Editor's Note: This is a guest post by Neil Rimer, Partner at Index Ventures and there is an interview for ArcticStartup at the end.
In 2010, the thirtieth year of SoftBank’s existence, its founder Masayoshi Son outlined the company’s vision for the next 30 years. He first set the context by zooming out to talk about how the world and the needs of humanity would evolve over the next 300 years, and stated his firm objective for SoftBank to survive at least that long. And then, zooming back in, explained that in this context, having a 30-year plan was absolutely essential.
SoftBank took an entire year to develop this vision which combined the output of an unprecedented, company-wide, soul-searching exercise with input from consumers responding to questions tweeted by Son himself. At the company’s annual meeting in 2010, Son articulated a vision based on SoftBank’s underlying mission to harness the information revolution to make everybody happy.
When startups or VC's recruit a new team member, it is normally not newsworthy per say. However when the news has profound implications for the region, such as the time when Max Niederhofer joined Sunstone Capital, this is definitely something to write about.
We were just told that a similar move was made by Chris Barchak, who will be joining the Finland based based Conor VC as a Partner. Barchak was previously a Principal at Fidelity Growth Partners Europe in London and an associate at Index Ventures. Both of them have very respectable portfolios. FGPE has investments in Alibaba, and the Swedish Neo Technology while Index Ventures invested in Facebook, Skype, MySQL and more recently they led €100 million round into Supercell.
Index Ventures has raised a new €350 million venture fund targeting early-stage european companies. With the new fund, Index will make around 30 investments anywhere from a few hundred thousand, to up to 15 million in companies in the seed and series A and B stages. Index also recently raised a Growth fund, which can provide further capital to these companies. All together, Index Ventures is on a roll raising €1 billion over the last 12 months, with separate funds for the Growth and Life Science sectors.
iZettle, the Swedish maker of chip card readers for iPhones and iPads, announces today it has received €25 million in Series B funding. The round was led by Greylock Partners and Northzone. MasterCard, SEB Private Equity and Series A investors Index Ventures and Creandum are also participating in the round. The chip card reader is now being tested in the UK after being available in Sweden, Norway, Finland, and will apparently use the funds for expansion.
Whith the funds, iZettle is looking at the European and world markets, wherever chip-card readers are standard. This targets the company away from the U.S., where a similar company, Square, is located. Currently iZettle has 50,000 users across the Nordics and the UK.
Transferwise, the currency transferring service, has raised $1.3 million (€0.99 million) to expand their team and help bring their service to more currencies. The company was started by two Estonian entrepreneurs, Taavet Hinrikus and Kristo Kaarmann, and is based in London.
The investment was led by IA Ventures, Index Ventures, Max Levchin (co-founder of Paypal) and a group of strategic investors -- such as Errol Damelin, the founder of Wonga. In an interview with ArcticStartup, Co-founder Taavet Hinrikus, the first employee at Skype, described this fundraising as not only a path to expand, but also a strategic way to get the best team together behind the project.
Index Ventures announces today that it has raised a €150 million fund dedicated to the life sciences sector. The fund was raised from several of Index's previous partners, but the fund included large investments from GlaxoSmithKline and the venture capital affiliate of the Janssen pharmaceutical companies of Johnson & Johnson.
Today a new travel startup is launching its public beta, which will allow users to explore destinations, plan trips, and get travel recommendations from friends. I know what you're thinking right now. Social travel? My heart's been broken too many times. I don't know if I can commit. But here's the thing. Many smartphone users are already collecting good bars, restaurants, and photos of tourist sites on their travels through location-based services, which is useful for sharing with friends. Unlike other social travel startups that require you to create new content, Stockholm-based Tripbirds builds off of many people's current habits.
"Where most [social travel startups] fail is getting critical mass because you need some content on the site to make it interesting." says CEO Ted Valentin. "What makes us different is that we're building Tripbirds on top of existing services as a travel layer -- on top of Facebok and Foursquare and Instagram, and even more services in the future."
