Accel raises $650mln to invest in AI, cybersecurity startups

Accel has so far backed over 200 firms across 20 countries in the region and still has investments in over 100 firms

Venture capital (VC) firm Accel said on Tuesday it has raised a $650 million fund to invest in early-stage firms in Europe and Israel with a focus on artificial intelligence (AI) and cybersecurity.

The new fund will be Accel’s eighth since opening its London office in 2000. Accel has so far backed over 200 firms across 20 countries in the region and still has investments in over 100 firms.

It takes around three years to invest the fund and then the life of a fund is typically around 12 years, Harry Nelis, a partner at Accel, told Reuters, adding that Accel will invest in 25 to 30 new firms.

Accel, known for early investments in firms such as Meta and Dropbox, had also invested in major European firms like Deliveroo, Spotify and Supercell.

The European and Israeli venture capital market has been growing fast, with investments of $66 billion in 2023 compared to $150 billion in the US, per data from Dealroom. In comparison, the investments amounted to just $1.1 billion in 2003 vs. $17 billion in the U.S.

Artificial intelligence is going to be a big platform shift that will probably run for the next 10 years and we expect to place a good number of bets in AI companies, Nelis said.

He added: While AI companies of interest can emerge anywhere in Europe, London and Paris have become hubs for AI development. London because of DeepMind and Paris because of Facebook AI Research (FAIR).

London-based DeepMind is an AI research laboratory which is now owned by Alphabet. Meta opened FAIR in Paris in 2015 and it has become its hub for AI advancements.