Paris-based Partech Ventures is expected to reach a final close on its first growth capital fund in the next few weeks in excess of its initial target of more than €300 million, general partner Bruno Crémel told Private Equity International. “Now it will be north of €350 million.”
Partech Growth Fund, which held its first close at the end of 2014/beginning of 2015 on €200 million, has already invested €80 million across four transactions, Crémel said.
The fund has invested in San Francisco-based video advertising platform RockYou, Los Angeles-based mobile telecoms service company FreedomPop, the UK online furniture retailer Made.com, in which Partech led the latest round of fundraising, and social media marketing company Brandwatch.
“You may see that these investments are in Anglo-Saxon countries,” Crémel said. “That is more to do with deal opportunity than with will. The growth fund is complementary to Partech’s business, in the same industries and with the same geographical focus.”
In addition to Paris, Partech has offices in San Francisco and Berlin. The new fund’s geographic focus will mirror the firm’s existing seed and venture vehicles, with a third invested in the US, a “small third” in France and the rest in the rest of Europe, Crémel said.
It is targeting investments in a range of €10-40 million, with an average ticket size if €20-25 million, in growth stage tech companies with minimum revenues of €10-15 million and minimum annual growth of 30 percent. “Our ticket size of €10-40 million gives us the ability to lead the [financing] round we are investing in.”
The firm invests in internet, mobile, Saas (software as a service) and technology segments. “They are [companies] looking for final round financing before exit, IPO, international growth or the launch of a new product category,” Crémel said.
The firm is also raising its seventh venture fund that is able to invest from “a few thousand” euros to €1-2 million, Crémel said. Partech Ventures VI, a €130 million, 2012-vintage vehicle, is almost fully invested. That fund invests from €2-10 million in series A and B financing.
“The reason we launched the Partech Growth Fund is that we were not able to deploy investments into companies where we had an opportunity through our footprint in the US and Europe,” Crémel said.
The growth capital team includes two partners in France, one in the US and a small team of analysts.
The new fund’s investors are largely the same as its existing funds on the institutional side, with a strong French investor base and LPs from the rest of Europe, including Germany and Benelux.
“But we have been able to catch a new category of investors that are more interested in growth stage and their risk profile is different from seed and venture funds,” Crémel said. These include family offices new to the firm and high net worth individuals.
KfW Bankengruppe, Renault Group, the European Investment Fund and Carrefour Group are among Partech Growth Fund’s LPs, according to PEI Research & Analytics.
Corporate investors, which account in general for about 20 percent of the firm’s investor profile, have an active role in helping its companies to develop, Crémel said. “There is an intimacy between our portfolio companies and our corporate LPs.”