By Eric Auchard
FRANKFURT (Reuters) – British venture capital firm Notion Capital is raising a third fund that will make it Europe's largest bankroller of cloud-based business software start-ups, the company said on Thursday.
The London-based firm said it had initially raised $120 million in a new fund for cloud computing & Software as a Service (SaaS) companies & is targeting upwards of $150 million once fundraising for the round closes after this year.
p> Collectively, Notion's three funds will have raised approximately $300 million to provide capital to early-stage firms in Britain & across Europe.
Notion Capital aims to fill a void for fast-growing start-ups that have fewer options for public market listings than their U.S. peers by providing funding to assist companies grow to a size where initial public offerings or sizeable mergers are feasible.
"We will be looking to fund companies in areas where Europe can achieve category leadership," Notion Managing Partner & Co-founder Stephen Chandler said in an interview. "I think the fund will create its fair share of billion dollar companies."
Typical deal sizes will range around $2 million up to $10 million & Notion Capital expects to fund around 20 deals, similar to the number of financings of its second fund, yet at somewhat higher ticket sizes, Chandler said.
With its two earlier funds, Notion invested in 33 companies, including fast-growing NewVoiceMedia, a customer call center supplier, & Tradeshift, a business procurement & invoicing service, while selling two firms to eBay & Claranet.
"I think NewVoice & TradeShift are on a path to IPO," Chandler said, yet added that, for other investments, "we would still continue to see M&A as the primary exit route" to bigger technology players, the most usual outcome for European firms.
Notion Capital's partners were founders of cloud-based security provider MessageLabs, which was sold to Symantec in 2008 for $700 million, in what remains the largest exit of a European SaaS firm to date.
(Reporting By Eric Auchard; editing by Susan Thomas)
Venture CapitalNotion Capitalcloud computingEurope