In a sign of continuing venture capital interest in young firms despite the economic downturn, Index Ventures has raised $441 million for an early stage technology fund, its fifth in 10 years.
Index Ventures V will focus on early investments in the technology, biotechnology and cleantech sectors in Europe, the United States and Israel.
The fund was raised almost entirely from the Swiss-based group’s existing base of limited partners.
Index raised $460.8 million for its fourth fund in 2006 and followed that up with $585.3 million for its first growth fund, Index Ventures Growth I, last year, according to Thomson Reuters (publisher of VCJ).
Index, best known for backing Internet phone-calling leader Skype Technologies before it was bought by online auction house eBay Inc. for $2.6 billion in 2005, has invested in a range of up-and-coming technology and biotech companies.
Other portfolio companies include Swedish open-source database firm MySQL, which was sold to Sun Microsystems for $1 billion; British online betting group Betfair; and Danish antibody drug specialist Genmab.
Partner Francesco De Rubertis said the recession was causing “natural selection” among startups by killing off those companies that lacked original or disruptive technologies.
The dire economic backdrop has also hit valuations.
“It is a great moment [to invest],” he said. “There are not of lot funds that are fully financed and that gives us some competitive strength.”
About 60% of the new fund is expected to go into IT startups, with biotech making up most of the remainder and cleantech accounting for a relatively small proportion.
The typical investment size will be between $6.3 million and $19 million.
Index also announced that Ben Holmes, a London-based member of the technology team since 2002, had been named a partner of the firm. Holmes focuses on investments in consumer and Internet infrastructure companies and currently sits on the boards of Mind Candy, Netlog, Playfish, Rebtel and Stardoll. —Ben Hirschler, ReutersDEALWATCH: Five recent investments by Index Ventures 7TM Pharma A/S_Small molecule drugs targeting G-protein coupled receptorsFon Wireless Ltd._Network of shared Wi-Fi connectionsGlycoVaxyn AG_Vaccines that target bacterial infectionsRightScale Inc._Automated management platforms for cloud computingUndisclosed Company_Media company specialized in puzzles
Note: Investments made between November 2008 and March 2009.
Sources: Thomson Reuters