(Bloomberg) — Investment firm Coatue Management is closing its European office in London two years after it opened, part of a strategy overhaul to adjust to a downturn in the technology market.
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In an internal memo, the fund’s leaders described the decision as an effort to “streamline” its investing approach, prioritizing domain expertise over regional coverage. “Our commitment to European ventures remains steadfast as you would expect from a firm with three European leaders,” read the message, which was viewed by Bloomberg News.
Sarah Cannon, Coatue’s general partner in London, plans to leave her role and stay in the UK, according to the internal message. She will become an adviser to the fund.
A spokesperson for Coatue confirmed the moves, but declined to comment further. Cannon also declined to comment.
The New York-based firm, led by Philippe Laffont, began more aggressively investing in startups with a new growth fund in 2021. In the decade since it started venture investing, Coatue’s backed about 100 companies during a venture capital frenzy.
It has changed tactics after tech valuations collapsed from lofty heights. Coatue’s $7.7 billion growth equity fund saw a roughly 30% paper loss following markdowns of several startups, Bloomberg News reported in November. Coatue also raised a $1.4 billion companion fund that will let its investors back startups at a discount in exchange for a fee break, an unusual move for a VC.
Coatue opened its European offices in 2022, hiring Cannon, a former Index Ventures investor, as its partner in the region. The firm backed some high-profile UK and European startups, including Monzo Bank Ltd., Checkout Ltd., Stability AI and N26. Coatue was also an early backer of Spotify Technology SA and UIPath Inc., two rare European tech companies to list publicly.
But Coatue made few major European bets in recent years as deal opportunities shriveled. Funding in later-stage startups from major crossover investors like Coatue, which back both public and private companies, fell to a four-year low in Europe in 2023, according to a recent report from venture firm Atomico. Omers Ventures, the Canadian venture capital firm, pulled out of Europe in August. New PitchBook data showed that the value of startup exits in Europe in 2023, at €11.8 billion ($12.9 billion), was the lowest amount in a decade.
Still, some investors are expanding in the continent. Two prominent California venture funds, IVP and Andreessen Horowitz, opened London offices in 2023 with plans to invest more in Europe.
(Updates with details on Coatue’s growth fund and PitchBook data in starting in fifth paragraph)
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