Notion Capital Launches £97m European Cloud SaaS Fund

A London-based venture capital firm has highlighted the prevalence of cloud computing, closing its third fund with a first round of $120 million (£77.4m).

Notion Capital’s fund will be targeted at emerging European cloud and Software-as-a-Service (SaaS) companies, and is expected to reach $150 million (£97m) at its final close.

Largest fund

This round makes Notion Capital the largest B2B technology fund in Europe. The firm was founded founded by two brothers who sold their startup to Symantec for £450m, and since then they have invested in over 33 European Cloud companies including Tradeshift and CurrencyCloud.

“We aim to identify emerging entrepreneurial talent in Europe and help them build global category leaders,” said Stephen Chandler, managing partner at Notion Capital. “There are tremendous opportunities in this part of the world and the market remains undersupplied with high quality capital. This new fund helps us change that.”

With the global cloud market currently sitting at $150 billion (£97bn), according to research firm Gartner, the European public cloud market of $37 billion (£23.9bn) is a sizeable chunk of investment opportunity for VCs and startups alike. In 2013, SaaS alone accounted for $23 billion (£14.83bn) out of $134 billion (£86.4bn) spent on enterprise applications, said cloud experts IDC.

The research firm reckons that demand for SaaS enterprise applications is accelerating and exceeding the demand for on-premise applications by five times; SaaS forecast growth is 17.6 percent CAGR, compared to 3.1 percent for on-premise.

“Our strategy remains to only invest in what we know and we think this gives us a strong advantage in the market for both evaluating and supporting companies,” said Chandler.

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