Lifeline Ventures, also one of the Vigo accelerators, has announced the launch of a €20 million fund for early stage growth companies. The investors in the fund include Pension Insurance Ilmarinen, FoF Growth, Sitra, Finnvera, Troll Ventures, Juuranto Invest and the founders of Lifeline Ventures. We talked to Petteri Koponen, one of the co-founders of the firm to understand more about the fund.
The fund is called Lifeline Ventures Fund I and it has an investment period of 5 years which is included with the 10 years of the overall age of the fund. The first five years of the fund lifecycle will be used to make new investments and the latter five will be used for follow-up investments.
Following the news of last month's €85 million closing of "Sunstone Technology Ventures Fund III," Sunstone Capital announced it has led a $1.2 million round in Gidsy, a Berlin-based startup offering an online service where people can discover, offer and book unique experiences. The round is led by Sunstone Capital and is joined by Index Ventures, Werner Vogels, Peter Read and Ashton Kutcher.
Ben Holmes has been a partner at Index Ventures since 2002, and has been heavily involved with Index's investments in Europe. In the Nordic region he currently sits on the boards of Gray Area Labs, Just-Eat, Rebtel, and Stardoll, as well as Mind Candy, Netlog, Notonthehighstreet, Shapeways in the UK.
He spoke with us to promote their newly announced €500 million growth fund, which will invest in emerging leaders with international ambitions. Below are the notes from the interview:
iZettle, a Sweden based company looking to crack the social payment problem, has closed an 8.2M euro investment from Index Ventures, Creandum and Charles Dunstone, CEO and Co-founder of The Carphone Warehouse. The round was lead by Index Ventures. iZettle's solution is very similar to that of the US leader's in this space, Square. They have an iOS app that users are able to download for free and then use that app, together with a small chip-card reader, to accept and pay for goods and services with your credit card.
We're extremely thrilled to announce that Felix Petersen is coming to Arctic15! Felix founded a successful location based startup, one of the first that got global traction in 2006 and grew it until 2008 when it got sold to Nokia. After that, he spent a few years at Nokia Nokia working at various positions until heading back into the wild to work on his next startup - Amen.
Amen is a startup in stealth mode and not a lot of it is known. However, it is reported that Ashton Kutcher together with Madonna's manager (and Index Ventures) have invested around $2 million into this Berlin based venture.
Earlier this week Grey Area announced a whopping 1.9 million euro series A round from Index Ventures, London Venture Partners and Initial Capital. This is one of the largest single rounds into the Finnish gaming companies in the recent years for sure. What makes this all the better for the whole country and Northern Europe for that matter, is that the financing came from overseas from globally respected investors. Ben Holmes from Index Ventures outlined four reasons why they invested in Grey Area. I think this is a good read for all entrepreneurs to keep in mind if they are looking for venture capital.
Erply, an Estonian startup specialising in providing a wide range of core business services to companies, has received a whopping $2 million in funding from Redpoint, Index Ventures, Marten Mickos, Zack Urlocker, Kenny van Zant, Aydin Senkut, David McClure and the Accelerator Group. The one year old company (founded 2009) has more than 2000 business customers and 8000 users. It is currently profitable with approximately 20% growth each month, according to TechCrunch.
Just recently Mårten Mickos, former CEO of MySQL, joined Index Ventures as an entrepreneur-in-residence. He also serves in a similar position with Benchmark Capital in US. We of course welcome this as a positive news for the European entrepreneurship. But just a little earlier in January Fred Destin and the whole Atlas Ventures packed up and moved to Boston, leaving just enough staff to support to current European investments.
What is going on in Europe? Are we going to see the existing VC model literally disappear? Just last week I came back from DLD conference in Munich, Germany where I talked numerous people influential in the industry from Israel, London, New York and Zurich about the situation on the ground and most concurred that what we used to know as A-round-sized-VC-firms are becoming fewer and fewer. The smart ones are either going towards smaller deals and much more hands-on model or gravitating towards private equity sized funds (not least because of the hefty management fees) ...well, or moving to Boston.
