May 16, 2017 / 9:38 AM / 3 years ago

UK venture firm Notion wins overseas backers to avert Brexit fund gap

FRANKFURT (Reuters) - UK-based business software venture capital firm Notion Capital has increased funding for European business software start-ups by bringing in new investors from the United States and the Middle East, the firm said on Tuesday.

The venture firm said it has brought in additional international investors including Cisco Systems, the U.S. endowments of Emory University and Texas A&M and an unnamed sovereign wealth fund from the Middle East.

These moves means it now draws fully half its funding from outside Europe, ensuring the London-based firm has alternative financing sources to the European Investment Fund (EIF), a current major backer, after Britain completes its planned withdrawal from the European Union. (

Notion is Europe’s largest dedicated financer of business-to-business, cloud-based software firms, with $300 million of assets under management.

It also closed a new $80 million (61.9 million pounds) growth equity fund to make follow-on bets on its most successful ventures, rather than turning to outside investors, often from the United States, to fund companies in later stages of growth.

The firm said it had expanded and completed its third venture fund, raising $140 million, a 40 percent increase from its second fund.

Two of its most successful early investments - marketing firm NewVoiceMedia, which has raised $141 million to date, and invoicing platform Tradeshift, with $182 million in funding - are ready to consider stock market flotations over the next two years, Managing Partner Stephen Chandler said in an interview.

Other current investments include money transfer firm Currencycloud, financial contract processor Dealflo, direct debit bill collector GoCardless, hotel booking site TripTease and human resources software maker Workable.

Around 40 percent of the companies Notion funds are located in Britain, with the rest spread across Europe.

The focus on Britain reflects the fact that the country remains the center for business software firms, Chandler said.

The venture firm, led by partners who built security firm MessageLabs and sold it to Symantec for around $700 million, named as new partners Chrys Chrysanthou, formerly of Cisco, Amazon Web Services and Accel Partners, and Patrick Norris, a serial entrepreneur and former Morgan Stanley banker.

(1 British pound = $1.2933)

Reporting by Eric Auchard, editing by Louise Heavens

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