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European VC Plural has carved out a reputation for itself as one of the few VC’s in the region started and led by entrepreneurs who grew their own startups, with its founders including Taaavet Hinrikus from Transferwise/Wise; Sten Tamkivi; and Ian Hogarth, the founder of Songkick who more recently has also added a role with the UK government in AI safety strategy. Now, Plural itself is scaling up, with a fresh €400 million fund to back what Hogarth refers to as “transformational” startups in the region, bringing more operational know-how to get them running as businesses.

As with its investments up to now, Plural’s main focus will continue to be on early-stage startups rather than growth rounds, he added.

When Plural originally launched in June 2022, the startup venture world was at a high-water mark. Just six months before, Atomico reported, in its annual survey, that startups in Europe had raised a record $100 billion 2021. Plural’s €250 million debut fund itself was arguably a product of that: it was actually intended to be €150 million.

The fund being announced today is coming at a very different moment.

Venture capital in Europe, buffeted by a weak economy, has largely been in a state of retreat over the last year. Startup investment slumped in 2023 to $45 billion. Two of the high-profile investors that arrived to set up shop in the region, Omers and Coatue, significantly downgraded or shut down their operations. Others have stayed but are playing it cool. Valuations have, overall, nosedived over missed growth targets and investors driving a hard bargain. Even Plural has sat on some of its money: Hinrikus said in an interview that it’s still making investments out of its first fund.

Plural’s latest fund still exceeded its original target — thanks in part to the participation of one LP in particular, an unnamed academic institution in the U.K., Hogarth said (other LPs included institutions and family funds out of the U.S. and Europe primarily). But it didn’t come without its own struggles.

“It would be wrong to say it was easy,” Hinrikus told TechCrunch.

Plural — whose partners also include co-founder Khaled Helioui (the former CEO of gaming company Bigpoint) and more recently Carina Namih (a veteran founder and investor who has a track record in health tech) — to date has made 26 investments out of the first fund. So far activity has gravitated around a few key categories that have proven to be strong in Europe overall.

Artificial intelligence accounts for nearly one-third of all of its investments, with “frontier tech” (scientific breakthroughs that have viable paths to products) taking up 16% and climate and energy-focused startups 14%.

Notable investments out of the first fund have included London-based Robin AI, which raised $26 million earlier this month for a “legal copilot”; Isometric, another U.K. startup, which raised $25 million last year for a new approach to building a carbon removal registry; a German energy generation disruptor called Proxima Fusion; and Unitary AI, a startup that has built a multimodal technique — reading visual, audio, and text-based cues — to improve video content moderation.

These are some of the same categories that Plural will continue to explore when investing its latest fund, although it will be taking a somewhat different partner approach when doing so.

After taking on a role leading the government’s AI Foundation Model Taskforce and helping organize the high-profile AI Safety Summit in the U.K. last year, Hogarth is currently the Chair of the U.K. government’s newly formed AI Safety Institute.

As a result, Hogarth has essentially stepped away from investing in, and being involved with, AI companies that were a part of his portfolio. He declined to give specifics of how that’s being carried out, describing the process as “a series of mitigations” that have included divestments and other actions that have meant, he said, “there’s no way that I can benefit economically from having taken this role.”

AI may be the current flavor of the month, but it is far from the only game, or only opportunity, in town. The tighter market of the moment has given investors are lot more clarity, it seems, in the firm’s search for what Hinrikus describes as “consequential businesses.”

So while some might feel that the consumer ship has sailed, Plural is looking to board that ship. “We think there are some really special opportunities in consumer that will emerge in the next the next few years,” said Hogarth.

“What we really care about are founders going after a very singular vision, trying to do something that feels highly differentiated,” he added. “[With] AI right now, there’s a huge number of people building businesses that look identical to 500 other startups. So what is more interesting is when people have taken a slightly less usual route and they have a stronger point of view on how the world’s going to develop.”