LONDON – As the online revolution gathers pace in Europe, the critical factor for e-commerce companies is no longer underlying enabling technologies but a global business model. Therefore, for e-business ventures, the ability to move rapidly into the United States market is virtually a prerequisite. InSight Capital Partners, an established U.S. venture and private equity group focusing on the business-to-business sectors of the IT industry, says it is ideally placed to help companies do just that.
Roel Pieper, the former executive vice president of Dutch electronics giant Philips, joined InSight as a managing partner last autumn to spearhead the firm’s European operations. He said InSight will shortly hold an initial close on its first dedicated European fund, InSight Capital Partners Europe I, a vehicle slated to amass between $250 million to $400 million (E247 million to E396 million).
InSight, which already manages funds totaling more than $500 million, has always invested a substantial proportion of its capital outside the U.S., venturing into both Europe and Asia, but now, says Pieper, the firm intends to create an organizational model to optimize portfolio leverage between Europe and the U.S. “The notion that we will have separate teams for different geographic sectors is erroneous,” Pieper said. “To take appropriate decisions and define strategies, both for our funds and our portfolio companies, we must act as a coordinated global operation.”
However, unlike Crescendo Venture Management LLC, another recent U.S. entrant into Europe, InSight has elected to raise discrete funds for European and U.S. investments (a $500 million to $800 million U.S. fund is being marketed in parallel with the European offering). This, says Pieper, is purely because many investors prefer this arrangement.
In the U.S., InSight’s portfolio is heavily biased toward business-to-business e-commerce solutions. Pieper predicts that the European fund, while broadly mapping InSight’s U.S. portfolio, will contain a higher proportion of business-to-consumer enterprises, given that this sector is more developed in the U.S. than in Europe. Given its global perspective, however, InSight expects its various geographic markets to synchronize very rapidly. “Within the e-business space, we operate from the absolute conviction that smart ideas are everywhere,” Pieper declared.
InSight’s historic investor constituency is largely U.S.-based. The firm has strong relationships with leading financial institutions such as Goldman, Sachs & Co., JP Morgan and UBS AG as well as corporate investors including Microsoft Corp. and MSD, Michael Dell’s venture vehicle.
The new European vehicle, however, is likely to draw a majority of its capital from European sources, Pieper reports, adding that bringing European corporate investors on board has been a high priority.
The group has formed close links with ABN AMRO, which will play an important role in the European fund. It will also co-operate closely with Gilde of the Netherlands, where Pieper is a member of the Gilde IT Fund’s advisory board.