3 months ago
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Europe is routinely castigated by tech industry observers for having too little ‘growth capital’ funds, and, compared to the US, that’s true. That said, it is nowhere near non-existent on this front. To wit: Growth equity investor Kennet has just announced it’s raised €266 million for its largest fund to date, Kennet VI, which is already being deployed into B2B SaaS companies across Europe.
Kennet focuses exclusively on backing established B2B SaaS startups that are founder-owned and either highly capital efficient or fully ‘bootstrapped’ – meaning they’re built without external capital. A good example of this is the conference networking app Grip which raised $13M in 2021, with Kennet leading the round.
The Kennet VI fund follows the previous five funds Kennet has run over the last 25 years. Its most recent exit was with Eloomi in January 2024. The learning experience platform was acquired by floated software company Ceridian. Kennet said this generated a 3.1x cash multiple.
Earlier (numerous) exits include Nuxeo (a 5x exit), Dext (3.8x), CrossBorder Solutions (6.4x), Rimilia (2.5x), and Impartner (2.6x).
Investment from Kennet is typically the first external funding that companies receive and is used to scale and expand internationally, build world-class management teams, and amass strategic value.
In an interview with TechCrunch, Hillel Zidel, managing director, Kennet Partners, said: “This new fund is very consistent with what we’ve done in the prior funds, which is B2B software focused on bootstrapped and capital efficient companies at the growth stage.
“We’re probably the only group with an exclusive focus on this category. And with each client, we just want to do more and more in terms of, you know, being of service to bootstrap founders. The exits we’ve had demonstrate that if you invest in good businesses that have strategic value, you’re not dependent on a particular market cycle to be able to exit successfully.”
The Kennet VI fund was raised in partnership with cornerstone investor Edmond de Rothschild Private Equity, which started investing in the fund in 2017. Bpifrance, British Patient Capital and Federated Hermes Private Equity also committed to the fund.
There’s been a rise in growth funds in Europe. Earlier this year Index Ventures announced $2.3 billion in new funds, spread across different stages, with $800M dedicated to venture investment and $1.5BN set aside for growth- and late-stage companies.
Aside from normal venture capital, the often quieter ‘growth capital’ sector can frequently see great returns for entrepreneurs who prefer to retain a lot of ownership and control but are also willing to bootstrap over a longer period in order to reach revenues and profits.
