There has been an unprecedented opportunity for growth stage investing in Europe and market disruption caused by the pandemic has only driven more innovation. 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.
Strengthening this ecosystem in Europe to help the future tech giants of the continent is London-based Balderton Capital. This new venture growth fund, one of the largest in the UK and Europe, has today announced the launch of a $680 million ‘early growth’ fund to help European tech compete globally. With this new fund, the company will actively deploy over $1bn in Europe’s break out companies.
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 immense 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.”
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 will be 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 supported 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.”
One of its major investors, British Patient Capital, has also announced a $75 million cornerstone commitment to Balderton Capital Growth I.
The commitment follows British Patient Capital’s investments in two previous Balderton Capital funds which focussed on investing at Series A. Several companies from these funds have now reached growth stage, such as AI drug discovery specialist, Healx, self-driving software provider Wayve, eco-friendly homecare product provider smol, cybersecurity specialist, Tessian, and Zego, the UK’s first insurtech unicorn.
Further, the London-based VC already has a strong UK portfolio including Beauty Pie, CarWow, Citymapper, Cleo, Depop (sold to Etsy last week), Revolut, Wagestream and Zego.
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