Notion Capital Raises $130m Growth Fund To Tackle Europe’s Follow-on Gap

The deficiency of maturation superior successful Europe is specified a persisting rumor that immoderate early-stage firms person taken nan matter into their ain hands. London-headquartered patient Notion Capital is 1 of them.

In 2017, Notion Capital was 1 of nan first successful Europe to adjacent an opportunities fund to supply its portfolio companies pinch follow-on capital. Now, it has closed a $130 cardinal maturation fund, astir doubly nan size of its erstwhile one, that will besides put extracurricular of its portfolio, TechCrunch learned exclusively.

U.S. VCs that utilized to capable nan maturation superior spread presently thin to attraction much connected their ain market, said managing partner Stephen Chandler, noting that “opens up an opportunity for European firms for illustration ourselves to dress up immoderate of that quality and beryllium existent European champions.” 

Some of nan European companies Notion intends to “champion” from its caller Growth Opps III money are tied to nan increasing request for much sovereignty, including those specializing successful defense and proviso concatenation logistics. But for illustration many, nan VC patient is besides drawn to AI, which Chandler sees arsenic a ace rhythm causing “a profound displacement successful nan measurement that package is delivered and consumed.”

Notion Capital won’t put successful nan infrastructure furniture specified arsenic ample connection models. Instead, nan patient sees opportunities successful nan exertion furniture that will “massively increase” nan size of its market, Chandler said. While Notion’s flagship money has historically been known for its beardown penchant for SaaS, cloud, and fintech, these will now beryllium AI-infused, and joined by caller verticals.

The patient expects to make a twelve investments and has already started deploying its superior from nan funds. Deals, to date, see Upvest, a banal trading API retired of its early-stage portfolio, arsenic good arsenic outer companies Octopus Energy spinoff Kraken, and Nelly, a startup that builds package and financial products for nan aesculapian sector, according to Notion Capital.

To springiness itself immoderate “robust objectivity,” successful Chandler’s words, follow-on deals will beryllium conducted by dedicated maturation money partners who will besides “go retired and root maturation shape opportunities extracurricular of nan portfolio.”

One of them is existing Notion Capital partner Stephanie Opdam (on nan near of nan picture). She will now thrust this maturation strategy alongside Jessica “Jess” Bartos, formerly a main astatine Salesforce Ventures. A U.S. national, Bartos is besides Notion Capital’s first outer partner prosecute (previous partners were promoted internally.)

“Because this was a caller strategy, we felt we could use from outer expertise astatine that maturation stage,” Chandler said.

Subsequent maturation costs whitethorn besides beryllium easier to raise. While Europe has suffered from a deficiency of pension costs investing successful task superior firms, incentives person started to alteration successful respective countries, including France pinch nan Tibi initiative and nan U.K. pinch nan Mansion House Accord.

Despite its British roots, Notion Capital isn’t solely limited connected nan U.K.’s regulatory framework; this latest Growth Opps III money is denominated successful euros and Luxembourg-based. 

To raise this caller vehicle, which brings its assets nether guidance to complete $1 billion, nan patient relied connected its existing relationships pinch constricted partners from crossed continental Europe, nan U.K., MENA and nan U.S.

“Something for illustration 85% of our money comes from institutions; and wrong that, we’re very good geographically dispersed,” Chandler said.

But while caller initiatives to mobilize semipermanent organization capital  “[weren’t] really a characteristic successful this fund,” he added, “the signs are highly positive, and that’s awesome [for] addressing that basal problem we started with, successful position of immoderate of nan gaps successful maturation superior we person successful Europe.”

“If this yet useful retired and much LPs participate successful maturation shape investing, this could construe into much title for Notion Capital. At slightest astatine nan maturation stage, wherever it is little established than at nan early stage. However, Chandler sees some arsenic a continuum.

“Our existent competitory advantage successful this maturation strategy is leveraging nan scope that we person successful our early shape strategy,” Chandler said. “Most maturation costs don’t person that. They’re retired location trying to do each of their sourcing astatine nan maturation shape erstwhile they put their caput supra nan parapet successful position of standard and momentum.”

In contrast, he said, Notion Capital has galore touch points pinch founders complete nan years, including done its very progressive level team, and is elastic successful position of its cheque size.

Despite its expanded scope, Growth Opps III’s main plus arguably remains Notion Capital’s portfolio. The patient has invested successful much than 150 startups since its inception, including Currencycloud, GoCardless, Mews, Paddle, and Quantum Systems. While immoderate are pre-AI aliases person been exited, nan remaining companies apt see early champions — a way grounds that should make outer companies much consenting to return their maturation checks, moreover if maturation superior becomes little scarce successful Europe.