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Benchmark gets return from Betfair stake

Benchmark Capital, the venture capital firm whose partners include former Esat Digifone chief Barry Maloney, has made a multi-million-pound return on an investment in Britain.

The funder sold part of its stake in online betting exchange Betfair to Softbank, a Japanese internet group. Softbank has bought a 23 per cent stake in Betfair from some of the company’s existing investors, including Benchmark, for stg£355 million.

The deal valued Betfair at stg£1.54 billion. Maloney said that Benchmark had made a ‘‘great return’’ by selling part of its stake. Tim Bunting, chairman of Betfair, said that the firm’s early investors made a return of 130 times their original investment in the deal.

The venture capital firm still owns about 7 per cent of Betfair, which is valued at almost stg£108 million. Benchmark originally invested in Flutter.com, which raised stg£27 million in funding before merging with Betfair in 2001.

In the year to the end of last April, Betfair had revenue of stg£107.1 million and made a pre-tax profit of stg£17.1 million.

The firm, which allows customers to bet against each other instead of accepting odds from a bookmaker, is expected to seek a stock-exchange listing.

Benchmark raised a $375 million European fund in 2004. It is an investor in several Irish companies, including payments firm Alphyra, sports broadcaster Setanta and software companies Openet Telecom, Newbay, Innerworkings and Globoforce.

Maloney said he was pleased with the performance of the Irish investments.

He is also the chairman of Alphyra, which has been linked to a stock market flotation or a trade sale. ‘‘We [Alphyra] are of a size that we could do lots of things, but we don’t need to do anything," Maloney said.

Bunting is also a director of Alphyra.