DN Capital

The DN Capital team

DN Capital raises £177m to invest in growing businesses

The venture capital firm which has invested in the likes of Shazam and Auto1 will use the funding to back Seed and Series A-stage companies.

DN Capital has closed its latest fund of £177m. The VC firm’s fourth fund, which was substantially oversubscribed, will primarily back Seed and Series A-stage companies involved in SaaS, fintech, digital health and consumer mobile apps.

The announcement follows a highly successful few weeks for DN Capital, which saw portfolio companies Shazam acquired by Apple and Auto1 receive a €460m investment from SoftBank’s Vision Fund.

To date, roughly two-thirds of DN Capital’s investments have been made in Europe, through its London and Berlin bases, with the remainder coming from the firm’s Silicon Valley office in Menlo Park.

With Fund IV, the team’s European focus will be on companies in Germany, the UK, the Nordics and France, while its US investments will primarily be on the West Coast and the Boston-New York corridor.

Founded in 2000, DN Capital has consistently ranked as one of the most successful VC funds in Europe, with the performance of most of its funds also comparing favourably with the leading Silicon Valley firms.

To date the firm has made 65 investments (excluding seed deals) in nine countries, which have resulted in 15 profitable exits (3 IPOs and 12 trade sales), over 50% of which had enterprise values of between US$150m and US$1.2bn. These include Endeca (Oracle), Purplebricks (AIM: PURP) and Quandoo (Recruit).

“Our guiding principle from day one has been for DN’s two founders to remain actively involved in every investment decision made by the firm,” says Nenad Marovac, founder and CEO at DN Capital and Vice-Chairman of InvestEurope.

“We were founded immediately after the tech bubble burst and raised our second fund as the global financial system went into meltdown, so we know what it’s like to be entrepreneurs in the face of adversity.

“We bring that experience to bear in the hands-on way we support the founders in our portfolio by providing ongoing advice, connections, introductions, partnerships and mentorships – capital is only the start.”

Co-founder and managing partner Steve Schlenker adds: “With Fund IV we will be looking to back ambitious entrepreneurs with the background, intellect, grit and determination to take a startup and build it into a globally impactful business.

“Our first fund, despite being only €47m of capital, was the only European investor in Endeca, one of the most important e-commerce infrastructure software companies of the last 20 years, and the lead investor in Shazam, which is on more than a billion phones worldwide.

“Since then, we have led investments in what is now one of the largest online classified businesses in the world (OLX), the UK’s first online estate agent to go public (Purplebricks), the largest car marketplace in Europe (Auto1) and many other technology leaders such as Hometogo, Quandoo, and Parallel Wireless. The opportunity in Europe is extraordinary right now and our global strategy positions us well to help companies born here become world beaters.”