Highland Europe secures €1bn fund

Venture capital firm, Highland Europe, has closed a new €1 billion fund to support start-ups, despite the ongoing slowdown in the technology industry.

The new fund brings Highland Europe’s total capital raised to €2.75 billion and will be used to finance private software and consumer internet companies across Europe. The 40% expansion of the fund size indicates confidence from the group’s limited partners in its performance, despite the overall deceleration in the venture capital and technology industry.

Investment in private technology markets has decreased after reaching a high point during the pandemic. Last year, €91.6 billion was invested in European start-ups, a decline of about 16% from the prior record-breaking year. Rising interest rates and the decline in the value of public technology stocks have led to a reassessment of start-up valuations and shifted investment opportunities.

Highland Europe, which was spun off from Highland Capital Partners in 2012, has backed companies such as WeTransfer, Huel, and Contentsquare. It was also a backer of food delivery start-up Wolt, which was acquired by DoorDash in 2021 in a deal valued at €7 billion. The firm has also promoted David Blyghton to partner.

As venture capitalists struggle to close new funds, they have become more cautious about investing in cash-burning technology groups, leading to a broader re-evaluation of prices for start-up shareholdings. This week, it was reported that Chinese fast-fashion retailer Shein is in talks to raise funds at a valuation of $64 billion, down from a peak of $100 billion last year.

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