Index Ventures Nabs $441M

LONDON (Reuters) – Index Ventures said on Tuesday it had closed a 350 million euros ($441 million) early-stage technology fund, its fifth in 10 years, in a sign of continuing venture capital interest in young firms despite the downturn.

Index Ventures V will focus on early investments in the technology, biotechnology and clean technology sectors across Europe, the United States and Israel.

The cash was raised almost entirely from the Swiss-based group’s existing base of limited partners.

Index — best known for backing Internet phone-calling leader Skype before it was bought by online auction house eBay — has backed a range of up-and-coming technology and biotech firms.

Others include Swedish open-source database firm MySQL, which was sold to Sun Microsystems for $1 billion; British online betting group Betfair; and Danish antibody drug specialist Genmab.

Partner Francesco De Rubertis said the recession was causing “natural selection” among start-ups by killing off those companies that lacked original or disruptive technologies.

The dire economic backdrop has also hit valuations.

“It is a great moment (to invest),” he told Reuters. “There are not of lot funds that are fully financed and that gives us some competitive strength.”

Around 60 percent of the new fund is expected to go into young information technology companies, with biotech making up most of the remainder and clean tech accounting for a relatively small proportion.

The typical investment size will be between 5 million and 15 million euros.

Index also announced that Ben Holmes, a London-based member of the technology team since 2002, had been named a partner of the firm.

(Reporting by Ben Hirschler; Editing by David Cowell)