Accel Partners, the investment firm that backed Facebook Inc. and Groupon Inc., is seeking $450 million for its next European venture-capital fund, according to two people familiar with the matter.
Accel London IV LP expects to hold a first and final close by March, said the people, who asked not be identified because the plans are private. The amount sought is less than the $525 million the firm gathered from investors for its prior fund (PEF2127:US) in 2008. Rich Wong, a partner at Palo Alto, California-based Accel, declined to comment on the fundraising.
The London unit of Accel is part of a small group of European-focused venture-capital funds to attract demand as investors have historically opted for U.S.-based teams that can put their Silicon Valley connections to use. In 2012, there were 84 North America-focused venture-capital funds that raised $19.5 billion, compared with 26 Europe-focused funds that gathered $2.5 billion, according to data from London-based researcher Preqin Ltd. Fundraising for venture investing in Europe fell almost 55 percent from 2011, according to the data.
Accel has gained most of its recent acclaim for investments in the U.S. from its Silicon Valley team. That includes turning a multibillion dollar profit on an early Facebook Inc. (FB:US) bet as well as gaining from the initial public offerings of Groupon Inc., Fusion-io Inc. and Trulia Inc.
The London team at Accel profited from last year’s IPO of Kayak Software Corp. and its subsequent announced sale to Priceline.com Inc. for $1.8 billion. The unit also backed Playfish Inc., which was purchased by Electronic Arts Inc. in 2009, and Amobee Inc., bought last year by Singapore Telecommunications Ltd. Current bets include online lender Wonga.com Ltd. and music startup Spotify Ltd.
Since 2001, Accel London has raised three Europe-focused funds ranging in size from $450 million to $530 million. The firm also has a $65 million fund in India and a joint venture with IDG Capital Partners in China.
The new fund from Accel London will invest across all stages mainly in the information technology, software, Internet and consumer sectors in Europe and Israel, said one of the people. It expects to allocate about 75 percent to early-stage and 25 percent to late-stage deals, according to the second person familiar with the matter. About 20 percent of the fund’s capital is expected to go to U.S. deals while the remainder will be in Europe and Israel, the person said.
The London team lost a member of its investment team last year, when Adam Valkin left to join General Catalyst Partners, a Cambridge, Massachusetts-based venture firm. Accel’s website lists 11 people as part of its investment team in London.
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