When Toby Rowland began raising money for a new internet firm in early 2003, he found it tough going. “People were actually laughing down the phone when we said, yes, it’s an internet start-up in the games area. A lot of people would not take my call.”

Rowland, now 36, was no novice. The son of Tiny Rowland, the late tycoon famous for his battles with Harrods boss Mohamed al-Fayed, Toby had previously run Clickmango, one of the most high-profile firms during Britain’s short-lived dotcom boom in 1999 and 2000. Even though that was unsuccessful, he bounced back with Udate.com, the online dating service sold for $150m (£86m) in April 2003.

Now he was seeking backing for Midas Player, a site that would allow players to challenge online rivals to games of skill for money.

“It was very, very difficult to raise funds,” said Rowland. “In America, there was more wealth created during the internet boom. People were a little bit hardier about investing during the difficult years. In Europe, there was not very much wealth created, and so people were warier in 2003. They had lost money and felt foolish.”

With help from Mel Morris, the serial entrepreneur behind Udate, Rowland and his business partner Riccardo Zacconi raised enough from angel investors to get Midas Player started, formally launching the site in June 2004.

A year later, the fast-growing Midas Player wanted to raise more money to continue its international expansion. This time, the reception Rowland received from potential investors could scarcely have been more different.

Two months ago, Midas Player received €34m (£23m) from Apax Partners and Index Ventures — a huge sum for a first round of institutional investment in a fledgling business. “It’s a great deal,” said Rowland. “We could have raised more than that. We got quite tired of the process.”

For many in the venture-capital industry, Midas Player’s successful fundraising points to a new appetite for investing in risky technology start-ups.

Doug Richard, the Californian technology entrepreneur who returns to BBC television on Tuesday as one of the Dragons’ Den judges, said: “This is the biggest series-A round (of funding) since I don’t know how long. This is a classic American West Coast play, but it’s happening in the UK.”

In other words, it’s a bold, high-risk move into a sector that still has everything to prove. Think Amazon, think Ebay, think Google. Richard said: “It’s competitive. There’s no defensive position. It’s a great Californian deal carried out in Europe. The point is, deals are happening that would not have happened a year ago.”

Richard, who now runs Library House, a Cambridge firm that crunches information on the venture-capital industry, was struck by the fact that the Midas Player deal was led by Apax. “Apax is making public claims that it has moved out of venture investing, and yet it is making a big, honking investment in this.”

It helped that Midas Player is now facilitating 25m games a month, and has been profitable since January.

Richard, who set up the Cambridge Angels group when he arrived in Britain, said: “I am seeing angel investors spending amazing amounts of money right now. There is something going on here.”

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts