Our new fund for building iconic businesses
Today we’re delighted to announce our new €400m ($550M) early stage fund both to invest in and support the passionate and ambitious entrepreneurs looking to build the S&P 500 of the next 20 years.
Since we first started in Geneva in 1996, we’ve been fortunate to partner with some of the world’s greatest entrepreneurs, across 38 countries in Europe, Israel and the US -- a generation of talent, upon whose successes Index has been built and the reason we are here today.
However, back then in the venture business, the strategy of a single partnership investing across borders wasn’t very popular; indeed, most venture firms focused on a core geography – often Silicon Valley – and lived by the very credible mantra “never fund a company more than a 20-minute drive away.” That era is coming to an end. As the Internet becomes a fundamental part of the social and economic fabric of every country, it’s increasingly clear that great entrepreneurs can start and grow billion-dollar technology companies from anywhere.
Over the last 18 years, as we’ve opened additional bases in London (2002) and then San Francisco (2011), we’ve been working with a network of growing companies across our core geographies. While we were fortunate enough to back some of Europe’s scarce early billion-dollar tech leaders like Betfair, MySQL and Skype, we’ve just started to see in the last few years, that those businesses were a prelude to Europe being able to grow tech giants alongside the US, Israel and, increasingly, China.
In 2013, our network of 140 companies employed over 25,000 people, generated revenues of over €6B ($8.2B), while growing 117%, with 1,800 additional job openings. Seeing this level of growth close up is humbling, but what we love most are the individual partnerships we have with each entrepreneur and their teams. Whether it’s supporting JB Rudelle of Criteo as he develops his management team across geographies, or debating with David Buttress of Just Eat on where to IPO, it’s those conversations that define who we are and teach us an enormous amount about company-building.
If billion-dollars exits are an emerging threshold for entrepreneurial scale, the entrepreneurs we’ve supported have had an exceptional 12 months. Five companies – Just Eat, King, Criteo, Zendesk and Arista Networks – have recently had their public market debuts at valuations of over $1B, while two others, Climate Corporation and Supercell, realized strategic exits of around $1B or more. Significantly, five out of these seven billion-dollar exits were born in Europe, and over the same period, Europe and Israel produced several more contenders.
In the last 12 months we’ve also seen companies across all major sectors attract significant funding to continue to build on their established scale and global category leadership. These include consumer internet and mobile champions like Dropbox, Flipboard, Lookout, SoundCloud and SwiftKey; enterprise leaders such as Elasticsearch, Hortonworks, Pure Storage and Socialbakers; amazing marketplaces like Etsy, Farfetch and Shapeways, as well as breakthrough financial services businesses like Bitpay, Funding Circle and Wealthfront.
All of these great businesses are being built in cities across Europe, the US and Israel, and with our newest fund, we’re more committed than ever to making early bets on the world’s most ambitious entrepreneurs, no matter where they emerge. We continue to be deeply inspired by the raw passion and ambition that we see in Silicon Valley; but we’ve always believed that the Valley is not just a place, but a mindset too. Every year, on our travels, we see growing evidence that this ‘Silicon Valley state of mind’ has taken hold across the world, and we feel fortunate to work with many of these talented entrepreneurs.
As part of our new fund, our tight-knit team of 20 investors will continue to fan out from our offices in Geneva, London and San Francisco, racking up air miles, in search for seed and early-stage opportunities in our regular haunts in London, the San Francisco Bay Area, New York, Berlin, Los Angeles, Stockholm, Tel Aviv, Paris and beyond. Rather than a geographical focus, each member of our team provides a unique operational or strategic expertise. We talk daily, video conference weekly, meet in person quarterly, and play poker together often – all of which means that a connection made with any one of us translates to direct access to the entire team.
We firmly believe that it’s the personal touch and assistance in building a business that has made the difference. We take providing full-service support to the entrepreneurs we work with very seriously, and our single partnership structure and community approach means that once an entrepreneur joins the Index network, they get full access to the extensive contacts, insights and best practices we have pooled from across our platform. We look forward to helping more entrepreneurs plug into the people and places they need to scale and amplify their business.
So what will be the focus for the new fund? Somewhat business as usual, as we are excited to continue and expand our search for innovation around four key areas: mobile consumer, enterprise, networks, and financial services. In these sectors, incredible things are happening at warp speed – from AI and robotics, to bitcoin and low-cost, consumer investment platforms, to the Internet of Things and marketplaces disrupting the way consumers and merchants transact. Then there are all the ways visionary entrepreneurs are leveraging cloud, big data, security and mobile technologies to transform every aspect of our daily lives.
As we look forward to investing what will be our seventh early stage fund, we also want to take a moment to thank the entrepreneurs and teams we already work with, who get up every day in cities across the world, and think non-stop about how to grow and run their businesses. There are many things we relish about our job but rolling up our sleeves and getting down into the weeds with you, as you build your companies from the earliest ideas all the way through to industry icons – is the thing we love, most of all.