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European venture fund Index Ventures is best-known for lucrative exits on its early-stage investments in Skype Technologies, Last.fm Ltd. and MySQL AB. Now, the firm will target expansion-stage investments with a new €400 million ($585 million) fund that could give it a second chance on missed opportunities.

"We will at times be investing in companies we looked at on the early-stage side, but passed on," says partner Dominique Vidal (right), who will join two others in leading the firm's later-stage practice. Some of the firm's deals may even provide liquidity for seed-stage investors, although Vidal says the firm will not perform debt-leveraged deals, as rival firm 3i Group plc does from its private equity fund. Average investments will range from €20 million to €50 million, many times the size of the firm's traditional investments.

Vidal also notes that European startups culturally are conditioned to seek trade sales rather than IPOs and often are at a loss for later-stage capital when planning international expansion or inorganic growth. Index's fund will support companies that wish to remain independent, continue their growth pattern, expand into new markets and make acquisitions, he says.

Although last week's billion-dollar acquisition of MySQL by Sun Microsystems Inc. represented another happy ending for Index, many bloggers have in recent days noted the struggles of portfolio company Joost Operations SA. The video startup, founded by Skype co-creators Niklas Zennstrom and Janus Friis, reportedly fired its chief technology officer, prompting others to wonder what's gone wrong since its $45 million Series A round in May 2007. Meanwhile, GigaOm's NewTeeVee takes a more optimistic tone by suggesting Five Ways to Save Joost. - Paul Bonanos

See Jan. 22 press release from Index Ventures
See Sept. 13 profile of Index's Danny Rimer from Tech Confidential
See February 2007 post from Tech Confidential
For more see TechCrunch and paidContentUK

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