Index Team Comment - Our new €350m fund to invest in early stage innovation

Posted on: 20 June 2012

Today we're delighted to announce our new €350m early stage technology fund. It's the final piece of €1bn of new capital we've raised in the last 12 months to complement the international platform we have been building to invest in both early stage and growth technology as well as life sciences companies.

 

Every week our investment team spends time in cities like Amsterdam, Berlin, London, Madrid, Milan, Moscow, New York, Paris, San Francisco, Stockholm and Tel Aviv and we are fortunate to meet amazing entrepreneurs. These entrepreneurs are driven by the incredible opportunities they see to change the status quo. They see a world in which few industries are safe from transformation when you combine the mainstream reach and relative capital efficiency of the Internet, mobile and cloud computing with disruptive new business models like marketplaces and SaaS.

 

While technology adoption is increasingly rapid and worldwide, we continue to believe that Europe will be fertile ground to discover and help develop world beating innovations. In fact, even while Europe is facing massive macroeconomic challenges, at the same time we have seen very clearly that European startups are coming of age. In fact in our portfolio alone there are now at least 20 European born private companies with significant scale – in 2011 these companies alone had combined 2011 revenues of €1.3bn and y/y growth of around 75% – plus these are businesses which have created more than 5,000 new jobs in the last 10 years.

 

So with our new fund, we couldn't be more excited to continue to seek out and partner with the very best seed and early-stage teams wherever they are to help finance innovations across some of the major areas in which we are actively investing, including: big data, cloud (consumer & enterprise), commerce (especially fashion), financial services, games, mobile and marketplaces. People often ask us what we look for in investments and whether that has changed much over the years – certainly the themes of our investments evolve and change over time, but our focus on the types of founders and opportunities we look for has remained very consistent.

 

Firstly, we aim to be the partner of choice for outstanding European & Israeli born companies looking to build global category leaders.

 

We certainly have had some great early experiences of these type of amazing European companies with the likes of ASOS, Last.fm, MySQL, Net-a-Porter, Playfish and Skype, but we see these companies as just a prelude. When we work with companies like Alertme, Boku, Criteo, Erply, Farfetch, Fon, Housetrip, King.com, Mind Candy, Mimecast, Moo.com, MyHeritage, Oanda, Onefinestay, OpenX, PeoplePerHour, Rebtel, Soluto, Songkick, Soundcloud and Viagogo and see how they are scaling from the earliest stages to the international stage, we see that European & Israeli born teams are just at the beginning of their potential.

 

Secondly, the US has always been a fundamental part of our strategy, in fact the original premise for Index was to export the “Silicon Valley mindset” to Europe.

 

We have been active investors in the US since our first fund, making over 60 investments in the last 15 years. Now with a physical presence in San Francisco, we hope that we are better placed than ever to both support teams looking to tap into the US market as well as be the partner of choice for innovative US companies with breakout international potential. The last 12 months have seen a number of our early stage US investments achieve some great exits, including Assistly, Cloud.com, Facebook, Gluster and RPX. But it is the future which also looks really exciting to us as we start to see the potential for investments in companies like Big Switch, Chartbeat, Climate.com, Factual, Flipboard, Hortonworks, Lookout, Kaggle, Nastygal, Path, Pentaho, Redwood Systems, Right Scale, Stack Overflow and Trialpay – many of whom are only just starting to ramp up their presence in international markets.

 

Finally, but by no means last, as the Internet has become more mainstream we have seen the emergence of businesses capable of dominating large national and regional markets without necessarily attacking the US.

 

Again, we saw some early successes like Betfair and Lovefilm but are now starting to see amazing growth at companies like Funding Circle, Just Eat, iZettle, Not On the High Street, Ozon, Photobox and Stylistpick who are not just carving out huge opportunities nationally but increasingly internationally as well.

 

We are incredibly fortunate to work with such great teams on a daily basis and look forward with our new early stage fund to partnering with the next generation of teams in all three of these areas.

 

- The Index team

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