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European Venture Capital Scene Sees Rise in Operator VCs
The landscape of venture capital in Europe is witnessing a notable increase in “operator VCs” – individuals who transitioned from successful founders to investment roles. While this trend is already prevalent in the U.S., where a majority of venture capitalists have prior experience as founders, Europe has traditionally seen a different profile, with most VCs originating from backgrounds in banking or finance. However, recent years have highlighted a shift with prominent European founders such as Taavet Hinrikus of Wise, Oscar Pierre of Glovo (Yellow Fund), and Christian Reber of Pitch, among others, now active in the venture capital space.
DIG Ventures Launches $100 Million Fund to Back B2B SaaS and AI Startups
Following the $6.5 billion acquisition of MuleSoft by Salesforce in 2018, founder Ross Mason established DIG Ventures. Initially conceived as a family office, DIG Ventures later evolved into a full-fledged venture capital firm. Mason partnered with Melissa Klinger, formerly the U.K. sales lead at MuleSoft, as co-founder and general partner. DIG Ventures has now announced the successful closing of its second fund, and first institutional fund, at $100 million. This new fund will focus on investments in early-stage (pre-seed and seed) B2B SaaS, Artificial Intelligence (AI), and cloud infrastructure startups, primarily across Europe, but also considering opportunities in Israel and the U.S.
Fund Backers and Strategic Partners
The $100 million fund is supported by a consortium of limited partners (LPs) including The Hillman Company, Granite Capital, Sofina, and Grove Street. The funding round also garnered participation from notable figures such as Datadog founder Olivier Pomel, alongside a number of MuleSoft executives, and other strategic investors.
Operator-Led Approach: Hands-on Support for Startups
DIG Ventures distinguishes itself as an operator-led fund, leveraging the practical experience of its team to provide hands-on support to portfolio companies. The fund emphasizes its capability to assist with crucial aspects of startup growth, such as go-to-market strategy and effective execution.
Experienced Team of Founders and Operators
In addition to Ross Mason and Melissa Klinger, the DIG Ventures team includes:
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- Rytis Vitkauskas: Founder of YPlan (acquired by Time Out) and former partner at Lightspeed Venture Partners.
- Scott Grimes: Co-founder of Stackin’ and Uproxx (acquired by Warner Music).
Portfolio Highlights: Investing in Innovative Technologies
DIG Ventures’ existing portfolio encompasses a range of promising companies, including:
- People.ai
- Karat
- Bubble
- ComplyAdvantage
- PlanetScale
- Rasa
- Taktile
- Rossum
- Flock
- Prophecy
Early Investments from the New Fund
The second fund is already actively deploying capital, with initial investments in companies such as:
- Dash0: An observability platform
- Nexos.ai: An AI orchestration platform
- PolyAPI: An enterprise middleware solution
Insights from DIG Ventures Founders
Mason: Europe’s Opportunity for Operator-Led Investing
“Following the MuleSoft experience, I recognized a significant opportunity to return to Europe and establish an operator-led fund,” Ross Mason told TechCrunch. “We successfully developed a strategy that allows us to identify and engage with founders more rapidly and at an earlier stage than many other funds.”
Klinger: Building Conversational Relationships with Founders
Melissa Klinger added, “Founders consistently tell us that our interactions feel like a peer-to-peer conversation because of our background at MuleSoft. We excel at taking highly technical products and crafting effective sales strategies. This ‘go-to-market’ expertise is often half the battle in the startup landscape.”
Klinger: Go-to-Market Expertise as a Key Differentiator
Klinger emphasized that while the fund is particularly interested in highly technical products, their deep understanding of “go-to-market” strategies is a core strength. “Navigating the journey from zero to initial traction, including packaging and effectively selling the product, is a skillset not every VC possesses – but it’s a core competency at DIG,” she stated.
The Future of AI and Enterprise Adoption
Mason: The Rise of Enterprise-Built AI
Mason anticipates a significant shift towards enterprises building their own AI solutions. “We are entering a new competitive era, particularly with Large Language Models (LLMs) being developed and operated within enterprise environments. The foundational layers of AI technology are still under development, despite vendor claims of maturity. A substantial portion of this technology will likely become packaged as Open Source, driven by enterprises seeking data control and security, rather than relying solely on cloud-based LLMs,” Mason explained.
Klinger: Europe’s Untapped AI Potential
Klinger believes Europe holds considerable, yet unrealized, potential in the field of AI. “Europe is a truly underestimated player in AI. We possess exceptional talent at a more competitive cost compared to the U.S. Much of the groundbreaking research originates from our universities. The primary challenge lies in securing the substantial capital required to support the growth of ambitious AI-driven ventures,” Klinger noted.
Operator VCs: A Growing Force in European Tech
In the U.S., former founders and operators, such as Peter Thiel, Paul Graham, and Marc Andreessen, have become highly influential figures in venture capital. Amidst global geopolitical uncertainties impacting economies, and with significant momentum building in the European early-stage startup ecosystem, the “operator VC” model may well solidify its position as a dominant force in the European venture capital market.