Benchmark Capital Europe, the venture capital group, is set to announce on Wednesday it has raised $550m (€430m) for its latest European venture capital fund.

The total raised matched the $500m it generated for the group’s first fund at the height of the dotcom boom in May 2000 and the $375m from July 2004.

Barry Maloney, partner at Benchmark, said the offer had been significantly oversubscribed but the group had kept the total down so it would not be under pressure to invest.

Benchmark’s best-known current investment is bebo.com, the social networking site. Mr Maloney said the group would look to make similar investments “There’s still a lot of interesting deals in that area,” he said. “It’s very capital-efficient.”

Other Benchmark investments include Betfair, the online betting exchange, and Setanta, the Ireland-based pay TV sports broadcaster.

“We think the environment in Europe couldn’t be better at the moment,” said Mr Maloney. “There’s a lot of open-source software and web 2.0 [second generation of Internet-based services — such as social networking sites and communication tools] companies,” he said. “The US market is a little cluttered for venture capital right now.”

He said that the Benchmark would also look to invest in larger, more mature companies that have never had venture capital investment – as it did with Codemasters, Europe’s largest independent video games developer – and clean energy technology.

Funds raised for European private equity houses rose dramatically in the first half of the year, according to the European Private Equity and Venture Capital Association, with clean energy among the more fashionable areas to invest.

This week,Credit Suisse, the Consensus Business Group and Abu Dhabi Future Energy Company, a unit of Abu Dhabi investment arm Mubadala Development Company raised $250m to launch a fund investing in clean energy technology and sustainable development.