Balderton targets downturn innovation with $430m new venture capital fund

Fresh from making $140m from the sale of Bebo and a “substantial return” on the sale of MySQL, Balderton Capital is announcing a new $430m (£285m) tech and media fund to capitalise on promising business plans thrown up in the downturn – proving that venture capitalists really mean it when they say money is still available for good ideas.

Though private equity is finding it harder to raise money from banks, Balderton assembled most of its new fund from investors in just two months, general manager Barry Maloney told “We are about to enter a very interesting time for new investments, if not for exits. Part of the reason for raising this fund now is to take advantage of the opportunities that this stage of the cycle throws up.” Innovation gets another spurt in times like these, many investors say, explaining that Web 2.0 came off the back of the crash – the £3.91-a-month DVD rental service from one of Balderton’s companies, Lovefilm, looks certain to woo movie lovers spooked buy high cinema ticket prices through the recession., for example.

Balderton, the former Benchmark Europe which spun off from the US venture capital house’s European arm in 2007, profited big from the AOL-Bebo sale and held 15% of MySQL when it sold for $1bn to Sun Microsystems last year. Also in the portfolio – 7digital, Figleaves, Newbay, Habbo Hotel and Adjug. This could also be good news for Setanta as the pay-TV outfit tries to find more funding to fund continued rights acquisition. But Maloney also said the portfolio could take “some casualities” and he forecasts no venture capital-backed IPOs in the next 18 to 24 months.

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