Balderton Capital today announced the closing of its $1.3bn early stage and growth funds in a sign of the European tech sector regaining investor confidence and momentum.
We are often disconcerted at the lack of support for European entrepreneurship and innovation in comparison to that across the pond. However, there are investors who champion the region’s changemakers, such as Balderton, which invests exclusively in European startups and scaleups.
The new funds — the $615M Early Stage Fund IX and the $685M Growth Fund II — will back “Europe’s most ambitious entrepreneurs from seed stage through IPO,” the VC said in a statement.
Encouragingly for Europe’s tech industry, Balderton said it saw strong demand from global LPs, reflecting data showing that European funds outperformed its North American counterparts over 10- to 15-year periods.
Having backed over 275 tech companies across Europe since its inception in 2000, Balderton might know a thing or two about investment by now (as illustrated by initiatives such as the launch of its Founders Wellbeing and Performance Platform earlier this year). And where some VCs specialise in particular sectors, Balderton’s bets encompass a broad range of the tech ecosystem.
Sector diversification equals resilience
Balderton’s current portfolio includes the likes of neobank — and Europe’s most valuable startup — Revolut, mobile gaming company Dream Games, automated driving technology startup Wayve, and femtech app Clue. Startups like peer-to-peer shopping platform Depop, cybersecurity provider Darktrace, and AI chip developer Graphcore (recently acquired by SoftBank) count among previous investments.
“At Balderton, we believe the best way to change the world is to build a business — and that many of these world-changing businesses will be built in Europe,” said Bernard Liautaud, Managing Partner at Balderton. “As a firm, our mission is simple: to be the partner of choice to the founders starting and growing those European technology companies. These new funds put us in a position to do just that.”
Europe’s VC market, while smaller than that of the US, has proved resilient as a result of larger sector diversification, as exemplified by Balderton’s approach. It displayed an uptick in the second quarter of 2024, especially in AI and SaaS, while climate tech sectors such as energy have continued going relatively strongly despite the downturn of the past few years. However, the European market continues to face challenges when it comes to IPOs, with most exits occurring instead through acquisitions.