- One of Europe’s biggest venture capital firms, Index Ventures, raised $US1.65 billion for two new funds.
- Index Ventures has had a good 2018 after its portfolio firms Adyen and Dropbox went public.
- Its new venture fund is aimed at early-stage startups, while the growth fund is for bigger firms that need larger checks.
- Index has raised 30% more than last time because early-stage funding rounds are getting bigger.
Index Ventures, the early-stage backer of Bird, Sonos, and Deliveroo, has raised $US1.65 billion across two new funds targeted at early-stage and growth stage startups.
Index closed $US650 million for its ninth venture fund, and $US1 billion for its growth fund, which writes bigger checks for later stage companies. The firm has raised $US7.25 billion to date.
It’s been a good year for Index, which was founded in Geneva, Switzerland and has become one of Europe’s biggest venture capital firms, with an arm in the US too.
The firm was an early investor in Dutch payments company Adyen, which went public last month at a purported valuation of $US8.3 billion. Cloud storage firm Dropbox also went public, albeit with a lower-than-expected valuation. And a third portfolio firm, Swedish payments firm iZettle, sold to PayPal for $US2.2 billion.
Current promising startups on Index’s roster include Bird, which is planning its European expansion, Deliveroo, Slack, Robinhood, Revolut, and artist sponsor service Patreon.
Index has raised about 30% more for its two new funds than its last raise in 2016.
That’s because founders are seeking more finance at an earlier stage, according to Martin Mignot, partner at Index. There are lots of reasons for that.
“It’s a function of the exit market dynamics, where you see larger outcomes because companies are more global,” he said. “More people are online and going after larger sectors [such as] fintech. Fintech in developed markets is more than 10% of GDP.
“Also because there is more capital available, people are building businesses which they couldn’t before, which may be more capital-intensive,” he added. “Or they are going after regulated spaces where you need to hold lots of capital for regulatory reasons. Your business model tends to be more capital-intensive, because that’s what’s required to crack these more complex sectors.”