June 18, 2012 / 1:21 AM / in 5 years

Index Ventures raises 350 mln euro tech fund

SAN FRANCISCO, June 17 (Reuters) - Index Ventures said it raised a 350 million euro fund - about $441 million - to invest in seed and early-stage technology companies.

The fund will make investments in the $10 million range in roughly 40 companies, focusing on Berlin, London, New York, San Francisco, Stockholm and Tel Aviv.

Index looks for companies with differentiated products going after a big market - $1 billion plus, said partner Mike Volpi in an interview. But most important to Index is the entrepreneur.

“We look for people who can figure their way around things,” he said. “That have leadership skills, that are analytical, and passionate.”

Index is perhaps best known for backing Skype, now owned by Microsoft Corp, at its early stages. Other investments include mobile-payments company Boku, online-music service Lastfm, and online-storage company Dropbox.

Earlier this year, Index launched a 150 million euro life-sciences fund. In November, Index said it was raising a 500 million euro fund for later-stage investments.

The firm focuses heavily on Europe even as the region struggles with issues including insolvent banks, high levels of sovereign debt, and the possible collapse of the euro.

“The best time to fund companies is in down cycles,” said Volpi. Because potential competitors are pulling back and perhaps not spending to expand their businesses, “the ones that get funded have a little bit more of a clear playing field.”

The new fund has already made one investment: an enterprise-software company in the United States that Volpi declined to name.

For the venture-capital industry overall, the current climate is mixed. Many investors are complaining about poor returns, even as a handful of strong exits - initial public offerings or acquisitions - are allowing a small group of funds to do extremely well.

Despite its poor performance in public markets, Facebook’s IPO, for example, was a bonanza for Accel Partners, Greylock Partners, Meritech Capital and a few others.

Venture capital funds raised $4.9 billion in the first quarter, down 35 percent from a year earlier, according to the National Venture Capital Association and Thomson Reuters.

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