Posted by Stephen Chandler, Managing Partner, Notion Capital.
I am delighted to announce the $120m first close of Notion’s third fund on 23rd July 2015. We expect this to exceed $150m at final close in early 2016. This is our biggest fund yet, and we have big plans for it.
But the most important thing will not change: Notion Capital continues its mission to identify, invest in and support the best B2B SaaS entrepreneurs in Europe.
The Global SaaS Market
Globally, SaaS is becoming the new normal. Multibillion dollar markets like CRM have reached the inflection point where cloud-delivered software is the standard. Other industries like Enterprise Resource Planning (ERP), Human Capital Management (HCM) and Accounting are quickly accelerating to similar status.
Yet in many market segments, the transformation to SaaS is just getting started. In these areas, European founders are proving themselves every bit as able as their global counterparts in creating successful and thriving companies.
Around 25% of global IT spend on Public Cloud (c.$37bn out of c.$150bn) is in Europe according to Gartner and yet just 5% of global investment in our focus sectors went to European companies ($1.2bn out of $25bn, of which $250m was to Notion portfolio companies). This highlights the opportunity and I believe Notion is uniquely positioned in Europe to help these founders build category-leading businesses, leveraging both native European and international markets.
More than funding
This advantage has its roots in our experience founding, building and exiting MessageLabs. It also comes from over six years at Notion working with some of Europe’s leading SaaS companies.
From accumulating performance data to benchmark these companies and fine tune their execution to developing a thriving ecosystem that our portfolio companies can tap into.
These advantages have supported breakout success stories like NewVoiceMedia and Tradeshift, who have together raised over $200m from leading international growth investors. They’ve lead to triple digit IRR returns from exits like Shutl and Star. And they’re helping to drive success across our portfolio that includes high potential companies like Adbrain, Brightpearl, Currency Cloud, Duedil, Dealflo and MOVE Guides.
Through the Notion Platform we are formalising this support across a range of portfolio services including business development, talent, pro-services suppliers, educational events and best practice. We’ll reveal more on the Notion Platform soon.
Growing the Investment Team
Alongside the Partners Chris, Jos, Ian & I and our two VPs Wayne & Patrick, the investment team is joined by Chrys Chrysanthou as a Principal, formerly of Accel Partners, Cisco and Amazon Web Services. We’ve also hired Adam Shepherd and Dan O’Toole as Associates. We now have a great team of diverse and experienced talent who are all passionate about identifying, evaluating, investing in and supporting our current and future portfolio.
I often get asked, what excites us…
We get excited when we see founders solving big business problems, in huge markets, using technology to drive real business change. Whilst we look at the full spectrum of SaaS businesses, both disrupting legacy models or carving out entirely new markets, we do define some key areas across the team, including FinTech, Digital Marketing & AdTech, Business Intelligence, Big Data & Visualisation, Human Capital Management, Commerce Enablement, Dev Tools & PaaS and Cybersecurity.
Personally I track the FinTech and CyberSec markets but more generally we see great opportunity in the convergence of mega-trends. The coming together of Cloud Computing (the scalability & elasticity, the speed to market, the unit economics and global scale that brings) with Mobile Computing, Big Data and Machine Intelligence.
Where these areas collide is where the fireworks really happen. This is the future of Business & Enterprise Software, an intelligent, data driven, predictive world where software is augmenting human decisions and enhancing management, innovation and operations to enable businesses to deliver more value to their customers, shareholders and the world in general.
To the Ecosystem
We aren’t in this alone and Europe’s technology ecosystem is plainly thriving. We couldn’t be more pleased to see, receive and reciprocate the support of other VCs, angels, accelerators and service providers out there alongside us.
Together we are showing not just what the next generation of technology companies look like — but how the world of business itself is evolving.
To our Investors
Our investors range from governments and institutional investors encouraging this ecosystem in Europe, to successful business leaders and family offices who love our entrepreneurial spirit and how we apply that to the world of investing. We couldn’t operate at the scale we do without them.
In many cases, this is not the first time they have shown their belief in us and the European market — a belief that we share and one being evidenced as our portfolio companies grow.
To our Founders
And last but by no means least, a big thank you to the founders and their management teams, who work tirelessly to build their businesses and make a dent in the universe in the process.
They employ around 1500 people, operating across the globe, and are facing down some of the fiercest competition in their respective markets.
It isn’t easy but they wouldn’t get out of bed for anything less.
If you’re a B2B SaaS founder or know great minds solving massive business problems then let us know. We are passionate about SaaS, passionate about entrepreneurs and passionate about scaling global businesses.