Do these 3 things before closing this tab:
1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesBalderton Capital announced $1.3 billion in new funds on August 12, 2024, giving European startups another source of venture capital. But the raise also sharpened a debate: should European investors concentrate on AI applications, or commit the much larger sums that may be needed to build foundational models?
What Balderton raised in August 2024
Balderton announced a combined $1.3 billion commitment to European founders on August 12, 2024. TechCrunch reported the allocation as follows:
| Fund | Amount | Focus implied by fund name |
|---|---|---|
| Early Stage Fund IX | $615 million | Early-stage investments |
| Growth Fund II | $685 million | Growth-stage investments |
The amounts are the breakdown reported by TechCrunch on August 12, 2024; the combined total and Balderton’s stated commitment appear in the firm’s fund announcement.
Balderton partner Suranga Chandratillake said the firm raised the money faster than it had raised previous funds and that about 80% came from existing limited partners—investors in the venture funds. He also said the firm attracted a large U.S.-based institution, which he did not name. That is evidence of support for this particular fundraising, not a measure of all European venture fundraising.
#1 Best Overall
Why the announcement offered some optimism
The fundraise signaled that substantial capital remained available for European companies, including at the growth stage. Balderton’s managing partner Bernard Liautaud put the change in historical perspective in the announcement: the firm said European startups received less than $8 billion in venture investment in 2008, compared with more than $50 billion invested in European tech entrepreneurs in 2023. Those are figures cited by Balderton, not a like-for-like analysis of investment conditions across the two years.
Balderton also cited Invest Europe and Cambridge Associates for a comparison in which European venture funds outperformed North American funds over 10- and 15-year periods. The announcement did not include the underlying returns or methodology, so that should be read as the firm’s cited comparison rather than a complete, independently assessable performance record.
Investors quoted by TechCrunch welcomed the availability of capital, particularly for later-stage companies. Firstminute Capital founder Brent Hoberman said it was encouraging and argued that reliance on U.S.-funded foundational models could be valid. VentureFriends partner Apostolos Apostolakis called for more experienced European growth capital. BackingMinds founding partner Susanne Najafi said additional European growth funds could help startups raise locally rather than depend on U.S. funds.
Why Balderton did not invest in Mistral
Balderton’s absence from Mistral’s investor list was not presented by Chandratillake as a verdict on the French AI company’s quality. He told TechCrunch: “We think Mistral is a great company and there’s nothing negative about the team or their mission.” He described the issue as fund fit.
His concern was the financing path of a company competing to build foundational models. If that work requires repeated, very large rounds, an early investor that cannot keep committing large sums may be diluted or lose influence, including a board seat. Chandratillake said an investor could be “squashed” in the cap table. In his view, that made Mistral a poor match for Balderton’s fund type, not a poor company.
Chandratillake said Balderton believed foundational models mattered and that a healthy market for them was important. He characterized the capital required to build a leading model as “colossal” and suggested that private-equity firms or cash-generating hyperscalers might be better positioned to provide it. That is his explanation of Balderton’s strategy, not a universal rule about which investors can finance AI.
Two different ways to invest in AI
The argument is not simply whether investors believe in AI. It is about what kind of company a fund can support, at what stage, and with how much follow-on capital.
| Investment approach | What the company is building | Capital and fund-fit question |
|---|---|---|
| Foundational models | Models intended to serve as broad platforms for many applications | Can the fund participate in repeated, very large rounds without losing meaningful ownership or influence? |
| Applied AI | Products that use AI to address a more specific problem | Can an early-stage fund back the company as it develops and sells a focused product, without taking on the same model-building financing burden? |
Chandratillake said Balderton expected to direct much of its AI investment toward the second category: “We do think there are a lot of interesting companies that are going to get built that use this technology in different ways to solve very specific problems and that’s where you’ll see a lot of our dollars going.”
Best Value
Balderton said it had invested in European AI companies including Writer, Wayve, and Photoroom, and that AI-first companies made up a substantial portion of investments in its preceding Early Stage Fund VIII. These are the firm’s own descriptions of its portfolio and investment strategy; they do not establish how its investments will perform.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why some European investors still wanted bigger foundational bets
Not every investor saw the financing challenge as a reason for European funds to avoid foundational companies. Andrew J. Scott, founding partner at 7percent Ventures, argued that European Series A-plus managers needed the conviction to back large foundational-technology bets, including AI, space, and robotics. He warned that if they did not, the U.S. could dominate those fields as it had the web, search, and cloud computing.
That position emphasizes strategic capacity: if European funds rarely finance foundational companies at scale, promising companies may need to seek capital elsewhere or build closer ties to non-European investors. The counterargument is that a fund should choose investments that match its size, stage, and ability to keep backing a company. An unnamed venture capitalist quoted by TechCrunch defended Balderton’s decision as a sober portfolio choice, but the anonymous comment carries less weight than the named views.
What the 2024 funding figures do—and do not—show
TechCrunch reported, attributing the figure to Dealroom, that Mistral, Wayve, and Poolside AI together accounted for 18% of European VC funding. That is a figure reported in an August 2024 article, not a current share. The available attribution does not specify the measurement definition or provide the underlying Dealroom data, so it should not be used to infer a present-day market concentration.
Likewise, the $1.3 billion raise shows the scale of Balderton’s two funds in 2024. It does not by itself establish that European investors can match every financing need of a leading AI lab, that European startups will no longer seek U.S. funding, or that Balderton’s approach is the right one for all venture firms. The debate turns on what each fund is equipped to finance—and whether Europe’s investment community wants more funds willing to take on the largest, longest-horizon bets.
Quick Recap
What founders can take from the debate
- Match the investor to the financing path. A company planning to compete in foundational models should ask prospective investors whether they can participate in future large rounds, not only whether they like the product.
- Ask how a fund defines its mandate. A Europe-focused fund, an early-stage fund, and a growth fund may each have different constraints on geography, company stage, check size, and follow-on reserves.
- Distinguish interest from capacity. An investor may believe in a company or technology but still lack the fund structure or capital to remain influential through later rounds.
- Do not treat local capital as the only route. Investors in the 2024 discussion differed on whether U.S. funding for foundational models was an acceptable complement or a sign that Europe needed more ambitious local funds.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
