Dawn Capital, which is raising one of Europe’s largest venture capital funds targeting FinTech and B2B tech business, has burst through its initial target to reach a $235m final close.
The firm said it twice raised the hard cap for Dawn III amid heavy oversubscription, which it put down to growing investment opportunities in the European market, increased institutional interest in European VC and the strength of its current portfolio.
More than £50m of that total came from the European Investment Fund, which was widely reported to have frozen its funding to UK venture capital funds in the wake of the Brexit vote.
Other backers included the British Business Bank through its commercial arm, British Business Investments, and unnamed new institutional and strategic investors from the US and Europe.
Dawn said its third fund would continue to focus on Series A investments in B2B businesses, initially investing between $5m and $15m.
The firm has been very active in the FinTech space over the years, having already completed a deal in the space this year. Dawn Capital began the year with a contribution to the $58m Series D round of data governance and management company Collibra.
Its previous investments have included SaaS business Mimecast, which was listed on the Nasdaq exchange in 2015 and currently has a market cap of more than $2bn.
The firm said its first fund already 3.3x distributed on invested capital with companies still in the portfolio, and that Fund II was on target for a similarly strong results thanks to strong portfolio businesses including mobile payments processor iZettle.
Dawn general partner Haakon Overli said, “We are delighted by the response from the market, particularly our existing investors in subscribing for nearly 80 per cent of Dawn III, which is nearly three times the size of Dawn II.
“We are also looking forward to working with our new LPs that will offer strategic benefits including financial services expertise and closer links to the US market.
“The European tech investment market has matured so quickly that to keep leading rounds in some of the world’s most exciting businesses has required a commensurate step up in our ability to write larger checks whilst still being confident of continuing to deliver strong returns to our LPs.”
Norman Fiore, general partner at Dawn, added, “When we first started investing in early SaaS companies such as Mimecast – currently valued at over $2bn – the environment was more Wild West, with incumbent software companies targeted as sitting ducks.
“Today, the transition to cloud technology continues keeps fuelling innovation. And today’s start-ups are eyeing first generation SaaS players as the new targets.
“We are looking forward to jumping into the fray alongside exceptional entrepreneurs to capture value in this cycle too.”
Fellow Dawn general partner Josh Bell said, “This is a particularly exciting time to be investing in European FinTech.
“In the US, we are seeing an easing of the financial regulatory environment which is in sharp contrast to a more aggressive European approach most recently with PSD2 and GDPR.
“We expect this forking will lead to nimble home-grown players taking advantage of this disruption to build European champions. We look forward to supporting these future Unicorns.”
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