Make way for more money into the startup investing pool: today, Index Ventures announced that it has closed a total of $1.65 billion in new funds — $1 billion that it plans to invest in later-stage, growth rounds, and $650 million that it plans to put into earlier rounds for smaller startups.
The venture fund is Index’s ninth; the growth round is its fourth since it was founded in 1996.
The funding is significant for a couple of reasons. Index is one of Europe’s (and America’s) most prominent investors, backing recent hits like Adyen, Dropbox, iZettle, and Zuora (all of which have now either gone public or, in the case of iZettle, been acquired), so its backing has become something of a signal for quality (similar to a number of others, it should be noted).
The funding is also notable because of the size of it. To date, Index has raised $7.25 billion over the years, using that money to seed and grow hundreds of startups, helping to fuel — alongside the growth of the internet and technologies like mobile — what has become a veritable tech boom over the last couple of decades.
But even within that longer trend, more recent years have seen an even bigger infusion of venture funding into the tech ecosystem, with outsized backers like Softbank bringing together syndicates of tech titans to bring in tens (and even hundreds) of billions of dollars into the mix.
The strong returns that the very biggest startups deliver — the world’s most valuable companies today are dominated by tech names — has led to even more money pouring into the sector. This latest $1.65 billion from Index is a leap on its previous growth and venture fund close: in 2016 it raised $1.25 billion ($550 million for venture and $700 million for growth), which at the time seemed huge and now seems almost modest.
All this, in turn, is leading to a big shift in how startups are evolving. The most highly capitalised are staying private for longer, because private money is much easier to come by than it was before: this means large growth rounds, more secondaries for investors to get their returns, and longer cycles before “exits.” In that vein, it’s notable that Index has raised $1 billion for growth investments.
Index says that the money in this fund will be going to some of the biggest names in its stable already, including the likes of Aurora, Bird, Deliveroo, Elastic, Farfetch, Robinhood, Revolut and Slack. (In other words, if you didn’t already know about the startups in this list raising even more money… you do now.)
The firm now has 21 on its investment team, but with only one woman among its nine investing partners — Sarah Cannon.