(Feb 4): Cherry Ventures, a venture capital firm based in Berlin, has raised US$500 million (RM2.22 billion) in funding to back European startups.

The investor wrote a letter to entrepreneurs, published on Tuesday, that called for the reversal of the “doom and gloom” narrative about Europe’s economy. The firm’s partners said they hoped to seed the continent’s first trillion-dollar company.

“We have all the right ingredients: world-class talent, research depth in critical technologies, and thriving tech hubs — but our culture of innovation must change,” the letter read.

Tech investment in Europe has lagged well behind the US. Around US$45 billion went to European startups in 2024, less than a third of the US total, according to recent figures from venture capital firm Atomico. Next to the US and China, Europe has struggled to receive substantial funding into fields like space, clean energy and artificial intelligence.

But Europe’s startups cannot continue to blame this financing gap, said Ilkka Paananen, chief executive of Supercell, a Finnish game developer, and an investor in Cherry Ventures. He cited the impact of DeepSeek, whose AI models upended assumptions about the large investments needed in the field.

Cherry Ventures, which was founded in 2012, invests in early-stage startups and raised its last fund of €320 million (RM1.47 billion) in 2022. The firm said it now has two new funds totalling US$500 million to invest in early deals and finance its existing portfolio. Cherry Ventures did not disclose the amount of each individual fund.

The firm has primarily backed software businesses, as well as Greyhound owner Flix SE and The Exploration Company, a developer of reusable space capsules.

“In the early 2000s, European startups were mostly copycats of US companies, and it created some successes,” said Filip Dames, a founding partner at Cherry Ventures. “The ecosystem has to mature to a point where there’s a second or third generation of founders.”

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