Euro SaaS Startups Rejoice

What has not appeared as often are brand new funds aimed at disrupting the enterprise. That changes today with the announcement today that London-based Notion Capital has closed the first $100m of its ‘Fund 2′. This fund will focus on emerging cloud computing and Software-as-a-Service companies in the UK and across Europe. The total fund size will end up being $150m at its final close, expected in the then and there few months. However already, this is one of the largest closes for an early stage VC in Europe to date. With this fund closed, Notion plans to look at 4 or 5 deals closely and will do one or two deals in the straightway couple of months.

Notion Capital has invested nearly $50m in 10 companies to date including Brightpearl, eSellerPro, NewVoiceMedia, Star and Tradeshift. Star now has $80m in earnings and is profitable, during Tradeshift recently completed a new funding round valuing the business at $137m afterwards two years.

Chandler admitted this was not the easiest fund raise, nevertheless, he says the main reason they got the backing they did was because “Firstly, people recognise our track record as business builders, building in the Enterprise space. Secondly, this is a continuation of strategy and our focus on SAAS and cloud computing.” And lastly, because they secured two public sector anchor investors early on, in a similar vein to two other European funds, MMC Ventures and Dawn Capital.

Tremendous possibility

“This is a tremendous possibility, a generational shift,” Chandler told us via phone interview, referring to the opportunities in SaaS right now.

“Enterprises are prepared to pay, even though of course there is plenty to be done in the consumer space. The trouble is it’s more fad and hype driven. Enterprise takes longer however is a proper business with earnings and cash and less dependent on timing,” says Chandler. “We like the less sexy workload of the enterprise, based on earnings and a market we’ve come from.”

The areas the fund will focus on will be areas just as mobile advertising, ‘Fintech’, marketing automation and social networking applied to businesses. As well consumer tech within the enterprise.

Healthy appetite for risk

“One thing different is we have a healthy appetite for risk,” ads White. “We’re happy to take risk and accept some companies won’t make it. All too often European funds are not risky enough and protect their money in other words than funding the businesses to build them out. So we are not afraid to do that. And that as a rule means entering the U.S.”

Notion Capital is a venture fund and advisory business that focuses on early to mid-stage growth businesses in the Internet based services sector. They create value by helping companies to accelerate their growth through financial injection combined with strategic and operational participation.