DN Capital goes large with new fund

DN Capital’s third fund is three times the size of its previous efforts

DN Capital LLP, a UK-based venture and growth investor, has closed its third fund, GVC III, on €144 million, a three-fold increase on its previous two funds.

The firm said the new fund, which originally targeted €100 million, was “significantly oversubscribed”. Nenad Marovac, DN Capital’s founder and managing partner, claimed that the fundraising was “a real validation of our strategy, performance and our ability to generate first-rate returns for our investors”.

DN Capital, which focuses on investments in software, mobile applications, digital media and e-commerce companies, said it had already committed more than half of the fund since holding a first close in August 2012 at around €50 million.

Deals have included Germany-based baby care e-commerce site Windeln.de, in which DN invested an initial €250,000, and Book a Tiger, a German online portal through which consumers can book professional cleaners. In the UK, GVC III has invested in online real estate agency Purple Bricks and LoveSpace, a storage-by-the-box company recently named among the UK’s top 50 most disruptive companies.

GVC III will target early and growth stage companies in northern Europe, particularly in the UK, Germany and the Nordics, although 25 percent has been earmarked for US companies. DN said it was particularly interested in helping to bring US companies to Europe and vice versa.

GVC III attracted a range of investors, including family offices, large institutional investors and sovereign wealth funds throughout Europe, as well as a number of investors from the US and the Middle East. According to the firm’s spokeswoman, Mariam Kaan, the investor base is more diverse than for the previous two funds, reflecting the increasing interest in European venture.

LPs include Connection Capital, a network of private investors and family offices, and the European Investment Fund, which acted as a cornerstone investor.

“The team at DN Capital are amongst the savviest in the business and given their strong track record, we are confident that they offer a particularly rigorous approach to the opportunities in the venture market in Europe today,” said Bjorn Tremmerie, Head ERP-EIF Dachfonds at the European Investment Fund. “Venture is certainly very compelling at present also in Europe.”

According to Kaan, Germany will be a particular focus in the next few years. The firm wants to expand its team in Germany and make more investments there. It also intends to open an office in Berlin, to capitalise on the city's thriving technology and enterprise scene.

DN Capital now has $320 million under management, and has invested in more than 50 companies since 2000. Its two previous vehicles in 2001 and 2008 both closed on €47.5 million.