Tech Investors Get Pumped Up In London
by Parmy Olson, Mar. 29 2011 – 10:33 am
London’s start-up scene is bustling with tech entrepreneurs pushing big ideas, but it still lags behind New York, Boston and Silicon Valley when it comes to venture capital funding. But that’s not stopping two stalwarts of venture capital from marching into the U.K. capital, one with money, the other with a new presence.
Passion Capital is a new $60 million fund founded by VCs Stefan Glaenzer, Eileen Burbidge and Robert Dighero, which will invest in early-stage digital and media tech start-ups. They will make roughly 50 investments, averaging about £150-£200,000 at a time, though they’ll go as small as £15-£50,000. About two-thirds of the fund’s capital has come from the British government’s Enterprise Capital Fund plan, which means Passion will focus its investments on U.K. companies.
It represents a next step for the trio of VCs, who have worked together before as angel investors under the name White Bear Yard, which has offices used by some of its start-ups in Clerkenwell, London. Glaenzer was the first investor and executive chairman of Last.FM, which was sold to CBS in 2007 for $270 million.
Burbidge was an investment director in early stage VC Ambient Sound investments which was established by the Skype founding engineers, and she is one of the backers of Peter Sunde’s micro-donation web site Flattr. Dighero used to be CFO of AOL Europe and CFO of QXL/Treadus, which was sold South African media giant Naspers in 2008 for $1 billion.
Meanwhile another member of the European venture capital establishment, Index Ventures, is finally setting up offices nearby, in the start-up hub known as the Silicon Roundabout (photo above).
“Over the last five years many of us have made the 3.2 mile trip between Conduit St. and Old St, countless times,” Index partner Neil Reimer wrote in a blog post yesterday. From now the Index team will have two homes in London–its new digs on Scrutton Street, East London, and its original office in the hedge-fund heartland of Mayfair. Index will be sharing offices with Moo, Groupspace, Lightbox, Soundcloud, SparkPR and Tweetdeck.
Proximity should make a difference. Rimer says the Index team, which includes his brothers Danny and David, already work with businesses in the neighborhood, but they’ll also be holding open office hours to meet new companies and get closer to the teams they work with.
“The shared working space movement in London, which Moo helped to pioneer, has really taken off in the last few years with the formation of places like TechHub and the cluster has continued to form around Old Street,” he adds.
A 2010 report from Ernst & Young showed that the U.K. was the world’s fifth-most popular location for venture capital investment in the first half of last year, after Silicon Valley, Boston, Southern California and New York, and took $815 million in investment. Silicon Valley companies took $4.6 billion in venture capital investment in that same time period.