As Earlybird Closes New €150m Fund, LPs Warm To European Tech Valuations

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The Berlin-based Earlybird Venture Capital has today announced the €150 million ($200 million) final closing of its fourth early stage technology investment fund. This will be geared towards European investments, from early to growth stage companies. The new fund brings the firm’s total capital under management to €650 million ($800 million). The firm says its fourth fund was “oversubscribed” and included previously participating LPs from its previous fund and a small number of new investors.

Earlybird has already made 10 investments out of the new fund in the last year. It’s also made initial commitments from the seed to Series B stage, with first investments ranging from €300,000 to €10 million. If you like infographics, here you go or see their special site.

Earlybird’s portfolio now covers SaaS companies like B2X Care, SocialBakers, Traxpay and Wunderlist, market-places such as Auctionata, Carpooling.com and Videdressing and consumer startups like The Football App, Versus.IO and EyeEm.

But what this new fund raise indicates is that LPs and institutions that back VCs in Europe may well be coming back to the fold after cooling off for a while from Euro tech investments.

Indeed, Earlybird partner Ciarán O’Learly told me that “we could have easily raised another €50-100m given some more time – the sentiment has really changed. This is key, because ultimately if asset managers around the world don’t believe that European tech is an opportunity – European VCs will struggle to be sustainable. But that has totally changed.”

He believes the reason for this is that Europe is becoming known as a place capable of producing global category leaders in quantity and quality.

On the flip side, the fact that the US market is saturated with capital means that LPs are now realising that Europe could have some very attractive value and ultimately great returns because it remains under-capitalised in terms of investment.

As an indication of this, the rate of large US VCs investing in Berlin and London startups and growth companies has increased, while at the same time, European VC funds are closing new funding rounds, such as Accel and Amadeus recently.

A third trend is that older European VC partnerships that did not adapt or perform are running on empty now. If you look at DFJ Esprit’s loss of Nic Brisbourne to a faster moving Forward Venture Partners, or of Paul Jozefak from Neuhaus Partners to LiquidLabs – it’s clear this is a trend.

The survivors are becoming more entrepreneur friendly and are taking more risks with early stage tech ideas in the same way US funds operate. A case in point is Earlybird’s funding of the bizarre but very addictive DingDong app.

By way of comparison to the rest of the European scene, we threw together some quick and dirty facts and guesstimates about the latest in VC funds in Europe.

You’ll notice that while the biggest funds are in the UK, the Nordic and German funds are moving quickly.

Nordics

Creandum
Latest Fund: €135m
When: 2013
Total funds under management: €210m

Northzone
Latest Fund: €130m
When: 2010
Total funds under management: €350m

Sunstone (EU WIDE)
Latest Fund: €85m
When: 2011
Total funds under management: €700m

Germany

Earlybird (EU WIDE)
Latest Fund: €150m
When: 2013
Total funds under management: €650m

Target Partners
Latest Fund: €113m
When: 2008
Total funds under management: €225m

Wellington (GLOBAL FUND incl US)
Latest Fund: €80m (life sciences though) – last “all in” fund was €265m – global fund
When: 2012 – last tech fund was 2008, global approach
Total funds under management: €800m

UK

Accel (EU WIDE, some US)
Latest Fund: €359m
When: 2013
Total funds under management: €1.5bn in Europe (guesstimate)

Atomico (GLOBAL)
Latest Fund: €215
When: 2012
Total funds under management: €340m

Balderton (EU WIDE, some US)
Latest Fund: €328m
When: 2009
Total funds under management: €1.5bn (guesstimate)

DN Capital (EU WIDE, some US)
Latest Fund: €52m
When: 2012
Total funds under management: €150m (guesstimate)

Index (GLOBAL)
Latest Fund: €350m
When: 2012
Total funds under management: €2.5bn