Index races to €300m final close

Index Ventures is the latest European VC investor to raise a new vehicle, closing its fourth fund on €300m.

Geneva and London-based venture capital investor Index Ventures has held a final close of its fourth fund, Index Ventures III, on €300 million ($397 million).

The fund, which was launched in September 2004, attracted commitments from a number of new investors including Adams Street Partners, AlpInvest Partners, BP Pension Fund and Horsley Bridge International.

Index Ventures III also saw a number of returning investors including HarbourVest Partners, LGT Capital Partners, Partners Group and Schroders. The fund will invest in technology and life science growth companies in Europe and Israel.

The fund is a successor to Index’s 2001 vintage $300 million Index Ventures II fund, from which investments are still being made. Previous investments from that fund include telephony service Skype, open source database MySQL and email archiving service KVS, which was recently sold to Veritas for $225 million.

Commenting on the close, David Rimer, operating partner at Index Ventures, said in a statement: “We chose to cap the fund at €300 million from the outset. Our fastest and most successful fundraising is testament to the rising confidence institutional investors feel for European venture capital.”

Speaking to PEO, Rimer confirmed that the fund had attracted significant interest from investors: “Strategy defines size. We looked at number of deals, size of deals and the size of opportunities in the market and the partners decided that €300 million was a good size.”

Sepaking about investors who were “extremely probing” in their due diligence, Rimer went on: “Most LPs are starting to view venture capital as a global asset class. Venture is a place where alpha really does matter.”

Index did not use a placement agent for the fundraising and were advised on legal matters by Ropes & Gray LLP.

The new vehicle is the latest in a series of European venture fundraisings that may be a barometer of rising confidence in the European venture capital industry.

Earlier this month, Sofinnova Partners, the French venture investor backing life science and IT companies across Europe, closed a fully subscribed new venture capital fund, Sofinnova Capital V on €385 million.

Last September, the European arm of international venture capitalist Benchmark Capital closed its second European fund on $375 million.

In December, Munich-based early-stage investor Wellington Partners posted a first closing of its Wellington Partners III Technology Fund on €85 million and Advent Venture Partners held a first close of its fourth venture fund on £128 million.

At €3.5 billion ($4.5 billion), total European venture capital investment in 2004 was only marginally down on the total recorded the previous year. Analysts say this suggests a stable level of activity has been achieved for the first time since 2000.