Index Ventures raises £328m fund to invest in US and European tech start-ups
30 to 40 companies to receive between £100k and £15m
Tech investor Index Ventures has raised a further $550 million (£328 million) to invest in US and European technology start-ups.
Index, one of the leading venture capital firms in Europe along with the likes of Accel Partners and Balderton Capital, said the fund, known as "Index 7", will go towards supporting start-ups focusing on big data and cloud, financial services, marketplaces, fashion/ecommerce, mobile and security.
The venture firm said it will invest between £100,000 and £15 million in 30 to 40 companies in return for a chunk of equity, typically in the "low double digits".
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Index's latest fund was raised in a few weeks with the help of pension fund giants, endowments, insurance companies and funds of funds.
Index was unable to specify exactly who contributed to the pot but it did say many of them were long-standing investors with Index. Those that have contributed to the fund stand to gain if the tech companies in Index's portfolio go on to, for example, have a successful IPO or get acquired by a larger technology company like Google or Facebook.
The company, which has raised a total of $4 billion (£2.4 billion) across all of its funds, said it will continue to focus on tech start-ups based in London, San Francisco, Berlin, New York, Stockholm, Tel Aviv and Paris.
However, approximately two-thirds of the fund will be invested in European companies and the vast majority of those will be in London, according to Index partner Jan Hammer. The other third of the fund will be invested predominantly in US companies.
Speaking at Index's Mayfair office, Hammer told Techworld that Index's army of investors are keen to invest in companies with a "global ambition", particularly those that want to go “transatlantic.”
He added that venture capital firms are no longer just looking at technology start-ups coming out of Silicon Valley.
In total, 11 Index-backed companies have IPO’d for over $1 billion in the last 12 months, with five of them hailing from Europe and six from the US.
Hammer said Index seeks out the most exciting technology companies with the help of its entrepreneur network.
“It could either be repeat entrepreneurs or it could be a referral through people we trust,” he added.
Index has invested in 140 technology and life sciences companies (43 in London) since it was founded in 1996, including tech giants like Facebook and DropBox, as well as fast-growing but relatively young London companies like Citymapper.
Hammer said that there are often occasions when venture firms compete for deals with start-ups in London and beyond.
“We distinguish ourselves by the way we support companies, which goes back to culture and values,” he said. “The way we see ourselves as entrepreneurs and try and understand the way the entrepreneur thinks. We try and equip them with networks, introductions and support services.”