Two-thirds of investments to focus on emerging technologies such as virtual reality
Partech Ventures, the France-based investment firm, has closed a €400m fund to invest in European and US technology start-ups, amid signs the funding freeze following the UK’s vote to leave the EU is beginning to thaw.
The fund is the seventh of its kind from Partech and is being backed by the European Investment Fund, a public-private partnership in the EU, and Bpifrance, France’s sovereign wealth fund. It has also attracted corporate investment from the French lottery, Accenture, Cisco Systems, Nokia, Adecco, L’Oréal and Unibail-Rodamco.
Jean-Marc Patouillaud, co-managing partner at Partech, said the fund differed from others of its kind because it would invest in both Europe and the US. Two-thirds of its investments will focus on European start-ups developing emerging technologies such as virtual reality, blockchain and drones, he said, while the rest will go into companies in Silicon Valley, where Partech also has an office. "We make 70 per cent of our exits in the US and so [it is important to have a presence there] so we can find exit opportunities. It is very important to select the best deal by benchmarking on a worldwide basis rather than just focusing on a single continent or country."
European tech funding slowed sharply after the vote for Brexit in June 2016. Start-ups that already lag behind counterparts in the US and Asia in attracting early-stage investment saw venture capital investment drop by a third in the third quarter, according to Dow Jones VentureSource. But this year a number of large venture capital groups have launched multimillion-dollar funds focused on the sector. Last month Brent Hoberman, co-founder of lastminute.com raised $60m to invest in technology start-ups across the region. In February, Atomico closed a $765m European tech fund to help new businesses expand.
However, Brexit continues to cast a pall over venture capitalists concerned about the movement of skilled entrepreneurs into and out of the UK, access to the single market and licensing and regulations for UK-based start-ups.
Mr Patouillaud said Partech, which manages €1.2bn of assets, has shelved plans to open an office in London until the outcome of Brexit negotiations. It has hubs in Berlin, San Francisco and Paris. “We were contemplating [opening a London office] when Brexit happened,” he said. “If we open in London we want to be sure that there is enough of a talent pool. Then there is the question of hard or soft Brexit . . . you can understand [our decision will depend] on the answer.”