Notion hits €300M for its fifth fund, however is unimpressed by massive rounds into Generative AI startups

When it first appeared on the scene round ten years in the past, Notion Capital was poised to reap the benefits of the oft-repeated phrase, “Software program is consuming the world.” Particularly, it was aiming at what was then referred to as the enterprise SaaS area. A number of years on, and it’s capitalised on that thesis, investing in in additional than 100 early-stage corporations.

It’s now getting into its subsequent section, having accomplished the ultimate shut of its new €300 million ($325.6m) fund, its fifth, which closed at its ‘exhausting cap’.

The proof of the pudding is within the consuming, and Notion’s software program portfolio has definitely been ‘consuming’ lots of the world.

It’s invested into CurrencyCloud, GoCardless, Paddle and Yulife within the UK, HeyJobs and Upvest in Germany, Mews within the Czech Republic, Cobee in Spain, TestGorilla within the Netherlands, Unbabel in Portugal and Workable in Greece.

Fund 5 has additionally already invested in Sure, DataOps, M3ter and Resistant AI, and the VC fund expects to make round 20 core Collection A+ investments in whole from this fund.

Plus, there’s a distinction, maybe pushed by Brexit. This “Notion V” fund is Euro denominated and Luxembourg-based, that means it should have an more and more pan-European focus for investments.
 
The agency additionally introduced three senior promotions. Accomplice Itxaso del Palacio turns into Common Accomplice and Stephanie Opdam and Kamil Mieczakowski will transfer to Accomplice.

Del Palacio joined Notion in 2018 from M12 (Microsoft Ventures) the place she was an Funding Accomplice, and since becoming a member of has led investments in Sure, Cledara, Cobee and Yulife, amongst others.

Opdam and Mieczakowski additionally joined in 2018 and have led investments in DataOps and Resistant AI.

However Stephen Chandler, Managing Accomplice at Notion Capital, believes the phrase “Entperprise SaaS” is now not match for goal.

He instructed me: “We used to actually use the phrase SAS solely for the main focus, however, you recognize, to be sincere, our focus for some time has been broader than that. SaaS has advanced past the applying layer into infrastructure, hybrid, cloud, edge computing, all of these sorts of issues. But additionally completely different monetization fashions. It’s now not only a case of subscription software program. We’re seeing individuals taking a share of funds, having different embedded finance propositions, marketplaces. All of these issues sit inside the Notion wheelhouse. We have a tendency to make use of the phrase ‘enterprise software program’ now, despite the fact that generally I feel that’s a bit boring.”

He added that “the technique stays very a lot the identical. We proceed to focus at Collection A, the place our candy spot is.”

He stated Notion can even put small checks into pre-seed corporations “We are going to actually go as little as 50,000 euros into firm. After which we can even are available on progress stage alternatives.”

Does he see a possibility with Generative AI?: “The place we see the chance inside our type of remit is extra a verticalized play. Particularly, the place an organization has proprietary information that it might probably leverage. We see some actually attention-grabbing corporations rising from that. And likewise some threats I’m certain as effectively.”

He additionally criticised buyers who had gone massive into AI startups when a lot of the sector is unproven, and singled out the current $105 million funding into Mistral: “I feel there’s been a tonne of hype and once I begin seeing corporations doing $100 million pre-seed raises I discover it a bit regarding, to be sincere. You sit and have a look at the names of the those that have invested and also you assume, effectively, truly, even when the corporate actually nails it, you’re by no means gonna make any cash and that actually?”

He thinks the “horizontal play” of Generative AI is way more the purview of Large Tech: “I feel it’s going to be the large guys that lead and I additionally assume it’s going to commoditize fairly shortly.”

Notion can even supply a 3rd Alternatives Fund in 2024, placing further progress follow-on capital into the agency’s greatest performing enterprise belongings and different progress stage enterprise software program corporations in Europe.

Traders within the new fund embody Cortes Capital LLC, KfW Capital, and TNO. Returning LPs included: British Affected person Capital, Novo Holdings and RSJ.