Europe’s resilience and long-term prospects amid a worldwide investment slowdown likely explain why LPs currently favor transatlantic VC firms. In January, Giant Ventures closed two recent funds totaling $250 million that it can invest in startups on each side of the Atlantic, and today TechCrunch has learned exclusively that Frontline Ventures has also raised $200 million in two funds: Frontline Growth and Frontline Seed.

Frontline has invested in each Europe and North America in the past, and its recent funds will proceed to pursue this strategy by targeting B2B software companies. The recent seed fund will favor European ventures, while the growth fund will give attention to American startups.

The enterprise firm’s logic is that U.S. integrated companies have a much greater likelihood of success once they expand across the Atlantic. “While traditionally an underserved market, Europe generates more than 30% of global revenue for top B2B software companies at IPO,” Brennan O’Donnell, who will lead Frontline Growth with fellow partner Stephen McIntyre, said in an announcement.

“Traditionally undervalued” is a preferred description of the European enterprise landscape, but the situation shouldn’t be as bad as the headlines seem to say for those who stop comparing recent investment trends with the boom times in 2021 and early 2022. Europe experienced, for instance, According to a report by law firm Orrick, enterprise investment has fallen significantly over the past few years, but startups on the continent still raised more capital last 12 months than in 2019. Indeed, Europe was the only major region where investment levels remained above pre-pandemic standards – in this respect, Asia and North America performed poorly.

O’Donnell and his partners at Frontline have been vocal about Europe’s values ​​for a while now, and even affirm it some research own. Frontline essentially wants to be sure that its U.S. companies don’t leave money on the table by not expanding to Europe once they should, and according to O’Donnell it goals to help startups get a foothold by making their expertise available once they’re ready increase.

Development plan

O’Donnell told TechCrunch that Frontline focuses on 4 features when helping portfolio companies expand into one other market: timing, go-to-market strategy, talent, and organizational design and location.

This is in order of importance, and the location of the company needs to be a derivative of the previous three features, O’Donnell said. “Ultimately, location depends on where your customers are and where the talent base needed to effectively support those customers is.”

Frontline has already put this framework into motion over the previous couple of years, supporting portfolio companies akin to HR software company Lattice and compliance platform Vanta to expand into Europe.

“The grate expanded at a time when it wasn’t obvious,” O’Donnell explained. While the company implemented its plan during the pandemic, when people were still not actively getting on planes, there was also a way that the decline in 2020 wouldn’t be sustainable, he said, adding that there have been some tailwinds for HR technology. A number of years later, this decision turned out to be “very successful”.

One of the pitfalls Frontline warns against is “success amnesia”: simply because an organization has had some success in the US doesn’t suggest it can do well in Europe with out a careful strategy.

“With Frontline’s guidance, Vanta has grown as rapidly as we did in our first 18 months in Europe,” said Christina Cacioppo, co-founder and CEO of Vanta. “We have tripled our customer base, quadrupled our team and established Vanta as a market leader globally thanks to Brennan, Stephen and the Frontline team.”

In addition to partners and offices in London, Dublin, Palo Alto and New York, Frontline has also built an executive community across the Europe and Middle East region, making a network that its portfolio companies can leverage. “Over the last few years, we have built a community of 200-250 of the top VPs and GMs in EMEA and host regular events.”

Talking about the company’s current portfolio, O’Donnell said he expects an initial public offering inside the next 18 months. Of course, it can take for much longer for initial bets to reach the exit stage, but Frontline also wants to help them get from one stage to the next.

Speaking about Frontline Seed, O’Donnell noted that the company has “particularly strong experience when it comes to helping companies raise their Series A.” Given that investment in the pre-seed and seed stages has not slowed down as much as in the later stages, avoiding this bottleneck may very well be useful for European start-ups looking to turn into transatlantic scale-ups, and maybe even IPO candidates.