Index Ventures fund eyes maturing European tech

By Ben Hirschler

DAVOS, Switzerland (Reuters) - Europe's technology sector is coming of age and Swiss-based Index Ventures, one of the region's leading Internet investors, aims to cash in with a new fund backing firms considering acquisitions.

The venture capital firm said on Tuesday it had closed a new 400 million euro ($586.3 million) fund focused on growth of existing tech companies -- the first of its kind in Europe -- and had added two new partners to its investment team.

The move takes the group's funds under management to around 1.5 billion euros.

Co-founder Giuseppe Zocco, speaking ahead of the start of the World Economic Forum annual meeting, said Index was leading the way in targeting such later-stage opportunities but predicted others would follow suit.

"We're going to be the first in Europe but we expect others to follow because the opportunity is pretty clear. We hear rumors that there may be another one or two more coming along this year," he told Reuters.

Best known for backing Web phone-calling leader Skype before it was bought by online auction house eBay Inc (EBAY.O), Index has also invested in a range of other up-and-coming technology and biotechnology firms.

Zocco said it aimed to maintain that broad approach with the new Index Ventures Growth I fund, which is expected to make investments of between 20 million and 50 million euros in European-based companies.

It may also consider companies in eastern Europe and the United States that have plans to expand internationally.

Typically, those firms will have already built small but successful businesses and reached the stage where they are considering acquisitions to accelerate growth to the next level.

The recent credit crunch may play in Index's favor by encouraging some entrepreneurs to look for fresh equity, rather than attempting to tap the debt markets, Zocco believes.

"There is a temporary bias towards equity, which will help us. But the strategy is not dependent on the conjuncture right now -- it's a very sound long-term strategy," he said.

The two new team members working on the growth fund are Dominique Vidal, previously CEO of Yahoo Europe (YHOO.O), and Guido Magni, former head of medical science for Roche Holding AG's (ROG.VX) pharmaceutical division.

(Editing by Sue Thomas)