LONDON (Reuters) - A London-based venture capital firm that uses artificial intelligence to find promising start-ups across Europe said on Tuesday it had raised 53 million euros (£46.6 million) for its biggest fund to date.

InReach Ventures was founded by Roberto Bonanzinga and John Mesrie, both previously at Balderton Capital, and Ben Smith, formerly at Microsoft’s teamworking tool Yammer. InReach has spent three years developing its own proprietary AI technology to discover, evaluate and support its investments.

Bonanzinga said European start-ups were scattered across the continent, meaning that many early stage companies did not come to the attention of firms based in major cities like London.

He said InReach Ventures was using AI to sift through and evaluate data, for example from blogposts and similar sources, to identify early-stage companies looking for their first institutional investor.

“Entrepreneurs can found companies anywhere in Europe, from Helsinki to Barcelona, from Warsaw to Rome, and yet many fail to get noticed at the right time,” he said.

“As European venture capitalists, we need a new approach that is distinct and tailored to deal with this geographic fragmentation and economic reality. We believe the only way to achieve this is through a software-based approach, powered by AI.”

InReach had invested in eight start-ups from across Europe since it was founded in 2015, he said, including Lithuania-based marketplace start-up Oberlo, which was subsequently acquired by Shopify.

The fund was particularly interested in start-ups in consumer internet, software-as-a-service and marketplaces, with typical investments of 500,000 to 2 million euros, he said.