Fidelity-Backed Venture Firm Raises $375 Million European Fund

(Bloomberg) -- Eight Roads Ventures, a London-based venture capital firm that’s the proprietary investment arm of Fidelity International Ltd., has raised a $375 million fund to help young companies in Europe and Israel grow.

It intends to make an average investment of as much as $30 million, Eight Roads said, in areas such as enterprise software, fintech and digital health.

Fidelity’s shareholders are the sole limited partners in Eight Roads and its sister funds, which operate in other parts of the world.

Since launching its first European fund in 2010, Eight Roads has invested in companies such as Israeli mobile marketing analytics firm AppsFlyer and London-based designer furniture e-commerce site Made.com.

Eight Roads follows other European-based venture capital firms raising larger funds. Last year, Atomico, run by Niklas Zennstrom, raised one at $765 million and in 2016 Accel Partners raised one at $500 million.

"This is driven by the availability of great companies we see all across Europe," Davor Hebel, the managing partner in charge of Eight Roads Ventures Europe, said of the new fund.

Hebel said Eight Roads was looking at companies seeking a Series B or Series C venture capital round, and that had as many as 50 employees but were aiming to grow to 1,000 employees or more.

Eight Roads is also interested in so-called "bootstrap" businesses, which funded their growth from their own sales, but now need additional money to accelerate their growth and internationalize, he said.

There’s less capital to support companies at this stage of growth in Europe and Israel compared with startups earlier in their development, Hebel said. "There’s also a skills gap in Europe in terms of know-how to build scale-up companies," he said.

While Eight Roads’ European venture fund is based in London, Hebel said that in Europe there was no single tech hub where a venture firm could source all of its deals. Instead, he said, great companies could originate from almost anywhere on the continent, in cities as diverse as London, Prague, and Malmo, Sweden.

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