Arguably in Europe, and in contrast to years gone by, there is now plenty early-stage venture capital sloshing around for the ecosystem here to have reached critical mass (something I recently discussed with Forward Partners’ Nic Brisbourne). But once you move a bit further up the funding stages, there is still a lot less available capital compared to Silicon Valley.
To help address this, Mosaic Ventures recently launched with a new $140 million fund aimed at filling the so-called ‘Series A gap’, and earlier this month Octopus Ventures unveiled a new “growth capital” fund of the same size. Today sees another VC step up to the plate.
Highland Europe, which pitches itself as a “growth-stage” technology investor, has raised a new €332 million (~$379m) tech fund. ‘Highland Europe Technology Growth II’ will target startups in the internet, mobile and software space and who are at the “venture and growth-stage” with investments between €10m and €30m. “The partners aim to back sector-leading companies addressing large market opportunities either on a pan-Europe basis or globally,” says the London and Geneva based VC.
In a statement, Laurence Garrett, Highland Europe partner, says: “In Europe, the early-stage investment market is relatively well-funded – but there is a relative under-capitalization of the venture and growth-stage market. In the past, deals requiring investment of €10M – €30M were over-syndicated by European investors prompting many entrepreneurs to seek capital in the US. Highland Europe is simply meeting a market need within the venture capital and growth-capital eco-system.”
Meanwhile, the VC firm’s ‘Highland Europe Technology Growth I’ fund, which launched in 2012, has invested in 15 technology companies to date. These are WeTransfer, AMCS, GetYourGuide, Outfittery, SocialPoint, Finanzcheck, TalentSoft, eGym, Intersec, NewVoiceMedia, Brandwatch, Matches Fashion, Jampp, LoveCrafts, and Malwarebytes.
To give you an idea of the type of startups Highland Europe backs, it says these companies have demonstrated resourcefulness by “achieving substantial revenue scale in a relatively short period of time, and on a capital-efficient basis.” Specifically it notes that they are high-growth and, in what appears to allude to the frothy times across the pond, have “sensible business models from a unit-economics perspective”. How very European.