LONDON – Balderton, one of the largest Venture Capital funds, launches a $680M Early Growth Fund to invest in European start-ups. Balderton Capital’s new growth fund aims to fill a gap for growth stage funding for British and European startups to help them compete on a global stage. The London-based VC fund aims to invest $25 million to $50 million in British and European startups that would in the past have turned to Silicon Valley for investment, acquisition, or a listing in the United States.
The fund will be managed by Balderton managing partner Bernard Liautaud and general partners Rana Yared, David Thévenon, and aims to invest in around 15 companies as many of the startups in the VC’s portfolio like Revolut, Vestiaire Collective and GoCardless reach billion dollar valuations.
“We haven’t had that many successes with European companies. We didn’t have the deal flow, we didn’t have entrepreneurs who had the ambition to grow big and a number of companies either didn’t develop or they got picked up by American companies early on,” said Liautaud. “There was less of an opportunity to build a great late-stage firm but now the European ecosystem has changed dramatically in the last five years.”
That period has seen investors clamoring to invest in early stage startups in booming tech hotspots across the continent but just 21% of those companies have gone onto raise a Series B round, according to data from Dealroom. “Our move into the growth fund coincides with a very clear maturing of the ecosystem and a realization among European companies that they can be global winners from Europe without having to default to seeking growth capital in the US,” said Yared.
Several of Balderton’s British and European investments have recently listed or been acquired. While Darktrace and The Hut Group listed on the London Stock Exchange, the Generation-Z favorite fashion reselling app Depop was snapped up by Etsy for $1.6 billion. The deal marked a major windfall for Balderton and but also represents the type of company that could have grown into becoming a global contender with the right backing. “I think it’s always a question for companies doing great: do you continue to become a public entity, or stop early,” said Liautaud.
While Depop may have cashed out early, several European startups that are already competing on a global stage have already raised significant late-stage rounds. Swedish buy now, pay later startup Klarna raised $1 billion in March as a stepping stone to its rumored Nasdaq listing, while Romania’s Uipath raised $750 million in February, and Spanish delivery startup Glovo raised $530 million in March.
Balderton first branched out from VC funding in October 2018 with the launch of a liquidity fund to buy shares from investors, and founders, in growth-stage companies.
Balderton Capital is a venture capital firm based in London, UK, that invests in early-stage, technology and internet startup companies in Europe. Balderton was founded to support Europe’s most ambitious technology entrepreneurs. The fund invests in European-founded companies at both early and at growth stage, through Balderton Growth I.
Founded in 2000 as Benchmark Capital Europe, Balderton Capital became fully independent in 2007. The company made over 100 early-stage investments between 2000 and 2020, including Revolut, Betfair, The Hut Group, MySQL, Yoox, Bebo, Talend, Recorded Future, NaturalMotion, Kobalt Music Group, GoCardless, CityMapper, and Sophia Genetics. In November 2019, Balderton announced Balderton VII, a new $400m fund to invest in European companies at Series A. The new fund will reportedly make approximately 12 investments annually. In 2018, Balderton announced the first fund dedicated to buying equity from existing shareholders of European technology startups.
Rabo Frontier Ventures
RFV is a €150 million investment fund of Rabobank, focusing globally on innovative Fintech and Agtech companies. RFV aims to invest directly in the early growth stage (series B) of companies that are disrupting or influencing the current business of Rabobank and indirect in leading general tech funds such as Greyhound Capital, Holtzbrinck, Northzone, Speedinvest, Valar Ventures and Balderton.