Chip-packaging company Imbera Electronics announced that it raised $15 million from NorthZone Ventures, Index Ventures and Conor Venture Partners. NorthZone led the round. Imbera is the developer of patented Integrated Module Board technology for 3-D semiconductor packaging
Previously Imbera had raised $2 million in a first institutional round and just under $1 million in seed money before that.
The newly raised money will go to kick start a new high-volume manufacturing operation in Sangsong-ri, South Korea, and to continue Imbera’s embedded technology evolution through its R&D activities located in Espoo, Finland.
According to VentureBeat Risto Touminen, Imbera’s chief technology officer, had worked on the technology as a student at the Helsinki University of Technology since 1999.
You can read more about Imbera’s chip packaging technology at VentureBeat here.
It’s good to see a Nordic VC’s Nordic VCs active, when the Venture Capital industry in Silicon Valley is coughing.
Index Ventures, a leading venture capital firm active in venture investing since 1996, has closed a €350 million early stage fund (press release here). Why is this relevant to the Nordics and Baltics? For two reasons.
1) They directly contacted us and told about the new fund, which means that they are very actively looking at the arctic region, among other regions, for investments and wanted to get the message across. So if the product and the team is right, you have same changes of getting into their portfolio as the next guy. This leads to the second reason, which is perhaps the more important one given the times we live in.
2. Here we repeat what we've been saying all along and what got confirmed in the ArcticEvening last week: Now is a great time to invest, which is partly a direct consequence of the fact that in a down-cycle copy cats and weak teams disappear and great ones stand out. There is more talent in the market experimenting with new ideas since they either get layed off or decide to leave in consequence of their steep career advancement stalling. We also reiterate what Creandum said in that those who manage to establish themselves and grow in this climate will prosper further in the better times which eventually come. It might not be easy, but then again for a startup it never is, so really the playing field is just levelled when everybody else is neck deep too. Now you can use the feedback as a real yard stick to measure whether your idea is right or whether it needs more work, or whether you're just working on a completely wrong idea. In good times even the bad ideas get funded as long as you are riding the right wave.
Now, since the feedback is brutally honest (sometimes even too much so), it saves you a lot of time and investors a lot of money. One reason for the lack of new investments is because the venture capital funds are also strugling to raise money from their limited partners (LPs). And yes, why Index Ventures is investing when most of everybody else are pulling back is partly because they can. The truth is that they could raise money in any economy. But this is just because venture capital is the most merit based sport in the world, for both, for startups and for the VC funds themselves. Index can raise money because they have shown that their investors get their money back with generous interest. So just as it might be hard for the startups, it's also hard for the VC funds. And this is exactly why the better venture capital funds just as the better startups see this economy as a great opportunity, when at the same time there are less competent startups and VC funds dying at an increasing rate. In this scenario the latter seem take most of the headlines, but a smart entrepreneur understands this and only increases his focus to navigate his startup in the chaos that was once well functioning economy. The very best entrepreneurs even see the chaos opening massive opportunities and jumps at them.
All things considered, Index Ventures' message from last week's Tuesday is loud and clear.
Index Ventures...with investments in a number of Scandinavian tech companies including Stardoll, MySQL (Sun), Imbera and Trolltech (Nokia), today announced we’ve closed a new seed / early stage fund. Our geographical focus remains the same – Europe, Israel and the US, and we continue to seek deals in the tech space, including enterprise, consumer, mobile and advertising.
I don't think there could be any stronger proof of the fact that it's now or never, than the €350 million early stage fund that Index just raised. The message just can't get more concrete than that. Just as Warren Buffet says "When investing, pessimism is your friend, euphoria the enemy". Index seems to have taken heed.
Time to get cracking people! I know we will.
Saul Klein, the founder of Seedcamp and a partner in Index Ventures, had a little chat with Ville in Le Web about the current economic downturn and what that means for startups. There's a lot that we agree with, for example the focus on the business model - if investors aren't paying you, the customers have to be. Cash is king in times of despair and you need it from someone.
Like always, comments are more than welcome.