Britain's answer to Silicon Valley's money men

London's Balderton Capital, the power behind Betfair and Wonga, is pulling the centre of gravity across the Atlantic

Few outside the tech scene will have heard of Balderton Capital, but most people will have heard of at least one of the companies the London-based venture capital firm has backed – LoveFilm, Bebo, Betfair and Wonga.

The investment company, a giant of the European tech scene, is run from an office building in Balderton Street, just off Oxford Street. It has $2.2bn (£1.3bn) in funds under management and the start-ups it has backed in its 14 years of operation are today worth more than $10bn.

Yesterday it raised a new fund – with $305m to invest in small European technology businesses that it hopes will one day be the next Facebook or Google.

"Balderton is one of the key VCs not just in London but Europe and internationally," said Mike Butcher, editor at large of industry website TechCrunch. "European entrepreneurs look to them to help grow and scale to Silicon Valley."

Together with a handful of others, Balderton is powering the current wave of technology- focused entrepreneurialism sweeping across Britain, and is arguably the closest thing Europe has to Sequoia Capital – the Palo Alto investment firm which has helped spawn giants that include Apple, Google, YouTube and WhatsApp.

"As it is now, [Balderton] has one of the best portfolios in Europe, if not globally," Mr Butcher said.

The firm was originally established as the European office of Silicon Valley investor Benchmark Capital, but was spun out in 2007 by the office's founder, Irishman Barry Maloney.

Only three venture capital firms investing in European technology can rival its size – Accel Partners, with €1.5bn (£1.24bn) under management, Index Ventures, which has €2.5bn invested, and DFJ Esprit with $1.1bn under management.

But what sets Balderton apart is that it only invests within Europe, with around a third of its money going to the UK.

"We absolutely believe in Europe," said Bernard Liautaud, a general partner at the firm.

"We see almost 10,000 projects a year. It's grown substantially and the quality of the projects is a lot better than we saw five years ago."

Balderton invests at the very early stage of businesses, and prides itself on picking out winners.

The firm's latest success is NaturalMotion, the Oxford-based games developer whose Euphoria motion engine was used in Grand Theft Auto. The company, which Balderton first spotted in 2006, was bought by the US studio Zynga for $527m at the start of this year.

"By having a clear focus on early stage investments we believe we are creating a substantial competitive advantage," Mr Liautaud said.

Perhaps surprisingly, Balderton's investment team is made up of just 11 people, all of whom have had a hand in building technology businesses themselves. The firm's latest recruit is Suranga Chandratillake, the founder of video advertising firm blinkx, who joined in January.

Balderton lured Mr Chandratillake back from Silicon Valley, where he had been running blinkx for 10 years; when he joined, Mr Chandratillake said that one of the draws was Balderton's ability to "bring the US mindset to European venture exceptionally well".

Like its counterparts across the pond, Balderton invests time as well as money in start-ups. Each partner who leads an investment, which typically ranges between $3m and $5m, also takes a hands-on role, helping teams navigate everything from legislation to product design.

Partners are limited in how many companies they can take on, so as to be fair to their entrepreneurs.

Balderton has already begun investing its latest pot of cash, the fifth it has raised, including investments in two London start-ups – a hotel search engine called Top10; and GoCardless, which lets small businesses accept direct debit payments.

"In a fund we're looking for a couple really great hits – we need to have an investment that can return 10 or 20 times what we put in," Mr Liautaud said. "Then you have some more, that do three to five times; then you have a number where you're going to lose money."

Mr Liautaud said that the technology industry is seeing a fundamental shift away from Silicon Valley and towards a new centre in Europe: "We don't think it's just a moment in time, we think it's a fundamental trend. Every year there are more companies coming out [of Europe] who have grown to substantial valuations."

And within Europe, Mr Liautaud said, "Right now London is leading the way."

Start your day with The Independent, sign up for daily news emails
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Life and Style
Mark's crab tarts are just the right size
food + drinkMark Hix cooks up some snacks that pack a punch
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect