Benchmark cuts ties to Europe

Benchmark Capital Europe announced last week that it is spinning out from Benchmark Capital as an independent entity called Balderton Capital, seven years after the London-based shop was formed by its Menlo Park, Calif.-based namesake.

It’s really a rebranding more than anything else, as Benchmark Capital Europe was mostly autonomous to begin with. It never held regular partnership meetings with the parent firm, and a shared carried interest arrangement was whittled away to nothing in the $550 million Benchmark Europe III fund that closed late last year. However the two groups continued to co-invest in each other’s funds.

“Our model since the beginning was to replicate what we had here in Silicon Valley, which means that they would be making their own decisions,” says Benchmark Partner Kevin Harvey. “The natural evolution of that is that they have their own name, and we’d expect the same thing to happen with our Israel office at some point in the future.”

Benchmark Israel raised $250 million for its second fund in 2005.

Benchmark Europe has raised more than $1.4 billion for three funds since its 2000 inception, and has invested in more than 70 companies. Most of these are in the United Kingdom or continental Europe, but the firm has also invested in a few deals in China and the United States (as part of co-investments with its Silicon Valley counterpart). The investment arrangement works the other way, too, as Harvey is chairman of MySQL AB, a Swedish open-source database company.

In a formal statement, Balderton Partner Barry Maloney said: “”Independence, combined with a continued strong network of co-investment and affiliation with Benchmark, is the right way to move forward for our investors and our entrepreneurs. More doors and options will be open for each team, even as our relationships with each other remain strong.”