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Index re-ups defy tricky fundraising market

After only six months of fundraising, venture capital firm Index Ventures has closed its biggest fund yet at £430 million, according to the firm, thanks to significant re-ups from LPs.

Index Ventures has raised £430 million (€503.8 million; $686.7 million) for its new growth fund, according to the firm. The firm started fundraising six months ago and the successful, and rapid, fundraising was the result of significant support from investors in its previous growth fund.

No one at the firm was available for comment at press time.

Amidst a backdrop of economic distress, private equity firms are struggling to raise capital for new funds.

Its success in holding on to investors is likely due to the firm’s track record, which includes home-run investments such as Skype and online film rental company Lovefilm. Its first growth-dedicated fund, launched in 2007, backed companies such as online retailer Asos and notebook-maker Moleskine. According to a source close to the firm, the average revenue growth from 2009 to 2010 for Index’s portfolio was 70 percent. 

The new fund, Index Ventures Growth Fund II, has reportedly already made an investment in online file sharing business Dropbox. Index backed the company during a second round of fundraising for the file-sharing service, which already has 45 million users in 175 countries, according to the company’s website. 

The fund’s mandate is “consistent with what we have done so far with the original growth fund”, according to the firm. It will invest between €10 million and €50 million in fast-growing companies. The fund will back companies across the globe.