Notion Capital raises $130M growth fund to tackle Europe’s follow-on gap

The deficiency of maturation superior successful Europe is specified a persisting contented that immoderate early-stage firms person taken the substance into their ain hands. London-headquartered steadfast Notion Capital is 1 of them.

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

U.S. VCs that utilized to capable the maturation superior spread presently thin to absorption much connected their ain market, said managing spouse Stephen Chandler, noting that “opens up an accidental for European firms similar ourselves to marque up immoderate of that quality and beryllium existent European champions.” 

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

Notion Capital won’t put successful the infrastructure furniture specified arsenic ample connection models. Instead, the steadfast sees opportunities successful the exertion furniture that volition “massively increase” the 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 volition present beryllium AI-infused, and joined by caller verticals.

The steadfast expects to marque a twelve investments and has already started deploying its superior from the 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 bundle and fiscal products for the aesculapian sector, according to Notion Capital.

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

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

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

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

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

To rise this caller vehicle, which brings its assets nether absorption to implicit $1 billion, the steadfast relied connected its existing relationships with constricted partners from crossed continental Europe, the U.K., MENA and the U.S.

“Something similar 85% of our wealth comes from institutions; and wrong that, we’re precise good geographically dispersed,” Chandler said.

But portion caller initiatives to mobilize semipermanent organization capital  “[weren’t] truly a diagnostic successful this fund,” helium added, “the signs are highly positive, and that’s large [for] addressing that cardinal occupation we started with, successful presumption of immoderate of the gaps successful maturation superior we person successful Europe.”

“If this yet works retired and much LPs enactment successful maturation signifier investing, this could construe into much contention for Notion Capital. At slightest astatine the maturation stage, wherever it is little established than at the aboriginal stage. However, Chandler sees some arsenic a continuum.

“Our existent competitory vantage successful this maturation strategy is leveraging the scope that we person successful our aboriginal signifier strategy,” Chandler said. “Most maturation funds don’t person that. They’re retired determination trying to bash each of their sourcing astatine the maturation signifier erstwhile they enactment their caput supra the parapet successful presumption of standard and momentum.”

In contrast, helium said, Notion Capital has galore interaction points with founders implicit the years, including done its precise progressive level team, and is flexible successful presumption of its cheque size.

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