Index Ventures, Balderton and Benchmark share in $1bn spoils

Index is again at the heart of a $1 billion exit demonstrating the viability of venture investing in Europe with its sale of open source database software business MySQL.

European managers Index Ventures and Balderton Capital, as well as their US peer Benchmark Capital, are celebrating the sale of MySQL, an open source database business, to IT firm Sun Microsystems for $1 billion.

Index declined to comment on the scale of the return to its investors, though Balderton said in a statement that its 15 percent stake in the company would result in a “substantial return”. 

Index and Benchmark – Balderton was formerly the European arm of Benchmark – were the only two venture firms to participate in a 2003 series B funding of $19.5 million, which suggests their returns will be significant.

Sun’s consideration for the business includes $780 million in cash and the assumption of share options in MySQL’s holding company of $200 million.

MySQL was partner Danny Rimer’s first investment after joining Index Ventures in 2002 to establish the Swiss firm's London office.

The Swedish company makes open-source database software used by companies such as online search leader Google, social-networking site Facebook and Finnish phone maker Nokia.

Rimer said in a statement:  “Index started working with MySQL in 2003 and it’s been exciting for us to watch the company grow as the leader in the open source industry. Now, with the ability to leverage Sun’s global distribution and enterprise support, we look forward to seeing MySQL technology spread even further around the world.”

The sale is the second billion dollar exit from a European venture capital bet in the last few years. Index was also one of the backers of Skype, the voice over internet telephony service, which sold to eBay for $2.6 billion.

MySQL is one of several open source companies in the Index portfolio, others include:  Trolltech, Zend, OPenads and Pentaho.

Index Ventures has also made two venture investments today with a $7 million investment in a series B funding round in ECommerce filter company Criteo and a $15.5 million follow-on funding round into open source server Openads.

Balderton manages approximately $1.5 billion in capital and has backed more than 70 tech companies since 2000.