Creandum, the Sweden-founded venture capital firm behind Spotify, Lovable and Black Forest Labs, says a San Francisco base is necessary to win deals in Europe. Founder Staffan Helgesson made the case on the Tech.eu podcast.
The comments follow Creandum's announcement last week that it had closed Fund VIII, its largest fund to date, at $750m. That is up from Fund VII, which stood at €500m ($560m). The firm also opened its first San Francisco office, although it has had a presence in the city since 2012. Its other portfolio companies include Klarna and UK chip startup Olix.
"We need to be in San Francisco to win in Europe. It's because we can be helpful to our portfolio," Helgesson said. He argued that the US footprint makes Creandum more attractive to founders and a better European investor, because the team can see developments in both markets. It can run due diligence on both sides of the Atlantic and engage with founders as they raise capital in each region.
Helgesson spoke as Sequoia said it was closing its London office. Creandum operates from Stockholm, Berlin, London and San Francisco. He acknowledged that a distributed set-up brings challenges, but said execution matters more than structure. "I don't think it's the model that is most important; it is how you execute on the model. And we have learnt how to execute a multi-hub strategy," he said.
On investment approach, Helgesson said: "We will never lower the bar on entrepreneur quality simply to invest in an area that we think is exciting." Creandum says one in six of its early-stage investments is valued at $1bn or more. Asked whether it could sustain that rate with the new fund, he called venture a "very hard" industry and said a firm is "just a bad fund away from not being relevant anymore."
