Balderton Capital has raised a new $600 million venture capital fund to invest in early stage companies amid a surge in the valuation of British and European startups. The launch of the new Europe-focused fund follows a record year for investment in startups in the region with over $80 billion already invested this year, according to Pitchbook data.
Balderton partner Colin Hanna says that over half of the Europe-focused fund would be reserved for follow-on investments in startups backed by the fund. The London-based investors had already branched out of seed and Series A investing with the launch of a $680 million growth stage fund in June.
“We are seeing at the later stages that valuations are getting very, very steep and if you want to defend our ownership, which we would like to do, in the companies that are really outperforming we have to invest as much again to defend our ownership,” says Hanna, a Berlin-based partner for the firm.
Balderton raised $400 million for its last early-stage venture fund in November 2019. The landscape for early stage and growth stage investment has been transformed since then by major Silicon Valley investors like Sequoia Capital setting up offices in London, and the rapid-fire deal making and aggressive valuations offered by hedge fund Tiger Capital, and other growth investors.
Balderton itself was spun out of San Francisco’s Benchmark Capital in 2007 and since raised $4.5 billion across ten funds backing some of the U.K’s leading startups like Revolut, Betfair, and Nutmeg. In a bumper year for the portfolio, four companies—Darktrace, Flywire, Sophia Genetics and Truecaller—listed, while fashion marketplace Depop was acquired by Etsy.
“This fund is doubling down on what we have done for the last 21 years but it is also meeting the moment because for a long time Europe hadn’t arrived,” says Hanna. “So now we can help founders scale their companies from seed to Series A, B, C and beyond and this early stage fund is a lynchpin of that.”