Is 3i pulling out of early stage tech startups?

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What’s going on at major venture capital firm 3i? Several whispers are reaching me that the VC group is planning to pull out of backing early stage Web ventures. A source who ought to know tells me they’ve heard such talk “from folk within 3i. At the end of ’07 they were trying to figure out where the VC team’s leadership would fit in the rest of the organisation, etc but I believe an announcement should come soon.” It would be a big story if 3i were exiting from earlier stage web plays.

However, a senior source at 3i tells me “No, that’s not the case – we continue to be committed to our web investments.” 3i has been a backer of Fastbooking, Taptu and Cachelogic in recent times.

So there you have it. Move along people, nothing to see here.

Meanwhile, 3i’s CEO Philip Yea told The Guardian on the weekend that they still saw opportunities in the European buyout market, despite the credit crunch. Yea said the market for very large deals in Europe had closed but “there are deals going to get done… We’re continuing to evaluate deals as we speak, we’ve done deals, so I think it’s just going to be a slightly slower rhythm, a slightly more hesitant rhythm.”

Whether that “rythmn” means tech startups will still be kept on in the 3i orchestra remains to be seen.

  • Anon

    I have heard the same.

    According to rumours, 3i is apparently going to stop making further venture capital investments in new companies. They will continue their management in existing portfolio companies and will continue to invest in them. Some senior partners will continue the management of existing investments, however most of the more junior staff will either leave 3i or move to the growth capital or buy-out teams.

    If this is true, then 3i will no longer be a player in venture capital. The growth capital and buy-out teams are apparently not affected by this strategic re-orientation.

    Is 3i following the path of Apax…?

  • jamescoops

    makes sense – there’s surely not much synergy between private equity and VC

    wouldnt it be better to spin-out the VC unit though as a new business?

  • ANON2

    They haven’t been serious about early stage tech for over 5 years – I left them not long before that, knowing my services wouldn’t be needed. One or two “dabbles” have been seen, but nothing truly serious.

  • Mike Butcher

    Actually I think if they were *not* pulling out of early stage then I would have been called and given a bloody-nose by their PRs by now for posting this. So far, no call.

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