Softbank UK Ventures and Softbank Europe Ventures have merged and in so doing have scaled back their combined fund size. Separately the two operations had a combined $950 million to invest but this has dropped to $600 million post merger. The merged entity will be known as Softbank Europe Ventures.
Softbank UK Ventures closed its first fund raising in March this year at $450 million, which was to be invested in the UK and Ireland by a team of around seven people led by managing director David Sola.
That figure included a $250 million commitment from parent Softbank and $150 million from ePartners, the News Corporation venture capital investment subsidiary. This $150 million was returned to ePartners, which in turn returned $200 million to Softbank, which had been committed to ePartners’ $640 million fund, ePartners II.
ePartners had invested just $130 million of the $640 million fund, but announced at the end of April that it was returning monies to LPs in the fund but that it would continue to manage ePartners I and the reduced ePartners II funds.
Mark Booth, managing director of epartners, said: “We raised our funds in a very different economic climate than we find ourselves in today. We do not believe that new investments can generate the types of returns we expected at this time, nor in the timeframe we had planned on when we formed the epartners2 fund nine months ago.”
Sola notes that the reduction in the newly merged Softbank Europe Ventures fund reducing from $950 million to $600 million means the task in hand is manageable. Sola believes the economic environment has changed to the point where it is unlikely that Softbank Europe Ventures could deploy $950 million of capital within the preferred three-year period. Typically Softbank Europe Ventures will continue to invest between GBP2 million and GBP8 million per transaction and in terms of the amounts committed to any one company the figure will up to double the initial investment amount.
As mentioned the funds have reduced by $350 million of which $150 million was the ePartners’ commitment. The other $200 million is returned to the Softbank parent ($100 million) and to LPs in the two funds ($100 million).
Softbank Europe Ventures prior to the merger had a fund of circa $500 million of which $100 million was committed by Vivendinet, an existing Softbank/ Vivendi joint venture and almost all of the remainder of the funds came from Softbank.
Softbank Europe Ventures today is run by four managing directors: David Sola in London who is responsible for UK and Ireland investments; Daniel Sasaki in London who is responsible for Israel and Scandinavia; James Stuart in Paris who is responsible for France and Benelux; and Marc Zugel in Munich who is responsible for all of the Germany speaking countries.
Eric Hippeau heads Softbank International Ventures of which Softbank Europe Ventures is part. In addition to Softbank Europe Ventures, Softbank International Ventures contains funds for Softbank Latin America, Softbank China Venture Capital, Softbank Korea Ventures, eVentures India and Softbank Emerging Markets.