Notion Capital Raises $130M Growth Fund to Bolster European Startups, Expanding Investment in AI and Defense Sectors

In response to the persistent issue of limited growth capital in Europe, Notion Capital, a London-based firm, has taken proactive measures. Notably, the company recently closed a $130 million growth fund, significantly larger than its previous one, with plans to invest not only within its existing portfolio but also beyond.

This new fund marks a significant step for Notion Capital, as it broadens its investment focus beyond software-as-a-service (SaaS), cloud, and fintech. The firm now aims to capitalize on the burgeoning artificial intelligence (AI) sector, viewing it as a super cycle driving a profound shift in the way software is delivered and consumed.

However, Notion Capital will not invest in the infrastructure layer such as large language models. Instead, the firm sees opportunities in the application layer, which they believe will significantly expand their market size.

Notion Capital has already begun deploying capital from this new fund, with deals including Upvest, a stock trading API from its early-stage portfolio, and external companies like Kraken, an Octopus Energy spinoff, and Nelly, a startup specializing in software and financial products for the medical sector.

To ensure robust objectivity, follow-on deals will be conducted by dedicated growth fund partners who will also source growth stage opportunities outside of the portfolio. Among these partners is Stephanie Opdam, an existing Notion Capital partner, and Jessica “Jess” Bartos, formerly a principal at Salesforce Ventures. Bartos, a U.S. national, is Notion Capital’s first external partner hire.

The firm anticipates making around a dozen investments from this fund. Despite the potential increase in competition with more institutional capital entering growth stage investing, Notion Capital believes its competitive advantage lies in leveraging the reach it has established through its early-stage strategy. With extensive touchpoints with founders over the years and flexibility regarding check size, the firm is well-positioned to identify and invest in promising companies.

Growth Opps III’s primary asset remains its robust portfolio, which includes investments in over 150 startups since the firm’s inception, such as Currencycloud, GoCardless, Mews, Paddle, and Quantum Systems. While some of these companies are pre-AI or have been exited, many remain active, potentially poised to become future champions, strengthening Notion Capital’s reputation and attractiveness to external companies seeking growth capital.