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February 15, 2007
Hello Tallinn, Hello Sophia! Index Ventures Is Calling
Less than two years after closing its fourth fund, Index Ventures has raised its fifth. This time it's a €350M fund, which is $50M more than the last one.
That makes three European VC firms that have raised their second funds post-bubble, at a time when many of their peers are still trying to close their first post-bubble fund.
The other two are Northzone and Benchmark Capital Europe. It just shows that capital will flow pretty quickly - even to European venture funds- not the most popular category in the eyes of LPs- if the VCs can show returns.
The alarm:clock euro talked to Bernard Dalle to find out what the VC firm plans to do differently with this fund, e.g. Eastern Europe is on the map, and his view that some Euro VCs think they’re private equity investors.
Dallé said that it was a quick closing and oversubscribed. Not surprising considering Index’ big Skype deal and its handling of Betfair, however it wasn’t just its own investments that made investors want to get into its new fund.
“You shouldn’t lose sight of the creation of a critical mass of companies like CSR, Q-Cells and TomTom. It wasn’t the case for Europe when we raised our last fund. These are billion dollar companies, but there’s also been some greater than $100M ones like Cramer.
Europe is the attraction, but Index has also invested in several US companies.
The LPs are happy to be exposed to the deals we do across the Atlantic -- the deal ones we did because of our network, but our focus is Europe, and now Eastern Europe too.
Index has been talking about the potential of investing in Eastern Europe since you raised the last fund, but the only deal you closed there so far has been Allpeers.
True. But we are currently looking closely at a couple of investments. We were opportunistic until now. But we have a more structured approach. We’ve met with VCs and entrepreneurs in Estonia, Prague, Russia. Index is starting to be visible there and getting to know the players.
It seems to us that it’s a good time to be selling companies, rather than investing.
It is a good time to be selling. There’s a solid IPO market, particularly in Europe and good M&A. As for investing, investors may be chasing opportunities that are over-priced. Where it gets pricey is with consumer Internet companies that have revenues. But early stage deals are still reasonable [reasonably valued] – where value can still be added by our team. A result of the value that we offer, we are able to get reasonable terms and conditions. This is not private equity. We're looking for smart, hungry entrepreneurs that could be doing their first ventures.
Index Ventures, which has offices in Geneva, London, and Jersey, is focussed on Europe tech and life science companies, but its LP agreements say it can invest globally.
It also has named Saul Klein as a venture partner on the tech investment side. Vecosys blog has more about his track record.
Read - Saul Klein leaves Skype to turn “gamekeeper” at Index (vecosys)
Read press rel.
Posted on February 15, 2007 07:35 AM | Posted to News And Updates | Permalink
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