Balderton Capital Pulls In $1.3 Billion for EU Tech Firms

Revolut investor Balderton Capital has raised $1.3 billion for European tech startups.

The London-based firm announced the funding — divided between its $615 million Early Stage Fund IX and its $685 million Growth Fund II — on its website Monday (Aug. 12).

Writing on the company blog, Balderton managing partner Bernard Liautaud said the fund is a testament to the vibrancy of the European venture capital (VC) space.

“More people than ever are starting businesses — and those that do have global ambitions,” he wrote. “They are determined to build companies like Spotify or Revolut instead of smaller regional leaders.”

The trend is also reflected in European venture investment numbers as well, Liautaud added. In 2008, venture investments in European startups came to under $8 billion, compared to more than $50 billion last year.

“And the returns speak for themselves, with European VC funds outperforming North American funds over both a 10 and 15 year period,” he wrote.

A report on the fundraise by the Financial Times (FT) points out that European venture capital (VC) has been quite active of late, with venture investment in the region climbed 12% during the second quarter, according to data from Dealroom.

Balderton has been investing in Revolut since that FinTech’s earliest days, becoming its biggest investor. Revolut recently became the most valuable startup in Europe after embarking on an employee share sale at a $45 billion valuation.

“You can imagine how much that propels the fund,” Liautaud told the news outlet. “To have a great track record is one where you have consistent performance and sometimes you have an outsized return.”

The FT report further notes that Balderton, unlike other VC firms based in Europe, only backs European startups, meaning the company has missed out on many of the high-profile artificial intelligence (AI) startups based in Silicon Valley.

As covered here last month, AI projects have helped venture funding in the U.S. reach its highest quarterly total in two years, climbing to $55.6 billion during the second quarter of 2024. That’s up 47% from the $37.8 billion startups in the U.S. took in during the first quarter, fueled largely by major investments in AI firms like Elon Musk’s xAI.

At the same time, there’s also been some indication recently that investors have become pickier about AI projects, with a Financial Times report in June showing that most of the stocks that surged during last year’s AI hype have dropped.

“AI is still a big theme, but if you can’t demonstrate evidence, you’re getting hurt,” said Stuart Kaiser, Citi’s head of equity trading. “Just saying ‘AI’ 15 times is not going to cut it anymore.”