Stockholm-headquartered private equity investment firm EQT has closed Europe’s largest venture capital fund for early-stage tech start-ups, raising EUR1.1 billion of commitments from institutional investors around the world for its new EQT Ventures III fund despite the adverse macroeconomic climate and the steep equity valuation falls across the tech sector this year.
According to the firm the fund, which drew participation from institutions, foundations, and endowments across Europe, North America, and Asia-Pacific, will make investments of EUR1-50 million in founder-led start-ups that are “using technology to try and solve some of the biggest challenges facing society”.
In a statement, EQT said the focus would be on sectors such as climate tech, food tech, the creator economy, energy, fintech, software, data and IT infrastructure, and deep tech.
“Taking place during a time of market uncertainty, the successful fundraise is evidence that investors still have an appetite for early-stage technology focused funds despite the challenging macroeconomic environment,” said EQT.
The new fund brings total commitments raised across the EQT venture capital fund platform to EUR2.3 billion since launching in 2016. The EQT Ventures funds have completed more than 100 investments in portfolio companies across 16 different geographies – including nine that have reached ‘unicorn’ status with a valuation of over EUR1 billion – and I8 of those investments have been excited. EQT Ventures III has already led investments in 13 companies.
The EUR1.1 billion close of the new fund follows the recent close of the EQT Growth fund, which raised EUR2.4 billion in total commitments. Although EQT Ventures and EQT Growth are both focused on investing in high-growth private tech companies, they are run as two separate business divisions – with separate funds and advisory teams.
While EQT Ventures make initial investments in start-ups of up to EUR50 million, EQT Growth focuses on initial investments of between EUR50-200 million at later stages of companies’ growth journeys.
“Coming shortly after the close of EQT Growth, EQT Ventures’ successful fundraise is a real vote of confidence in EQT’s active ownership approach to investing,” said Per Franzen, head of private capital and deputy managing partner at EQT.
“The capital raised across both funds means EQT has now raised new commitments of EUR3.5 billion to private market tech, consolidating our position as one of the world’s largest tech investors.”
The tech sector has been hammered in recent months – with shares in Facebook parent Meta falling by over 70 per cent this year, and other tech titans such as Alphabet/Google, Microsoft, Amazon, and Tesla also seeing hefty valuation falls amid the worsening market and economic climate.
“Now is the time to back category leaders, those driving innovation to change the world for the better,” said EQT Ventures partner Alastair Mitchell. “EQT Ventures was set up to give founders the best chance of reaching scale, irrespective of the macroeconomic climate.”
With offices in Stockholm, London, San Francisco, Berlin, and Paris, EQT Ventures’ funds are advised by over 40 founders and operators. “We’re a team that have weathered cycles and have experience creating global businesses,” added Mitchell.
EQT said the fund’s portfolio team would be assisted by the group’s proprietary AI market intelligence tool, EQT Motherbrain – which is used to source investment opportunities, and which also provides market intelligence to founders in EQT Ventures’ portfolio companies.
