After raising substantial money over the past year for internet growth fund and life sciences companies, prominent investor Index Ventures has completed the set by adding a new €350 million fund for early stage companies.
The company — which now has major presence in Geneva, London and San Francisco — is best known for investing in European internet businesses like Skype, MySQL and Lovefilm. But over the past few years it has expanded its presence elsewhere too, with significant moves in San Francisco, New York and Tel Aviv.
It’s three years since Index last raised an early stage fund, which was around the same size.
Partner Neil Rimer told me that the new money would be invested in around 35 companies over the next three years — linking up with entrepreneurs at the very beginnings of their business, and (where possible) following them all the way to an exit.
“In terms of where the rubber meets the road in our business, it’s really early stage,” he said. “It’s meeting two guys with an idea and an early version of the site and deciding to help them. This is our core, this is really what we do.”
Europe remains a focus for the company, not least because Rimer recently railed against ‘defeatist’ European companies who shied away IPOs in London in favor of New York. His argument centered around the idea that this created a vicious spiral in which the fact that few successful tech IPOs happen in Europe causes to discount going public in Europe.
So will he be making sure that Index’s European investments stick by their guns?
“It definitely struck a chord,” he said. “When I called people defeatist, they thought I was calling them wimps — but I’m calling myself a wimp too: unless we fix this thing, we’re being defeatist. We can’t just assume that all of our great companies, all of this work will go into enriching American investors, and all of our great companies will move to the U.S.”
Index’s focus will remain on areas where it is already active: things like fashion, marketplaces, big data and knowledge. And the money is already starting to be distributed, so keep your eyes out for new funding announcements coming soon.
And what about long term vision? Venture capitalists have investors of their own to worry about — and getting returns on €350 million is no small feat in an industry that many say is broken. So what’s Index looking for this time?
“The best funds return between three and 10 times the fund, and sometimes more than that,” he said. “We’re shooting for 10x.”