The European venture capitalist's new fund focuses on southern Europe, signalling growing opportunities with larger companies moving into the region in recent years.

European venture capital firm VentureFriends has launched a new $112 million (£83 million) equity fund which focuses on southern Europe, the Middle East and Latin America.

The Greek-based early-stage firm has completed the first closing of its new fund at €90 million, aiming for a hard cap at €100 million ($112 million). It is the third fund for VentureFriends, which was launched in 2016 and is based in Marousi, Greece, with offices in London and Warsaw. The new fund is backed by family offices/HNW, founders and operators, the European Investment Fund and the Hellenic Development Bank of Investments.

“Raising a private-only fund in Greece in 2015 wasn’t easy. We have worked hard to prove the investment worthiness of the asset class in the region. We are now happy to have reached a point where we experience multi-hundred million exits as with Instashop, and companies reaching Unicorn status such as Blueground," George Dimopoulos, co-founder and partner at VentureFriends, said.

“We have steadily grown our presence and access to great entrepreneurs by providing relevant support and having a value-based and founder-friendly approach. We are excited about the first closing of our third fund that hopefully is a testament of the work we have done and we look forward to expanding the network of entrepreneurs we will support,” Apostolos Apostolakis, co-founder and partner, said.

The company invests in Seed and Series A start-ups which focus on B2C and B2B start-ups as well as proptech, fintech, marketplaces, traveltech and SaaS. Its portfolio includes proptech Blueground ($180 million Series C), grocery delivery marketplace Instashop in the Middle East (acquired by Delivery Hero), fintech B2B Belvo in Mexico ($43 million Series A), fintech Plum in London ($20 million Series A) and FBA roll-up Factory14 from Spain ($200 million Seed). More recently, VentureFriends invested in the UAE proptech/fintech Huspy, according to TechCrunch.

The economies of peripheral Southern Europe have been undergoing substantive structural adjustment which has depressed GDP growth over the past decade but opportunities are growing. Marathon Venture Capital in Athens raised a $47 million fund last year, while Bulgaria-based early-stage VC firm LAUNCHub Ventures announced completion of the second closing of its new venture fund with a target size of €70 million ($83.4 million) in June.

A number of global companies have made moves into the region in the last few years. Lombard Odier hired veteran wealth manager Stephen Kamp as chief operating officer to grow its southern Europe business in 2019. Seeing strong growth potential in Southern Europe, Swiss private bank EFG International built a franchise in Portugal, hiring Bernardo Meyrelles as country head for Portugal in 2019.  The bank said the move increased its footprint in Southern Europe, describing it as a key strategic market.

Southern Europe continues to struggle in the wake of the 2008 global crash. Falling unemployment and positive net migration are signs of recovery but the region continues to be dogged by high youth unemployment and a continuing brain drain. Prospects are better for the region's tourism industry as holidaymakers return after a disastrous 2020 caused by the pandemic.