Mangrove Capital raises $170mn for startups, not sell outs

Bloomberg

Mangrove Capital Partners, the Luxembourg-based venture capital firm, has raised a $170 million fund to invest in European startups. But its outspoken founder has no interest in startups looking for a quick buck.
The fund, which is Mangrove’s fifth since its founding 17 years ago, will invest in early stage companies, said co-founder and Chief Executive Officer Mark Tluszcz in an interview.
Mangrove was one of the first investors in Skype, turning a $2 million investment into a $200 million gain, according to the firm. It was also an early backer of Israeli-based Wix.com, which helps small businesses manage websites. Mangrove’s initial $8 million investment in Wix.com was worth $550 million after its initial public offering on Nasdaq in 2013, Mangrove said. Mangrove remains Wix.com’s biggest shareholder and Tluszcz serves as the company’s chairman.
“Our early success with Skype created a culture of risk-taking in the firm,” he said, adding that it has given Mangrove the confidence to encourage entrepreneurs not to sell out too early. He says that in the past, a lack of ambition and pressure from less aggressive venture capital firms has often resulted in European technology founders selling their companies too soon. He says this is one reason Europe has not produced a company to rival US technology giants such as Facebook Inc. and Alphabet Inc., he said.
Mangrove now manages more than $1 billion. With an investment team of 12 with offices in Berlin and Tel Aviv in addition to Luxembourg, the investor has backed a total of 130 start ups. Tluszcz is known for his sometimes controversial stances. He has been an outspoken critic of many so-called “unicorns” — private companies valued at more than $1 billion — saying that these companies were “fake unicorns,” having inflated their valuations with financial engineering and accounting gimmicks.