Betfair brings big win to Index, while Danish VC firm shuts doors

The two sides of European venture capital are on display this week in London and across the turbulent North Sea in Denmark.

The launch of Betfair Group Ltd.’s IPO on the London Stock Exchange could bring a jackpot of riches to investor Index Ventures. The newly minted shares of the online betting site rose 19% when they were issued on Friday and held the gain today.

[contextly_sidebar id=”q1GS3w8SgXZqpY8GE67hFT9oGFurnqZ6″]Index, a long-time investor, sold 493,000 shares in the offering and continues to hold 2.3 million, according to The Wall Street Journal. That means the firm is holding a potential gain of 35 million pounds. Betfair’s investors also include SoftBank Corp. and the European VC firm Balderton Capital.

In contrast, the Danish venture firm Inventure Capital’s decided to shut its doors. The firm tried unsuccessfully to raise a new fund, according to local and international news reports.
Betfair
Betfair logo is seen behind a keyboard, gambling dice and chips in this illustration taken in Sarajevo, September 10, 2015. REUTERS/Dado Ruvic

Inventure was one of the largest venture firms in western Denmark with portfolio companies in life sciences, information technology and cleantech.

The closure should not be a big surprise. European fundraising can be as difficult as it is in the U.S., in part due to a structural challenge, say some experts.

Public money has increasingly become the main source of financing for European venture capital, the European Private Equity and Venture Capital Association notes in a March report. As a result, funding is thinly spread across too many funds, the report says.

If it is correct, a natural retrenchment seems in order – even while some firms bask in the riches.

Photo: Betfair logo is seen behind gambling dice and chips in this illustration taken in Sarajevo, September 10, 2015. REUTERS/Dado Ruvic