Balderton secures $600M for early-stage European fund

London-based VC Balderton Capital has raised $600 million for its largest-ever early-stage vehicle, as it looks to complement its growth fund and capitalize on Europe's maturing startup ecosystem.

The oversubscribed vehicle is 50% bigger than its predecessor, Balderton VII, which raised $400 million in 2019. The firm will continue its strategy of investing in 25 to 30 companies at the seed and Series A stages, with the intention of making follow-on investments in later rounds.

"The market is mature and as a result it can give birth to, and grow, extremely large companies," Suranga Chandratillake, a partner with Balderton, told PitchBook. "So there is an opportunity and a need to fund those companies healthily throughout their journey."

The fund is intended to work in tandem with the firm's $680 million growth fund, which launched in June, and will be available to make follow-on investments at the Series C stage and beyond. According to PitchBook's Q3 2021 European Venture Report, late-stage VC deals have dominated in the region, accounting for 73.6% of the €73.7 billion (about $83 billion) in total VC deal value recorded through Q3.

"We are a high-conviction, relatively low frequency investor," added Chandratillake. "We don't make that many new investments in any given year, but when we do find a company that we think we can help (and who would like our help), then we love to go deep and really engage to give them the capital they need, and also the time and support they need."

Balderton has backed 20 new startups so far this year and has also seen 13 of its investments reach unicorn status in 2021. Among its unicorns are content management platform Contentful, ecommerce business Depop, and fintech startups GoCardless and Revolut.

For the latest fund, about 80% of the LP commitments are from those who have re-upped from the firm's predecessor vehicles, with much of the remainder coming from educational and charitable endowments. In terms of geography, as much as 65% of the LPs are European, with around 30% coming from North America and the rest from elsewhere.