Balderton bets on LP need for liquidity with pioneering new European fund

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European early-stage venture capital major Balderton Capital has hit a $145m final close for a specialist fund targeting equity stakes from early shareholders in high growth, scale-up tech companies in the region.

The firm said Balderton Liquidity I would take minority stakes between regular funding rounds, making it possible for early shareholders – including angels, seed funds, current and former founders and employees – to “realise early returns, reinvest capital in the ecosystem, or reward founders and early employees”.

Balderton took just three months to raise the new fund from existing LPs and some new investors, drawn from institutions and family offices across Europe, the US and Asia.

A statement from the firm said, “A first for Europe, the launch of Liquidity I is indicative of the maturing European tech ecosystem, which has seen extraordinary growth and strong venture capital investment in recent years.

“Venture funds of this type have been common in Silicon Valley for more than a decade. However, while the acquisition of early shareholder stakes does take place in Europe on an ad hoc basis, no specialist venture vehicle for them currently exists.”

Balderton says there are over 500 companies in Europe which have raised more than $20m over the last decade, and conservatively estimates the total value of early shareholder stakes in these companies is at least $4bn.

Firm managing partner Bernard Liautaud said, “As a leading early-stage venture investor in Europe for the past eighteen years, we have developed a strong expertise in European company building from early stage to global leadership.

“In the recent years, we have grown our team, and enhanced the platform of services we offer our portfolio.

“With this new fund, we are expanding our firm to take advantage of new investment opportunities arising in the maturing European tech ecosystem.”

Partner Daniel Waterhouse, who will lead the new fund, added, “We have raised this fund now because the time is right.

“Over the past few years, we’ve seen many instances where a lack of liquidity options has become a problem for fast growth companies, which often have a long tail of early shareholders.

“Early shareholders frequently want to release capital for good reasons. We can help them to do that in a way that enables the company and its team to focus on their ambitions without distraction, rewards early team members, and potentially enables the recycling of capital into new startups.”

Previous Balderton investment success stories include Betfair, The Hut Group and Yoox Net-a-Porter.

The firm, which focuses its capital largely on Series A rounds, manages $2.7bn of investor capital.

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