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Balderton Capital launches new fund to invest in European tech startups



Partners and managers of the European venture capital firm Balderton Capital.

Balderton Capital

Venture capital firm Balderton Capital launches a new $ 400 million fund to invest in early-stage European technology startup

Balderton said on Tuesday that the fund is targeting newly established series A funds the stage – in other words, companies that want to get their first significant funding round. The London-based company added that the new fund will make about 1

2 investments per year.

Europe's technology sector is seen as lagging behind its American and Chinese counterparts, especially in terms of venture capital, or VC, inflows and valuations. There have been some signs that the continent industry may be picking up steam.

Last year, a report from another VC firm, Atomico, said that Europe was home to twice as many technical public offerings as the US, while recently listed European firms appeared to outperform their US rivals. A prominent stock exchange listing in 2018 was Adyen & # 39; s, the Dutch payment company, which has seen the stock price rise above 50% since it debuted.

Lars Fjeldsoe-Nielsen, a general partner at Balderton, told CNBC that he doesn't think Europe is far from setting up a technology company that can compete with Silicon Valley giants like Facebook and Google or online platforms out of China like Alibaba and Tencent.

"I don't think we are far away at all," said Fjeldsoe-Nielsen, a former Uber executive. "I spent 10 years in the Valley before I started at Balderton. For me, this shift has happened that means we're not hanging out now."

However, he added that Europe is home to technology companies with much lower valuations than their US and European peers, but said this was due to "significantly lower" hiring and housing costs. The venture capitalist suggested that interest from US investors in Europe's private tech sectors gave Balderton greater impetus to start a new fund.

"We actually see many US funds making investments in Europe as well, because the technology talent is on par with what we see in the US," he said. "But the valuations are lower here. So there is an opportunity in the near future right now that is attractive."

Profitability & # 39; the name of the game & # 39;

Fjeldsoe-Nielsen referred to Revolut, a British financial technology firm Balderton invested in, as an example of a company struggling to compete with American and Chinese hawkers. Revolut is reportedly seeking a $ 1.5 billion financing round, consisting of both equity and convertible debt that can value it up to $ 10 billion. The company has declined to comment.

But one thing that has haunted the VC industry of late is the resurgence of unprofitable technology companies that want to go public in the United States. The recent shelf of WeWork's IPO and SoftBank's agreement to save office space Startup has raised concerns about such loss-making businesses.

"The name of the game is profitability now," Fjeldsoe-Nielsen said, adding that technology companies have remained private for much longer. "I think WeWork has really helped to emphasize that."

Revolut, which Balderton first supported in 2015, suffered a loss of £ 32.8 million ($ 42.2 million) in 2018, according to the latest accounts.

known for supporting mainly European start-ups, Balderton said the launch of the latest fund means it has raised over $ 3 billion in eight separate funds. Apart from Revolut, the company's portfolio includes German farming upstart Infarm and the Swedish scooter-sharing company Voi Technology.


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