Draper Fisher Jurvetson, a US venture capital group, has bought a strategic stake in Esprit Capital Partners, a European venture capital firm, to create DFJ Esprit, its springboard into Europe.
It is DFJ’s second run at Europe: it tried to crack the continent in 2000 recruiting Giuseppe Curatolo and Colin Watts just before the bubble burst. Both are now at TL Com, a venture fund headed by Maurizio Caio, the founder of Bain Italy.
Esprit will be DFJ’s exclusive partner in Europe, while two of DFJ’s partners join Esprit’s investment committee.
Simon Cook, chief executive of Esprit, said: “We were looking to expand and recruit an extra partner now we have 120 new partners. It is a logical response to an increasingly global business.”
Esprit, itself the product of a merger between UK broker Cazenove’s private equity arm and UK venture firm Prelude, is joining DFJ’s network of more than 120 venture capital professionals, across 30 cities in the US, Asia, and South America. It has around 500 portfolio companies and over $5 billion of capital under management.
Cook said: “DFJ has been doing this a lot longer. It has been international since 1999. It has made mistakes and learned lessons. In Don Wood it has a partner dedicated to making the network work. It is prepared to invest time and effort.”
John Fisher, managing director of the US firm, is keen on Europe and is joining the board, he said.
Wood says DFJ is bullish on Europe’s future, as it’s the biggest economic bloc in the world. He believes strong VC brands will help differentiate the haves and have-nots in terms of which European groups will struggle to raise future funds and which funds will see the hot deals first.
DFJ Esprit currently manages $560 million in two funds focused on private technology companies in Europe; Esprit Capital I which it acquired via a management buyout from Cazenove in 2006 and the evergreen, LSE-listed, Prelude Trust.
DFJ Esprit will continue to raise its own pan-European funds, rather than global ones. Cook said: “The model is for local teams with local funds to back local entrepreneurs within the DFJ family of funds.”
An investor in Esprit Capital I said the firm was starting to discuss a successor fund with investors. Cook declined to comment.
DFJ Esprit’s portfolio has more than 35 high growth technology companies across Europe including Lovefilm, a DVD rental business and social network website WAYN. It is expecting to launch two IPOs next month.
Over the past twenty years, DFJ has backed such industry-changing catalysts as Hotmail, acquired by MSFT; Baidu, a Chinese search engine; and Skype, a voice over internet business acquired by online auction site eBay.