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Benchmark Raises $550M EU Fund

November 15, 2006 Only 18 months after setting up a $375-million European VC fund, Benchmark Capital said Wednesday it has closed a new $550-million European venture fund. “We ran out of money,” said Barry Maloney, a London-based general partner with Benchmark. He was referring to the fact that the VC firm had committed all the capital in its previous fund and is looking for more investments. “We love the European investing environment right now,” Mr. Maloney said. “It has one-twentieth of the competition of some other markets and really smart entrepreneurs.” He said the VC firm would prefer to focus on Europe rather than China, as many Silicon Valley VCs do. “We love to see the planes going from the U.S. to China,” he quipped. “They should just keep on going.” Mr. Maloney said Benchmark Europe is particularly keen on open source software, Web 2.0 companies, and the cleantech space, in which Benchmark has yet to make an investment. He anticipates that the fund will be 70 percent early stage, with the remaining investments in later-stage technology companies Late-Stage Investments.


Two such later-stage investments, a video game developer called Codemasters and sports broadcaster Setanta, make up 40 percent of Benchmark’s previous fund. Mr. Maloney said he expects to make further later-stage investments in privately held tech and media companies that have yet to take in private funds. “We see many such opportunities in Europe and this provides us with a few ‘rocks’ to allow us to make other early-stage investments,” he said. This is Benchmark’s third European VC fund. The first, raised around the turn of the century, was originally $750 million in size. The VC firm took the unusual step of returning some of the funds to investors, shrinking the fund to only $500 million. “We thought the investment environment then was horrible,” Mr. Maloney noted. He pointed out that about half of the investments in that first fund were made starting in 2003, when valuations were more reasonable. Among the winning investments was Betfair, which claims to be the world’s largest online betting site. Mr. Maloney said Benchmark made a partial exit from the company, which enabled it to return $115 million to investors. Mr. Maloney is one of a six-man investing team for Benchmark in London. He was previously chief executive of the Irish GSM (global system for mobile communications) wireless operator Esat Digifone and currently serves as non-executive chairman of O2 Ireland.