UK Markets open in 4 hrs 16 mins

Revolut backer Index raises $2bn to invest in startups at 'unprecedented time'

Edmund Heaphy
Finance and news reporter
Jan Hammer of Index Ventures speaks in Berlin in 2017. (Noam Galai/Getty Images for TechCrunch)

Index Ventures, an investment firm known for backing iZettle, Skype, Slack, and Revolut, said on Thursday that it had raised $2bn (£1.6bn) across two funds to invest in “ambitious” entrepreneurs, even as the coronavirus pandemic roils the startup world.

“Innovation is often born out of adversity,” said Index partner Jan Hammer, noting that the firm remained “committed to investing in ambitious entrepreneurs at this unprecedented time.”

Index, considered one of the biggest names in venture capital, raised $800m for its tenth early stage fund to invest in fledgling startups. It raised $1.2bn for its fifth growth-stage fund, which will focus on later-stage companies.

The VC firm, which has joint headquarters in New York and London, did not disclose how much it had intended to raise.

Index said that it will focus on investments in companies that are “transforming the way we live and work,” as well as those working on enterprise infrastructure and artificial intelligence.

Read more: Bank of England to finance additional UK government spending during crisis

Index’s current investments span 24 countries and also include Deliveroo, Glossier, and Robinhood.

The firm noted that the launch of its new funds follows an especially active period during which nine of its portfolio companies — including payments giant Adyen and workplace messaging platform Slack — filed for initial public offerings (IPOs).

“The path to building a great company is not a straight line, with many obstacles and forks along the way,” said Hammer, reflecting optimism about the technology industry’s future after a particularly brutal few weeks for investors.

Read more: UK economy shrank before full force of coronavirus crisis hit

Venture capital firms around the world have pulled back from investments in startups, citing volatile market conditions and plummeting valuations due to the pandemic.

The economic climate has been particularly tough for early stage startups, many of which have yet to generate revenue and have little runway to survive a severe downturn.

Index on Thursday thanked its own backers — the limited partners known as LPs — for their investments.

“Many of them have been with us for two decades, and we’re especially thankful for their continued commitment in times like these,” said Index partner Mike Volpi.