Smarta backer Birch launches £50m european investment fund

Smarta backer Michael Birch has joined forces with co-founder Brent Hoberman to launch an investment fund aimed at putting European tech start-ups on an equal footing with their US counterparts.

European Founders Capital (EFC) will provide an initial £20m of funding to early-stage tech companies, rising quickly to £50m.

Birch, who sold social network Bebo to AOL last year for £418m, intends EFC to bridge a funding gap that’s previously limited the development of European tech businesses, and catalyse a US-style eco-system where tech entrepreneurs actively look to reinvest in emerging companies.

“We aren’t taking institutional money. All the money comes from founders; people who have done it before,” Birch told today’s Sunday Times.

Birch and Hoberman say EFC will fill the funding gap between business angels who typically invest between £50,000 and £250,000 and VCs, which tend to invest £1m-plus into ideas beyond initial concept stage.

They’re joined by Peter Dubens, who built up the Pipex broadband business sold to Tiscali for £210m in 2007 and Hoberman’s old friend Rogan Angelini-Hurll, the former city analyst who an turned down the chance to co-found Lastminute.

According to Hoberman, who more recently co-launched interiors site, there couldn’t be a better time for EFC to launch:  “We are going to see some great, disruptive companies coming out of this downturn,” he said.

EFC doesn’t yet have a site, but we'll be sure to let you know as soon as it does. For now, here’s our recent interview with Michael Birch.

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