Eight Roads on course with second fund–VCJ fund profile (CORRECTED)

By Alex Derber, VCJ Correspondent

Fidelity International Limited has been active in European VC since before the first dot-com boom, but waited until 2010 to launch a $150 million fund dedicated to the region.

With Fidelity International Limited’s proprietary investment activities now consolidated under its new Eight Roads name, a second, $250 million technology fund has just been signed off for Europe.

“European venture was viewed as a poor asset class, but we believed with our first fund that there was more to Europe than met the eye, and over time others have come round to that view,” said Davor Hebel, a partner at Eight Roads, previously known as Fidelity Growth Partners Europe.

London-based Eight Roads retains its predecessor’s focus on Series B, Series C and expansion-stage deals, with its current portfolio derived fairly evenly from late-stage venture and growth equity transactions.

Whereas Fund I targeted consumer and enterprise tech companies, its successor aims to make fintech a third pillar of competence.

Hebel also confesses to a budding interest in industrial technologies.

Eight Roads’ sweet spot for venture remains at about $5 million, though the firm is prepared to write checks under $1 million and go up to $25 million for growth equity deals.

A case in point was Fund II’s maiden investment in July, when Eight Roads participated in a $60 million growth round for furniture seller Made.com.

Two other, as yet undisclosed deals have been finalized since then.

A feature of European VC has been the growing involvement of American funds, especially in the later rounds.

In January, for instance, Andreessen Horowitz led a $58 million financing of British fintech company Transferwise. The round also included European investors Index Ventures and Firestartr, among others. Hebel notes that more than half the funding for London tech businesses like Transferwise last year is thought to have come from the United States.

Still, Hebel welcomes more involvement in European VC to help it mature.

“We need more VCs, more entrepreneurs, and more executives who can actually scale companies past that first stage,” he said.

Correction: An earlier version of this story mistakenly connected Eight Roads with Boston-based Fidelity Investments. Eight Roads invests the capital of Fidelity International Limited, which has no footprint in the United States and is a separate business.

This story was written by Alex Derber, a U.K.-based contributor. He can be reached at alexderber@hotmail.com.

This story first appeared in affiliate magazine Venture Capital Journal, which is published by Buyouts Insider. Subscribers can read the full story by clicking here. To subscribe to VCJ, click here for the Marketplace.

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