One of London’s best-known venture capital firms has raised a new $375m (£281m) fund as it goes on the hunt for Europe’s answer to Google, Amazon or Facebook.

Balderton Capital, which has backed the likes of LoveFilm, Citymapper and Wonga, said the Continent’s technology sector had reached a “pivotal moment” that could produce a company with the scale to rival the Silicon Valley giants.

Suranga Chandratillake, a partner at Balderton, told The Daily Telegraph that, while it was hard to predict what area of tech the next giant would come from, artificial intelligence “looks like a pretty good bet”.

He said: “Many of the best research departments are based on this Continent. Many of the best students, wherever they’re from in the world, come through that system, and many of those people want to stay here.”

Mr Chandratillake said Balderton’s sixth fund, its first since 2014, had ­attracted new backers from the US and the firm’s first investor from Asia, as global institutions clamoured for a slice of Europe’s burgeoning tech scene.

That’s partly a reflection of how the Continent’s start-up “ecosystem” has improved, said Mr Chandratillake, but is also because VC firms can pay less for higher equity stakes than they would in the US.

The sector has benefited from improved regulations and government support, he said, but the biggest boost has come from a decline in the popularity of finance and civil service jobs since the financial crisis.

“Banking is a lot less attractive to a generation of millennials who question exactly how the banks do what they do,” he said.

“At the same time, there was this ­ascendancy of technology entrepreneurship and this idea that, actually, this is something where you can be successful, you can make money, but you can also feel that you’re actually doing something for good.”

Balderton, which typically makes ­investments of £3m to £7m, has $2.6m under management and has backed 10 companies since March.