There has been a great opportunity for growth stage investing in Europe especially with the pandemic which has fuelled the demand for disruptive innovations. The number of deals between $5 million and $50 million in Europe has been growing steadily year-on-year, with deal counts in those ranges now accelerating faster than in the US.
While ten years ago, the US was doing five times the number of venture deals compared to Europe, today’s ratio has more than halved.
London based Balderton Capital has recently announced the launch of a new growth venture fund valued at about $680 million to assist European tech companies compete more favourably on the global scale. With this fund, it will effectively invest about $1 billion in break out companies in Europe.
After two decades as one of the leading European Series A venture firms, the company is expanding to primary growth investing. It already holds one of the largest growth stage portfolios in Europe, having backed some of Europe’s most successful startups, including Aircall, ComplyAdvantage, Contentful, Depop, GoCardless, Infarm, Labster, Revolut, Zego and Depop (sold to Etsy last week). The group’s Liquidity portfolio also includes some of Europe’s leading growth companies such as Darktrace, Flywire and Truecaller.
Talking about the gargantuan untapped potential in the industry and an opportunity worth $50 billion in next three years, Bernard Liautaud, Managing Partner in Balderton Capital said: “I’ve been an investor at Balderton since 2008, and it has been incredible to see the increasing number of ambitious European founders, and to be able to support them financially through those critical first three to five years with our early stage funds. With this Growth Fund, we can now support them as they scale to become global industry leaders. We predict a $50 billion growth opportunity in Europe in the next three years alone, and we want to be the first choice for those ambitious founders.”
Early-growth stage firms on the spotlight
The fund will target exceptional companies at the early-growth stage and is sector-agnostic. Balderton expects to invest between $25m and $50m per company through both primary and secondary investments.
Talking about the new way forward, Rana Yared, general Partner, added: “Our approach for this fund will be ‘one of few’. This means personalised attention from the entire partnership, plus access to Balderton’s leading platform team. We’re looking for fifteen or so really exceptional companies that have the potential to be sector leaders and disrupt global industries.”
Balderton Growth I is led by a world-class team of experienced investor operators: its Managing Partner, Bernard Liautaud; General Partner David Thévenon, previously at Google and Softbank; and General Partner Rana Yared, previously at Goldman Sachs. This team brings exceptional experience to share with founders, having been on the board of global giants across Europe, Asia and the US, including Grab, SoFi, Lemonade, Talend, THG, Tradeweb and Unqork. Its Growth team will also be sturdily backed by the firm’s equal Partnership.
David Thévenon, General Partner at Balderton said: “Our partners are a mixture of financiers, tech operators and founders themselves, and together we have a deep understanding of the opportunities and challenges of scaling globally from the continent. This fund will allow us to expand our support, not only to our existing portfolio but also to Europe’s most promising future global leaders.”
The London-based VC already has a strong UK portfolio including Beauty Pie, CarWow, Citymapper, Cleo, Depop (sold to Etsy last week), Revolut, Wagestream, Luno, Lendable,Flywire, Nutmeg,Gocardless, Lifesum,Healx,Kaia,Sophia,Digital Surgery, Oncimmune, Aircall, Funnel, Pusher, Contentful, Hubilo, Qubit, Zego, Demodesk, Peakon, Talend, Voi, Vanmoof, Frontier Car Group, Virtuo, Wayve, ComplyAdvantage, Dark Trace, Detectify, GitGuardian, Recorded Future, Hiya, Tessian, Ory, Safex AI, True Caller, Lyst, Smol, The Hut Group, Thread, Yoox, Vestaire Collective, Infarm, Vivino, KBox Global, Simple Feast, Workable, Appear Here, Bebo,Big Fish Games, Globoforce, Prodigy Finance, Sophia Genetics, Sunrise Calendar, Tictail, Kobalt Music Group, Rebtel, Lovefilm, Betfair, MY SQL. .
It was founded in 2000 as Benchmark Capital Europe by Bernard Liautaud, Tim Bunting,Daniel Waterhouse, James Wise, David Thevenon, Rob Moffat, Suranga Chandratillake. It became fully independent in 2007 and it has made early stage investments in over two decades.
Since 2008, it has had many exits namely Betfair ($2b IPO), Bebo ($850 million sale to AOL), Natural Motion ($527 million sale to Zynga), Scansafe (sale to Cisco), Lovefilm (sale to Amazon), Yoox ($700 million IPO), Icera ($367 million sale to Nvidia), MY SQL (sale to Sun Microsystems for $1 billion), Big Fish Games (sale to Churchill Downs for $885 million), Recorded Future (sale to Insight Partners for $780 million), Sunrise (sold to Microsoft), Talend (2016 Nasdaq IPO), Frontier Car Group (bought for $700 million by OLX Group), Magic Pony Technologies (sold to Twitter).
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.
It has assets of $3billion.