Index Ventures has a new $550m VC investment fund and its eye on London tech startups
Europe's biggest venture capital investor and the backer of star startups such as Just Eat, Asos and Transferwise has raised millions of pounds in new funds to invest in tech startups across Europe, the US and Israel.
Index Ventures has raised a new $550m (£377m) fund from its existing long-standing investor base which includes endowments, pensions and insurance funds, among others.
London is Index's single largest city with just over 50 of its portfolio companies based here and future investments are expected to continue flowing into the capital. "Obviously London is the most important tech hub in Europe and we’ll see a lot of activity in London" Index partner Jan Hammer told City PM praising the city's startup ecosystem.
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"We're extremely pleased by the strength of the UK ecosystem in the UK. Angel and seed stage has an increasing amount of activity and there is an increase in quality of companies being born in London, which bodes well for moving into growth stage."
"We're generally seeing great quality and quantity," he added of London's tech startups.
London's growing status as a centre for technology has inspired interest from several new funds which have set up shop in the capital over the past year or two. However, this increased attention is creating an overall positive contribution rather than rivalries.
"Obviously we’ve seen new VC firms being born in London, but we don’t see them as competition. We cooperate and partner with these other funds. The more that gets invested in the ecosystem, the greater the chance of successes," said Hammer.
Index has several successful IPO exits under its belt – eight in the past two years to be exact – including takeaway company Just Eat and Candy Crush creator King, both from the UK. On potential future IPO's Hammer said: "King and Just Eat are great role models for other businesses. A lot of things have to go right for IPOs to happen, but it’s a great ambition to have."
The VC firm has also boasted another successful exit just today, after London-based startup Swiftkey was acquired my Microsoft for a multi-million pound sum. The combined revenue of Index's portfolio companies stood at $9.2bn for last year while they employ more than 35,000 people across 24 countries.
With the question mark of the EU referendum hanging over British business, Hammer said the issue had yet to come up in conversations with companies, but "I expect it progressively will”.
“Uncertainty is not good for business.” he told City PM but said he would want to see the UK’s progressive attitude towards innovation continue. “Certainly in regards to fintech, the uk regulator, the FCA, has been very forward thinking. We wouldn’t want to see it change," he said.
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Hammer said the fund will focus solely on the tech space, ranging from software, cloud, SaaS, fintech, mobile, social and enterprise. The firm earlier this week spun out its life sciences investment fund into a new venture with backing from pharma giants GSK and Johnson & Johnson. Medicxi Ventures' fund will have €210m to splash on European biotechnology.
It has also named Twitter boss Dick Costolo a partner at the firm in a high-profile move in recent weeks, while associate Shardul Shah has today been promoted to partner.
"With three new partners and two new funds added in less than a year, we’re eager to work with the next generation of founders and welcome their companies to the Index family,” said Danny Rimer, who opened Index's London office in 2002 and San Francisco in 2011, as the firm enters its 20th year.