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European stand-out venture fund DN raises new 200m euro fund

[FRANKFURT] DN Capital, a European-focused venture firm co-founded by two Americans, has closed a new 200 million euro (S$324.6 million) fund to invest in tech start-ups, seeking to repeat a track record that has made it one of Europe's most successful VCs.

In recent weeks, the firm enjoyed lucrative exits from its portfolio when Apple paid US$400 million to acquire music discovery service Shazam and Softbank's Vision Fund put 460 million euros into user car marketplace Auto1.

Roughly two thirds of the 59 investments it has made since its founding in 2000 have been in Europe, with the remainder in the United States. The venture capital firm operates from offices in London, Berlin and Silicon Valley.

The two founders told Reuters in a phone interview that they will stick with their strategy of seed and early-stage rounds in areas such as online marketplaces, software as a service, fintech, digital health and mobile apps for consumers.

The latest fund, its fourth, will focus on Germany, Britain, the Nordics and France, as well as tech centres on both coasts of the United States. With US$500 million in assets under management, it is one of Europe's larger early-stage funds.

Its third fund, which closed in 2014, was among the top 10 performers in Europe and North America among funds raised earlier this decade with a net investment rate of return of 62 per cent according to Prequin Alternative Assets figures.

DN invested US$1 million in Shazam in 2004 for a 15 per cent stake in the company, which provided it with a return 21 times its initial investment after Apple's acquisition.

A follow-on investment in 2014 made a positive, but far lower return, partners Partner Nenad Marovac and Steve Schlenker told Reuters.

DN remains an investor in German-based, pan European used car marketplace Auto1, having sold just one-third of its investment stake to Softbank, which nonetheless yields its biggest ever payout to investors in its history, they said.


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