and growth. Target Global has identified the core strengths of each tech hub across Europe and we’re working to connect entrepreneurs with capital across those regions and beyond. Europe should build on its core asset, one of them being its diversity and the different assets of different hubs. A European ecosystem is, after all, only as good as the connections it fosters.

TC: How does Target Global view Brexit and was it a factor in your decision?

YV: Our dedication to connecting the key hubs in the European startup ecosystem means that the U.K. has always been set in our sights. Brexit or no Brexit, London will always be one of the world’s most innovative high-growth tech hubs. Of course it might have an impact on the economy over the next few years, but that does not mean opportunities will vanish. The U.K. is still producing entrepreneurs and startups that can serve the EU-wide market and they are needed now more than ever before, regardless of whether the U.K. is in the European Union.

TC: Which U.K. startups have you previously backed?

YV: We already have successful ventures in the country, e.g. our portfolio companies Sharegain (FinTech) and Parkjockey (PropTech).

TC: What should U.K. startups expect from Target Global and what stage and sectors will you be targeting in the U.K.?

YV: In the U.K. we are following our approach of investing in startups that are disrupting quintessentially European industries – retail, financial services, food, mobility, healthcare, manufacturing – by bringing technology such as SaaS, marketplace and AI to these trillion Euro industries.
We will invest out of all our existing Funds, our Early Stage Fund as well as our Growth Funds, as well as our Mobility 2.0 Fund. With our multi-fund approach, we offer the potential to move between our different funds as the company grows.

Our strong presence within Europe’s key startup hubs has proved invaluable to our entrepreneurs, providing them with access to talent, insights and exit opportunities across multiple markets. No doubt, these links to the broader European ecosystem will be beneficial to British founders, too. We are extremely committed to the success of our entrepreneurs. We can make decisions quickly and can be nimble and flexible. That’s because we understand growth metrics vs. being solely focused on financial KPIs. We also understand technology and the market drivers in the markets in which startups operate.

Our LPs and our industry-specific advisors are a tremendous force multiplier for our companies. They provide an invaluable combination of ‘insider’ industry expertise on the old/real industries being disrupted, as well as pilot, BD, and sales opportunities.

TC: Lastly, you talk about “connecting the key European ecosystems,” while playing to each of their respective strengths. Which are the key hubs from Target Global’s point of view and what are each of their strengths?

YV: With Berlin, London and Tel Aviv we have offices in the key European hubs, Berlin was an investment destination for us long before it was added to this list, and we have been backing some of the iconic companies in the ecosystem. Of course, Paris, Stockholm and the Nordics in general are also a highly relevant European hubs.

In addition to the existing key hubs we see interesting ecosystems emerging, e.g. Spain and CEE. We have made a number of investments in Spain already and we are excited by the opportunities the ecosystem has to offer. We see that Spain is on the cusp of becoming a big ecosystem, with Madrid and Barcelona as two big hubs in one country, and some smaller ones emerging. The Spanish ecosystem has seen some companies emerging as category leaders e.g. our portfolio company Travelperk, and an ecosystem is developing in context of these leading companies.

We are also very happy with our investments in CEE, e.g. in the Polish SaaS companies docplanner and Shedul, two portfolio companies in Austria. In CEE we see strong tech talent, very driven entrepreneurs, an infrastructure that is beneficial for startups and a general openness to innovation – and we see a strong pipeline from that region.