Renowned for its backing of internet phone company Skype as well partaking in the US$1bn exit of software giant MySQL, London-headquartered Index Ventures has challenged the downward trend of venture capital fundraising, with the closing of its Index Ventures V on €350m.
Fund V closed on target and is the firm’s fifth fund raised in the past ten years.
The latest fund will focus on early stage and seed investments in technology, biotechnology and clean technology sectors throughout Europe, the US and Israel. Fund V was raised predominantly by Index’s existing investors.
Index partner Bernard Dallé told EVCJ: “We’ve had an enthusiastic response from our LPs but if you compare it to last year with our growth fund, it was definitely a more difficult environment. The fundraising took a lot more meetings than previous funds but overall it was a success.”
The new fund is expected to allocate approximately 60% of its funds to young information technology companies. The rest is to be allocated to biotechnology, with cleantech being allocated a comparatively small portion. The typical investment size will be between €5m and €15m.
Index partner, Francesco De Rubertis said: “On the biotech side, Index is focused on finding the best companies with the strongest pipelines. We are equally interested in very early stage ventures and more mature companies with established proof-of-concept.”
In response to the pharmaceutical pipeline deficit, the firm’s priorities for the therapeutic area are oncology, CNS, immunology and inflammation.
The fundraising environment in 2008 has been difficult for many firms in the VC space. In the US alone investment in early start-ups has plunged 71% according to figures from Thomson Reuters.
But little has changed for Index. Fund V matched the €350m raised for Index Ventures IV in 2007. Fund IV has had two successful years with investments in seed and early-stage deals, including Skype, MySQL, and Last.fm.
Index also announced that London-based Ben Holmes has been made partner of the firm. Holmes is responsible for investments in consumer and internet infrastructure companies. He also sits on the board of Mind Candy, Netlog, Playfish, Rebtel and Stardoll.
Index has offices in Geneva, London and Jersey. Its investments over the past year have included, Criteo, DimDim, Lehigh Technologies, MyHeritage, NormOxys, OpTier, Playfish, RightScale and WooMe.