Spotify-backer Northzone raises US$500m for new investments

[LONDON] Venture capital (VC) firm Northzone said it raised US$500 million to create its ninth fund for investing in startups across Europe and the US, following lucrative early bets on companies such as Spotify Technology SA, iZettle AB and Trustpilot AS.

It's also the company's largest investment vehicle to date, Paul Murphy, general partner at London-based Northzone, said in an interview. Despite this, the strategy of focusing on early-stage startups and initial checks of about five million euros (S$7.5 million) to 15 million euros wouldn't change, he added.

"We'll leave plenty of money for follow-up investments," Mr Murphy said, adding that tech-driven businesses are of particular appeal but not exclusively. "We're a generalist fund so there's no sector we can't explore," he said.

Northzone IX is among the biggest VC funds raised in Europe to date, and one of a growing number meeting or exceed the half-billion-dollar mark over the past two years. Accel announced a US$575 million fund in May, and Atomico raised US$765 million in 2017. Bloomberg News reported earlier this week that EQT Partners AB, the Nordic buyout firm, is set to raise as much as 650 million euros for its latest venture fund as well.

Venture capital investment in Europe has already set a record this year, in the first three quarters of the year hitting US$28.1 billion, according to a report from KPMG. Northzone's recent investments include Tier Mobility, the Berlin-based e-scooter rental startup, and London's Disperse, which makes computer-vision software for the construction industry.

The firm has one billion euros under management according to its website, spread across about 120 individual investments.

BLOOMBERG