Balderton Capital closes sixth fund at $375m to back more European tech startups

 
Lynsey Barber
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Venture capital firm Balderton invests across Europe at an early stage (Source: Getty)

One of Europe's biggest backers of tech startups across Europe, including digital challenger bank Revolut and mapping app Citymapper in the UK, has raised a huge new fund to invest in early stage companies.

Balderton Capital has raised $375m for its sixth fund which has gained more interest from US investors who are seeing Europe as "a new opportunity" when it comes to backing startups.

"Valuation entry points are not as high as the ones in the US, but also you're starting to see a lot more big companies coming out of Europe." Balderton general partner Bernard Liautaud told City A.M., also noting an uptick of interest from family offices.

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The fund's first close took place in May and the second close now brings in around 30 investors "a mix of loyal investors and then a bunch of new ones" from Europe, the US and Asia.

"We had targeted $350m, we're doing a bit more, but if you do too much, you start drifting in strategy," he said, adding that series A, between $1m and $20m, is the sweet spot.

Balderton's most high-profile successes include early backing of Net-a-Porter before it was sold to Yoox and Betfair before it went public, while a DNA analysis startup that uses artificial intelligence, Sophia Genetics, is one of its more recent investments.

Brexit effect

"We're starting to see some differences," said Liautaud of the impact of the Brexit vote on its investment plans.

"The UK is possibly less attractive than it was a few years ago because of Brexit. When you think about the UK ecosystem, it's powered by British but also European folks.

"Before, the UK was like the land of the startup, everyone wants to go to the promised land and and that's where we are going to make money, and so on. But now it's more uncertain. If I'm from Italy or France am I going to go to the UK to join a startup? Am I going to take a risk because I don't know what's going to happen two years from now? Not sure," said the native French man.

"We see a bit of a slowdown that's coming here. The people who are here, we're not seeing them leave... but the people who before would have come here. I think we're going to see change, but I don't think it changes the European opportunity," he added. "For a pan-European fund it [Brexit] doesn't matter that much."

Read more: Tech startups have lost out on foreign talent because of Brexit

Liautaud said that there are likely to be more investments made on the continent with the sixth fund when compared with its two previous funds, but it doesn't "change the equation substantially" for the firm.

Robot future

The fund is also likely to focus on different areas of tech, with its fifth fund ($305m raised in 2014) having made several investments in fintech, something Liautaud says grew organically.

And artificial intelligence is likely to be a contender, whether that's in pure AI companies, or companies that use AI to disrupt industries. It has already backed a handful of AI firms, including Magic Pony, the under the radar UK firm snapped up by Twitter for millions last year.

"It's becoming an essential component of computing. Five years from now AI will be very boring," he said of the once futuristic technology becoming more and more ubiquitous," he said.

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