Venture Capital House of the Year

The economy in 2009 did no favours for venture capital firms, but despite this backdrop UK venture capital house DFJ Esprit managed a number of notable achievements, including raising two new funds, starting a new division of the firm dedicated to secondary investments, hiring new partners and making a number of investments.

When DFJ Esprit was set up in July 2006 it brought together a team with over 120 years of venture investing and relationship building experience in Europe and the US. It became part of the DFJ Network in August 2007, which gave the firm access to a network of partners operating in virtually every major technology market in the US as well as key markets in Europe, South America, Russia and Asia, with which to share best practices, deals and profits. The acquisition of 3i’s VC portfolio in 2009 further cements this firm’s position as a major player within European VC community.

Esprit raised two new funds over the past year with a total value of US$495m bringing the house’s total funds managed to just under US$1bn.

DFJ Esprit III is a new primary venture capital fund with a target of €150m and will continue DFJ Esprit’s long track record of investing in the most exciting early and later stage technology companies across Europe. A first close was held at €70m with commitments from some of Europe’s leading institutional and public sector LPs such as the European Investment Fund, Finnish Industry Investors, Partners Group, JP Morgan, LGT Group and HarbourVest. The fund is on target to raise the full amount.

DFJ Esprit also established a new division in 2009, Encore Ventures, which will focus on acquiring and managing secondary venture portfolios. DFJ Esprit closed Encore’s first fund, Encore I, a £170m maximum fund backed by leading secondary investors Coller Capital and HarbourVest, for the purpose of acquiring 3i’s European venture portfolio.

This is the first time a primary VC has developed a complementary secondary team and Encore draws on the long experience of the DFJ Esprit team in diligence and structuring investments. DFJ Esprit had previously arranged the acquisition of two investment portfolios: Prelude Trust – a public to private transaction, acquiring stakes in 14 companies for £50m and in Cazenove New Europe Access Fund, acquiring stakes in 35 companies for £67m.

Starting a new secondary arm and acquiring a portfolio of companies to manage required hiring new partners. Esprit increased its number of investment professionals this year by half, growing the team from 10 to 15.

DFJ Esprit’s deal flow in 2009 was at an all-time high. Over the past 18 months, the house made 14 primary investments with a total of US$30m, including Greenpeak, Graze.com, Imagine, Kiadis, Lagan, Lime, Oxford Immunotec, PacketExchange, Polatis, Tagsys, Tribold, Xmos, WAYN, ZBD,

That breadth of experience underpins Esprit’s approach to constructing deals and its recent activity shows the range of capabilities and relationships it can bring to bear. Across the board it continued its commitment to building companies through relationships with a wide range of partners. Esprit’s syndicate partners have included 3i, Add Partners, Aescap, Alta, Amadeus Capital Partners, Arts Alliance, Atlas Venture, Balderton, Benchmark Capital, Capricorn, Clarus Ventures, DN Capital, Eden Ventures, Endeavour Vision, Foundation Capital, Index Ventures, Life Science Partners, Octopus, Panorama Capital, Scottish Venture Fund (SVF), Scottish Equity Partners, Saffron Hill Ventures and Wellington Partners.

Esprit has worked with venture debt firms such as ETV, Kreos Capital and Noble, and has also worked with corporate syndication partners including Bosch GmbH, CISCO, Dow Chemicals, Intel, IBM, Motorola, Samsung and Texas Instruments.

In the wider community, DFJ Esprit is closely involved in a number of initiatives to improve discussion and expand the horizons of the VC community.

Chairman Bob Hook was a founding member of the EVCA High Tech Committee, and also a past member of the BVCA High Tech Committee. Simon Cook is a member of EVCA VC platform. Stuart Chapman is a member of the BVCA High Tech Committee. Alan Duncan is a past member of the EVCA High Tech Committee and lectures regularly on EVCA’s venture capital professional training courses. Nic Brisbourne is one of the few venture capital bloggers in Europe, commenting on the European technology and venture capital markets. Please go to www.theequitykicker.com.

DFJ Esprit’s partners have spoken at numerous conferences and industry events, including engagements for Cambridge University, Oxford University, London School of Economics, LPs and the web industry. Key industry events include

• CUTEC

• European VC contest

• TechTour selection committees

• CleanTech Invest

• Benelux Venture Forum

• Journées Sénat

• Seedcamp

BOX]

SNAPSHOT:

Headquarters: London, UK

Founded: 2006 as a merger between Cazenove Private Equity (founded in 2001) and Prelude Ventures (1984)

Other offices: Cambridge, UK

Investment professionals: 15

Assets Under Management: Just under US$1bn

Business: Focuses on four key sectors: technology, media, telecoms and medtech. Looks for companies that operate in high growth areas and focus on large market opportunities and backs entrepreneurs at any stage in the lifecycle of their businesses. The firm invests between US$0.5m and US$25m over the life of an investment.

BOX]

WHY THE FIRM WON:

• Raising two funds totaling US$495m.

• Established a new business, Encore Ventures, focused on the growing market of venture secondaries.

• Involved in one of the most high profile deals of the year, taking over the management of a 3i venture portfolio

• Increased investment team by 50%, from 10 to 15

• Deal flow reached an all time high in 2009

BOX]

Shortlist:

Balderton Capital

DFJ Esprit

Index Ventures