Notion Capital raises $130M growth fund to tackle Europe’s follow-on gap

In response to the ongoing shortage of growth capital in Europe, Notion Capital, based in London, is stepping up its efforts by launching a new growth fund worth $130 million. This fund is nearly double the size of its predecessor and aims to provide follow-on investments not only to its existing portfolio companies but also to new ventures. According to managing partner Stephen Chandler, U.S. venture capitalists who traditionally filled this gap have shifted their focus back to their domestic market. This shift opens avenues for European firms like Notion Capital to step in and make a significant impact. The firm is particularly interested in backing companies that address rising demands for sovereignty, especially those involved in defense and supply chain logistics. Artificial intelligence is another key area of focus for Notion Capital. Chandler describes the current AI landscape as a super cycle that is fundamentally reshaping software delivery and consumption. However, the firm will not be investing in foundational technologies such as large language models; rather, it plans to target application-level innovations that can significantly expand market opportunities. Historically, Notion Capital has concentrated on sectors like SaaS, cloud, and fintech, but this new fund will integrate AI-driven solutions and explore additional verticals. The firm anticipates making around a dozen investments and has already begun deploying capital, with notable deals including the stock trading API Upvest and external startups like Kraken, spun off from Octopus Energy, and Nelly, which specializes in financial products for the healthcare sector. To ensure thorough evaluation of follow-on investments, Notion is establishing a dedicated team of partners focused on sourcing growth-stage opportunities beyond its current portfolio. Among these partners is Stephanie Opdam, who has been with Notion and will lead this initiative alongside Jessica Bartos, the firm's first external hire who previously worked with Salesforce Ventures. Chandler believes that the inclusion of external expertise is crucial for executing this new strategy effectively. As for future growth funds, the landscape appears to be improving for raising capital, particularly with initiatives like France’s Tibi initiative and the U.K.’s Mansion House Accord aimed at boosting pension fund investments in venture capital. Notion Capital’s latest fund, denominated in euros and based in Luxembourg, has brought their total assets under management to over $1 billion. The firm has successfully cultivated relationships with limited partners from various regions, including continental Europe, the U.K., MENA, and the U.S., with about 85% of their funding coming from institutional sources. While recent efforts to attract long-term institutional capital did not directly impact this fund, the outlook remains positive for addressing the existing growth capital challenges in Europe. Should more limited partners engage in growth-stage investments, competition in this sector may increase, but Chandler maintains that Notion Capital's extensive connections with founders and its active platform team provide a unique advantage in this evolving landscape. The firm has invested in over 150 startups since its inception, and while some have exited or are pre-AI, many remain poised to emerge as influential players in the future.