Index Ventures has announced a new early-stage, €400 million ($550 million) fund aimed at tech startups in Europe, US and Israel. This is its seventh early-stage fund and part of a total €3 billion ($4 billion) raised by Index since its inception. The fund will invest from seed and early stage, scaling up to €15 million depending on the requirements of the company. And it’s quite into fashion, such as online product discovery platform Rad (pictured).
Index intends to focus on its “core hubs” of London, San Francisco, Berlin, New York, Stockholm/Nordics, Tel Aviv and Paris. And it certainly has some good stats on its side. Seven of its companies exited for over $1 billion in the last year.
It had four European-born IPOs with Just Eat (LSE – the first listing on the LSE High Growth Segment), King and Zendesk (NYSE), Criteo (NASDAQ), plus one U.S.-born IPO with Arista Networks (NYSE). It’s had two strategic exits with The Climate Corporation (Monsanto) and Supercell (to Softbank)
In its portfolio it has 11 companies valued at over $1 billion, including five from Europe (Criteo, Supercell, Just Eat, King and Zendesk); and six in the US (Climate, Dropbox, Etsy, Hortonworks, Lookout, Pure Storage).
Companies it has that have attracted very significant financings include Elasticsearch, Farfetch, Funding Circle, Shapeways, SoundCloud and Socialbakers, as well as seven from the U.S.: Dropbox, Etsy, Flipboard, Hortonworks, Lookout, Pure Storage and Squarespace.
Index is approaching the point where it could be considered to be playing at the level of any Valley-based VC. We understand is was a “relatively easy” fundraising process, according to partner Ben Holmes.
He said the company had ever more conviction that “you can build out from Europe. That question is being answered now. Six ‘billion-dollar’ events in the last 12 months puts us up with where the best Silicon Valley names are. We don’t think that’s the end of the road for the exits.”
Against other players Index competes and sometimes co-invests with Balderton and Accel. The latter had a big ownership in Supercell, as did Index for instance.
“It’s becoming visible that this new era of tech companies have huge revenues, and are sizeable in terms of employes, such as Just East, Criteo, Zendesk, King,” Index Ventures partner Dominique Vidal tells TechCrunch. “It’s not just air. These are great businesses.”
Interestingly these exits are starting to form a better ecosystem for Europe. For instance, 40 people in Criteo alone made $1 million apiece. It means they in turn may become angels.
“We’re not US transplant VCs. We not a franchise partner of a U.S. fund,” partner Neil Rimer said. “We’re not even the second generation. The founders of the company run it today. We stacked our reputation on betting outside of the Valley and bet because of the growth of the Internet – the Internet is now ‘Silicon Valley’. Great entrepreneurs can now come from anywhere.”
Index has been a heavy advocate of European IPOs.
“The ‘winter is coming’ feeling about high valuations of U.S. startups is more a U.S. phenomenon,” Holmes says. “In Europe this is less the case.”
Its other investments include:
- Big Data & Cloud – Elasticsearch (Amsterdam), Trustpilot (Copenhagen), Pure Storage (Mountain View, CA)
- Financial Services – BitPay (Atlanta, GA), Wealthfront (Palo Alto, CA)
- Marketplaces – Crowdrise (Detroit, MI)
- Fashion/Ecommerce – The Cambridge Satchel Company (Cambridge), MetaPack (London)
- Mobile – Anki (San Francisco, CA), SwiftKey (London)
- Security – Adallom (Tel Aviv), Lacoon (Tel Aviv), Niara (Sunnyvale, CA)