Despite this, Balderton has identified London and Paris as key innovation centers and continues to invest in AI, albeit with a focus on companies that use the technology to solve specific problems rather than foundational models. The firm's decision not to invest in Paris-based AI startup Mistral was due to the company's need for significant capital, which Balderton believes is better suited to private equity firms or large public companies. The firm's fundraising efforts and investment strategy have been met with mixed reactions from other VCs, with some praising the firm's realistic approach and others urging European VCs to back more significant technology bets.
Key takeaways:
- Balderton Capital has raised a total of $1.3 billion across two funds, with $615 million going to its Early Stage Fund IX and $685 million to its Growth Fund II.
- Research indicates that European VC funds have outperformed their U.S. counterparts over 10- and 15-year periods, according to data from Invest Europe and Cambridge Associates.
- Balderton has made 12 new investments in the past year, but its Europe-only focus has caused it to miss out on investing in major AI startups from Silicon Valley.
- Despite being identified as key innovation centers, Balderton did not invest in London and Paris-based startups, citing the need for these companies to raise significant capital to stay competitive, which is not a good fit for their fund.