Ventech Jams Out of Believe and Drops New Fund Like a Hot Mixtape

Venture capital firm Ventech made headlines recently when it decided to sell its stake in digital music company Believe. The firm cited Believe’s lack of liquidity as a key reason for the move, stating that the company had been “chronically undervalued” as a public entity. This decision marked a significant shift for Believe, as a consortium led by the company’s founder and CEO, Denis Ladegaillerie, along with major stakeholders EQT and TCV, announced plans to take Believe private.

Ventech’s sale of its 12% stake in Believe for €15 in cash per share resulted in a total return of €175 million. This move also proved to be a lucrative one for Ventech, with a 36x multiple return on its third fund, a €150 million vehicle that closed back in 2007. Jean Bourcereau, president and managing partner of Ventech, highlighted the challenges Believe faced as a publicly traded company, despite raising €300 million during its IPO. Bourcereau mentioned that the lack of liquidity hindered Believe’s growth potential, leading to the decision to go private.

Believe’s story is not unique in the realm of VC-backed companies transitioning from public to private ownership. Darktrace, a UK cybersecurity firm that went public in 2021, recently announced its acquisition by private equity giant Thomas Bravo for $5.3 billion. This trend underscores the complexities and challenges faced by companies navigating the public markets, prompting strategic shifts to unlock value and foster growth.

Looking ahead, Ventech has raised an initial closing for its sixth fund, targeting around €225 million. Bourcereau emphasized the fund’s focus on early-stage investments in European tech companies, aiming to support innovation and entrepreneurship in the region. The firm has already begun deploying capital from its sixth fund, backing promising startups like French company Firecell and German real estate management firm Einwert.

As the landscape of venture capital and private equity continues to evolve, the story of Believe and Ventech serves as a reminder of the dynamic nature of the market. Navigating the intricacies of public markets and liquidity challenges requires strategic foresight and adaptability. With its latest fund and ongoing investments, Ventech remains committed to fostering innovation and growth in Europe’s tech sector, supporting the next generation of industry disruptors.