Balderton raises USD 600m for eighth flagship fund

Harriet Matthews
17 November 2021

Tweet
Facebook
LinkedIn
Google plus
Send to

Balderton Capital has held a USD 600m final close for Balderton Capital VIII, its eighth flagship fund targeting early-stage startups in Europe.

Balderton VII held a final close in November 2019 on its USD 400m hard-cap. The fund wrote equity tickets of USD 5m-10m, according to Unquote Data.

Given the development of the European early-stage technology market, the GP took the decision to raise a larger fund than its predecessor. "Our last fund was USD 400m, so this fund is 50% bigger," Rob Moffatt, partner at Balderton Capital, told Unquote. "We are reserving more in this fund for follow-on investment, as companies are getting bigger more quickly. We will also invest the fund a bit faster, since an average Series A is now bigger. We could have raised a larger fund but we have struck the right balance for European early-stage investing."

The GP came back to market for the fund more quickly than its typical fundraising cycle, Moffatt added. "It has been two years since our last fund in this strategy – previously it was usually around three years for us, but this reflects the market and the number of companies that are doing well. We are pushing the bar higher and so we need to invest faster."

In spite of the larger size, the GP raised the fund quickly. "The fundraise only took a few weeks," Moffatt told Unquote. "We were in a very fortunate position and could be very selective on the LPs we really wanted to be part of the fund, which is a result of our development and our track record."

The announcement follows the USD 680m final close of Balderton Growth Fund I in May 2021. The GP raised the fund to back later-stage companies than its flagship strategy, aiming to back 15 companies with equity investments of USD 25m-50m.

Balderton is headquartered in London. Its flagship fund team has six partners, with 25 investment professionals overall.

The firm's ESG policy saw the firm publish its Sustainable Future Goals policy in 2020, in which it outlined 60 objectives with the aim of reducing its impact on the environment, increasing its social diversity and improving its governance

"We have formed our own sustainable future goals, using the UN's Sustainable Development Goals and highlighting what makes sense for us as a VC, then applying it to how we make new investments," Moffatt told Unquote. "We have just done a one-year report and will publish this soon. We are around two thirds of the way to where we want to be against our objectives and key results, and have made great progress in some areas. For example, diversity and governance in founding teams is very good – the number of teams we have invested in that have mixed gender founders has got significantly higher – it's not quite 50%, but it's much higher than it was a few years ago. Our portfolio companies are increasingly becoming B Corps and we are making more investments with explicit sustainability goals, be it environmental or equality-related."

Investors
The fund is backed by institutional investors such as insurance companies, pension funds, university funds, endowments, charitable foundations, and government funds.

Around 85% of Balderton VII's LPs were existing investors, with an average commitment of USD 15m, according to Unquote Data. LPs in the fund include British Patient Capital, the European Investment Fund, Kempen Capital Management and US pension funds.

Investments
Balderton VIII generally invests in seed and Series A rounds. Although the fund is sector-agnostic, sub-sectors that it could target include healthtech, fintech, sustainability, software-as-a-service, and gaming, Moffatt told Unquote.

The fund can write equity tickets of USD 1m-30m, depending on the situation and the funding round stage. The vehicle expects to back 25-30 companies, generally taking a 15-20% stake in its portfolio companies on its initial investment.

The GP has seen four of its portfolio companies complete an IPO since the start of 2021: Darktrace, Sophia Genetics and Truecaller have completed listings, as well as US-based Flywire. The firm's recent exits also include the USD 1.625m sale of Depop to Etsy and the GBP 700m sale of Nutmeg to JP Morgan Chase, both of which were announced in June 2021.

Balderton's most recent investment is its follow-on funding for Germany-based ticketing platform Vivenu; the company announced a USD 50m Series B earlier this week. The GP first backed the company via its seventh flagship fund in December 2020, leading a EUR 12.6m funding round.

People
Balderton Capital – Rob Moffatt (partner); Bernard Liautaud (managing partner); Suranga Chandratillake (general partner).