Venture capital firm Index Ventures has raised $3.1 billion toward helping new businesses started during the COVID-19 pandemic, of which there were around 4.4 million in the U.S. alone, a company blog said Thursday (July 22).
The release said booms in new businesses also occurred in the U.K., France, Germany and other countries.
The money will be split between the early stage fund Index Ventures XI with $900 million, the growth fund Index Ventures Growth VI with $2 billion and finally the seed fund Index Origin with $200 million.
In an interview with partners Mike Volpi and Jan Hammer, they espouse on what they intend to do with the money. Hammer said helping to fund new businesses was important, particularly after shake-ups in the world like the 2008 financial crash or other geopolitical events.
“[E]very single one of those shake-ups has resulted in a greater and deeper bench of new initiatives,” Hammer said. “It’s really provided a springboard to more innovative businesses—and downstream for investors, those new companies have provided an investment opportunity. So if the past is any indicator of what’s to come, I would say there will emerge a new cohort of more amazing companies out of this crisis than really anything we’ve seen before.”
Volpi said they would likely be seeing “innovation happening in unexpected places.” But he said there could be a shift in the selling point for new companies looking at venture capital.
“The next generation of entrepreneurs is looking for expertise and personal relationships with their investors, where we become partners, advisors, mentors and coaches,” Volpi said.
Asked what the funds would be used for, Hammer said they were looking for the “people dimension,” or “for authentic entrepreneurs building mission-driven businesses, playing into ever-larger or ever-expanding markets.”
“We want to support creative founders who are building technology in a smart way to provide great products and services to the economy,” he said.
Mark Fiorentino, principal with Index, recently told PYMNTS that the movement in the U.S. to digital or alternative payments might be picking up steam. This is because of COVID-19, but also because of the “changing of the guard” that comes with generations, he said, which will see shifts in spending.