B-business partners, one of the most high-profile European venture capital groups established during the technology boom in 2000, has brought a halt to new investments and is set to close two offices.
In an interview, the firm’s chief executive officer Lennart Johansson confirmed reports in The Times newspaper saying that the firm is closing its London and Stockholm offices, leaving its headquarters in Amsterdam as the only remaining office. In addition, he confirmed that 12 of the firm’s 15 investment staff are being made redundant because new deals are “off the agenda for the foreseeable future”.
But he did not verify reports in the same source that the firm was planning to return up to €500 million ($623 million) of its €728 million ($908 million) fund to investors. He said the firm had not disclosed any financial details but admitted that “we have more cash than we need for developing the current portfolio”.
Johansson said the decision to steer clear of new investments was due to current market conditions: “There is an element of overheating at the moment. A lot of funds are in the market and those that have a time limit are eager to invest. If a good opportunity comes along there is a lot of competition, which in our minds is resulting in excessive valuations. Other people may have a different view.”
He added that the firm would now be focusing on existing portfolio companies, but would not be liquidating the portfolio. “We are not looking for immediate exits,” he said. “We will examine possible mergers with other companies as well as acquisitions and organic growth.”
It is believed that the Wallenberg family, which controls around €9 billion of assets, has provided approximately 80 percent of B-business partners’ total capital through its Stockholm-based Investor group. Although unconfirmed, it is thought that the firm has invested around €100 million in ten fledgling technology companies since inception. These include IBX, the business-to-business exchange, and Finexia, a financial services software provider.
Last year, European venture capital saw a 31 percent decline in the number of deals to 1,039, and a 23 percent drop in value to €3.5 billion, according to figures from Ernst & Young. However, the fourth quarter saw a seven percent increase in the number of deals, with seed and early-stage transactions increasing by 33 percent.