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Balderton Capital Raises $375 Million Fund to Invest in European Startups

Venture capital firm now manages $2.6 billion across its funds

Balderton Capital, the London-based venture capital firm, has raised a $375 million fund to make early-stage investments in European startups.

The fund, the group’s sixth, will target a portfolio of between 30 to 35 companies, Bernard Liautaud, Balderton’s managing partner, said in an interview. The firm will invest between $5 million and $20 million in each of these companies, targeting an ownership stake of between 20 and 25 percent, he said.

“If we do Series As really, really well, this is the place where we can get extraordinary returns,” Liautaud said.

The new fund is a jump from the $305 million Balderton raised in 2014, which was also aimed at early-stage European companies, and brings the total amount of money Balderton manages across its funds to $2.6 billion. 

The company said non-disclosure agreements prevented it from naming the investors in its new fund, but added that many of the investors had also backed earlier Balderton funds. It said investors included a mix of endowments, pension funds, and family offices, with no one region composing a majority.

Balderton has already made 10 investments from the new fund since March, the company said. These include SOPHiA Genetics, a Swiss-based company that helps hospitals sequence patient genomes, as well as Hiya, a Seattle-based startup that analyzes voice calls, and Luno, a cryptocurrency exchange, which has offices in London, Singapore and Cape Town. 

In the past, Balderton has backed French data analytics company Talend, which went public on Nasdaq in 2016 and is now valued at $1.2 billion, and Magic Pony, a London-based startup bought by Twitter in 2016 for a reported $150 million.

The European Investment Fund (EIF), an EU-backed body that serves as a critical anchor investor for many venture funds in the region, has pulled back from committing money to U.K. venture capital firms following Britain’s vote to the leave the EU. The EIF had invested in previous Balderton funds. Liautaud said he could not comment on whether the EIF is an investor in Balderton’s new fund, but he said that “Brexit has not been an issue in the fund raise at all.”

Competition among venture capital firms for these early-stage investments in Europe is intensifying, Liautaud said. “There is a lot of money on the ground,” he said, adding that European companies have attracted a record $12.5 billion in venture investment so far this year. “The market is quite hot.”

In January Bloomberg News reported that Brent Hoberman, co-founder of Lastminute.com, had begun raising financing for a new London-based tech fund for European startups. In February, Skype founder Niklas Zennstrom’s venture capital firm Atomico announced it had raised a new $765 million fund – one of Europe’s largest ever – to back European entrepreneurs.

Still, Liautaud said, he did not think there was “a bubble” in tech startup valuations in Europe and that these companies were still less expensive than in the U.S. or parts of Asia.

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