Early-stage rounds continue to account for the majority of investments in the European startup market, and on Tuesday one of the biggest firms in the region announced a new fund to bolster that trend. Accel has raised $650 million to back startups from seed to Series A across the U.K., the Continent and Israel. The fund is the eighth of its kind for Accel since it first put down roots in London in 2000.

Accel has invested in more than 200 startups in the region to date, making it one of the more prolific VCs in this market.

One of the recurring laments you hear in Europe is that even if the region produces exceptional talent and ideas, companies on the continent are challenged when it comes to scaling. There have been a number of exceptions over the years, however, that test that claim, and part of Accel’s gravity as an investor comes from the fact that it’s been a backer in a number of them. They include some of the most successful startups to come out of Europe, such as Supercell and Spotify (also incidentally a duo of Nordic startups, respectively hatched in Finland and Sweden).

In the years since those investments, Accel’s bet has been that the growth of startups in Europe has been strong enough to grow the pot of money that it’s raising to back them. Notably, the $650 million announced Tuesday is the same size as the firm’s early-stage fund in the U.S. (announced December 2023). Given that the U.S. is a considerably bigger market in terms of overall venture funding and number of startups, that speaks to Accel’s confidence in what’s playing out here.

“The European tech scene has really come of age,” said Harry Nelis, a longtime partner at Accel in London. Current investments include cybersecurity firms Cyera and Oasis, the care home marketplace Lottie, and the buzzy AI video startup Synthesia, among many others.

As you might expect from that list and recent headlines, the focus going forward will be on timely businesses tapping into the needs and interests of the day. That includes those that are building creative solutions to pressing problems (cybersecurity being a prime example of that), smart commerce solutions (including marketplaces that tap into societal and social needs) and — need I write it? — AI, AI, AI.

Venture investing in Q1 of this year, according to research from PitchBook, shows slight but still encouraging signs of recovery. In total some €16.3 billion was ploughed into startups across Europe in the first three months of this year. That’s up on Q1 of 2023, when €13.7 billion found its way into startups’ bank accounts, but both are down by many billions from the exuberant, internet-heady days of 2021 and 2022.

That drop might not be such a bad thing for the longer term: Right now the market is trying not to get knocked over by the wave of startups that were generously funded at precipitous valuations in years past, which are now crashing down as they find themselves struggling to reach their revenue projections, stand up their valuations and unable to exit on the public markets or raise more funding.

 Updated to remove Skype from the list of startups (Accel did not invest in it).