Early Facebook investor Accel raises $650 million fund to back European and Israeli startups

Venture capital firm Accel said Tuesday it's raised $650 million for its eighth fund targeted at investing in European and Israeli early-stage startups, in a sign the venture capital market may be showing signs of a recovery.

The firm, which made prolific early bets on the likes of social media app Facebook and music streaming service Spotify, said in a press release it raised the fund to "support ambitious founders building global category-defining companies" in Europe and Israel.

Harry Nelis, general partner at Accel, said the European tech ecosystem in particular has evolved drastically in the nearly 25 years since it opened up its London office as a separate fund in 2001.

"The environment has dramatically changed since then," Nelis told CNBC. "People would ask us, can Europe generate $1 billion outcomes?"

"Now, there are more than 360 venture-backed unicorns across Europe and Israel, and the whole ecosystem has evolved from one that raised about $1 billion in capital to now $66 billion in 2023."

Nelis said Europe is producing a more promising talent pool now thanks to a "flywheel" of experienced employees from other companies that have hit unicorn status becoming founders of new companies themselves.

A report released by the firm last year citing Dealroom data showed that employees of 248 venture-funded unicorns in the region have fueled 1,451 new tech startups across Europe and Israel.

Nelis noted that there are emerging geographies in Europe that investors aren't paying as much attention to, but that are showing huge potential in technology innovation.

He called out Lithuania and Romania as examples of countries where major technology successes are emerging. In Lithuania, for example, secondhand marketplace Vinted is now a