An early backer of $7 billion UiPath explains why the number of European tech entrepreneurs from lesser-known cities will boom

• An early investor into software automation startup UiPath says the number of tech entrepreneurs emerging from lesser-known European cities is set to boom.
• Accel investor Andrei Brasoveanu said the emergence of successful companies out of Europe was leading to a kind of trickle-down effect.
• European tech startups raised $34 billion in the first 11 months of 2019, almost $10 billion more than the amount invested across the whole of 2018.
• 29 cities across Europe attracted $100 million or more of tech-related VC funding in 2019.
• Click here for more BI Prime stories.

A European investor who made a smart bet on one of the biggest software companies to emerge from the bloc reckons the stage is set for young, European founders from lesser-known cities to boom in the coming decades.

Andrei Brasoveanu helped lead Accel's investments in software automation startup UiPath, now worth $7 billion. He also helped with Accel's investments into UK neo-bank Monzo and data startup Celonis.

He spoke to Business Insider about the current environment for young tech founders in Europe.

Asked whether he thinks the number of young European tech entrepreneurship will continue to grow - particularly in cities lesser-known for tech such as Lisbon - Brasoveanu was adamant it would.

"For sure," he said. "I think once you've opened the box, you can't close it."

According to a report by another European VC firm, Atomico, $34.3 billion was invested into the European tech sector between 1 January 2019 and 21 November 2019 - almost $10 billion more than the $24.6 billion invested throughout the whole of 2018.

Last November, another Accel VC, Sonali De Rycker, described the European tech ecosystem as living through "a golden age."

Brasoveanu said: "There are a few reasons for this. So, one, we've already had the first generation of entrepreneurs. [In Portugal], for example, we've had companies like Farfetch and OutSystems emerge."

Farfetch is an online fashion company founded in 2007 by Portuguese entrepreneur José Neves, and which floated in September 2018. Outsystems is an enterprise software firm founded in 2001 in Lisbon by Paulo Rosado.

"Another is that all these people are feeding back into the ecosystem - as angels; as advisors; mentors to founders," he continued. "People here know that starting a business here is a viable career option and one you can make your parents proud with."

He added that more employees valued equity as much as a stable salary, and ascribed the growth of tech founders from young European cities to a culture that evolved over time. "You have would-be startup employees who understand the value of equity, and why equity can be much more valuable than a fixed salary at a larger corporation," he said.

"So I think a lot of this is cultural, and once this culture has evolved, I think we'll see bigger and bigger generations of tech founders emerging."

The usual suspects do still attract the most VC dollars: the likes of London, Paris, and Berlin. But the idea that European tech is defined solely is now changing. Per data from Atomico, 29 cities across Europe attracted $100 million or more of tech-related VC funding in 2019, suggesting diversity beyond the key hubs.

"I've noticed the same thing first-hand with UiPath in Romania, where there's suddenly a new generation of young, would-be founders who understand what it takes to start a business, or at least to fund a business," said Brasoveanu.

Founded in 2005, AI unicorn UiPath is a prime example of a successful tech firm arising in a city not historically steeped in either tech or entrepreneurship. The firm, which provides a software platform for automating business processes such as accounting and claims processing, was founded in Bucharest - one of the last cities in Europe to emerge from behind the USSR's Iron Curtain in 1989.

Accel led UiPath's $30 million Series A fundraise in April 2017, as well as its $153 million Series B less than a year later. It is now valued at $7 billion. For Brasoveanu, its success is no coincidence.

"[UiPath] has a founder and team who've managed some really impressive US customers out of Romania, and we've backed them," Brasoveanu said. "We said 'hey, we'll help you [UiPath] take your company global.'

"Amazing founders can come from anywhere, and this is exactly the same story."