German Venture capitalist Klaus Hommels, who is known for having the midas touch when it comes to investing in startups, is putting his dollars and capital gathering talent to work in the European tech sector.
Hommels successes to date include Spotify, the music streaming service, Swedish online payments company Klarna, Facebook, Airbnb, Algomi – the London based social network for bond trading, and American on-line shaving company Harry’s.
This week Hommel announced through his venture capital firm, Lakestar, that he will be setting up a new fund worth $398 million, aimed at European tech startups, but also a few “American fledgling companies looking to expand globally.”
“Technology has become integral to how we live,”he said. “We won’t be afraid to back startups with high valuations if we can accelerate their growth.”
The only “failure Hommels has had was his investing into Candy Crush maker King Digital. Although not losing money on the deal, he missed out on $1 billion as he sold his shares before the company went public.
Experts say that Hommels switch to Europe was perhaps the strongest indicator to date that investors who have taken a renewed interest in European venture capital, with private equity firms, venture capitalists,and other investors, have made the right move.
In the second quarter of 2015, European venture capital firms have raised $2.44 billion, 63 percent more than for the corresponding time last year.
Some experts are saying the interest in Europe could result in a “European tech bubble” but Hommel said he was not worried. He said unlike the dotcom era, where technology was confined to a small group of “web entrepreneurs” , the use of cloud computing, and smartphones, and “other trends” was spread into general public use.
“Good entrepreneurs can always distinguish between smart and easy money,” said Hommel. “Even if the bubble bursts, that’s not necessarily a bad thing.”