A venture capital company (VC) based in Europe is gaining attention in Silicon Valley, USA, as it has invested large amounts of funds in promising startups in the U.S. early on and has recently earned significant revenue.
On the 4th (local time), The Wall Street Journal (WSJ) reported, "With the venture market facing difficulties in cashing out recently, several startups are going public or being sold, increasing the likelihood that Index Ventures and its limited partners (LPs) will earn more than $11 billion in revenue."
Index is a venture capital (VC) firm that was established in Switzerland in the 1990s and later moved its headquarters to London, UK. The U.S. design software company Figma, in which it invested, went public on the New York Stock Exchange on the 31st of last month, allowing Index to recover about $10.8 million (approximately 149.6 billion won) in cash. At that time, Index sold about 5% of its holdings at $33 per share and still owns over 15% equity.
Index formed a relationship with Figma when partner Danny Rimer met Dylan Field, the co-founder and CEO of Figma, who was then 19 years old, at a startup presentation in 2012. Although Figma had only two employees at that time, Index was impressed by the browser-based design tool demonstration showcased by Field the following year and invested $1.8 million (approximately 2.5 billion won) in Figma.
Supported by Index, Figma grew into a corporation with a market capitalization of up to $43 billion (approximately 56 trillion won) through this IPO after experiencing the setback of Adobe's failed acquisition in 2022. It is reported that Index secured approximately 12% equity in Figma during its early stages.
WSJ noted, "Index continued to invest and support Figma despite the years it took to launch its products and the crisis of Adobe's $20 billion (approximately 28 trillion won) acquisition proposal failing due to regulatory issues."
In recent notable merger and acquisition (M&A) transactions in Silicon Valley, including Meta's acquisition of AI training data company Scale AI and Google's acquisition of cybersecurity startup Wiz, Index has also generated substantial revenue. Index received more than $1.4 billion (approximately 2 trillion won) in the process of Meta acquiring a 49% stake in Scale AI, and it is estimated that the value of Index's stake in Wiz will reach approximately $4.3 billion (approximately 6 trillion won) once Google's acquisition of Wiz is completed.
Index recognized potential and invested in Figma, Scale AI, and Wiz when they were just small startups. WSJ explained, "This year, Index's revenue is small in scale but overwhelming in performance," and added, "Thanks to investing in all three companies from their early stages, it was able to reap substantial revenue."
Index's recent investment performance is being evaluated as surpassing that of Sequoia Capital, a prominent venture capital (VC) firm in Silicon Valley. While Sequoia also invested in Figma, its equity holdings are lower than those of Index. Its stake in Wiz is also smaller than Index's, and it did not invest in Scale AI at all.
Hussein Khan, founder of London-based VC Hoxton Ventures, said, "It is very rare for an outsider to enter Silicon Valley and to gain prominence this quickly."