Europe tech investment group targets €600mn for debut fund

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A group of investors has launched a new European venture capital firm seeking to raise at least €600mn to back local start-ups, as a recovery in funding for technology companies picks up after a two-year drought.

The fund, Noteus, is led by a team that split off from French investment firm Eurazeo, and has already invested more than €300mn into tech groups since its founding earlier this year, according to a person familiar with the group.

Noteus eventually plans to raise at least double that amount for its debut fund, which will back European start-ups in more advanced stages of development.

“There is a lack of experienced growth investors native to Europe,” said the person familiar with the effort. “They’re not doing this slowly.”

The launch of Noteus comes after a pandemic-era surge in technology investment came to a halt as rising interest rates and geopolitical tensions hit the market, forcing European start-ups to cut costs as VC funding dried up.

Almost €29bn worth of venture capital deals were struck in Europe in the first half of this year, according to data compiled by researcher PitchBook.

Dealmaking has accelerated in recent months, driven by a new craze for artificial intelligence start-ups, and the European venture capital industry is now on track for its most active year since the boom period during the pandemic. Balderton Capital last month raised $1.3bn in Europe’s largest venture funding focused on start-ups in the region.

Some Silicon Valley investors have also expanded to Europe, with Andreessen Horowitz and IVP opening offices in London last year.

Noteus is led by chief executive Yann du Rusquec, who previously headed a team focused on later-stage start-up deals at Eurazeo that invested in some of Europe’s most highly valued start-ups, including electronics refurbisher Back Market and cloud data specialist Aiven.

The new fund is targeting a gap in the market for European funds that provide financing to advanced start-ups, as much of the funding for more mature European tech groups comes from foreign investors.

Noteus has built up a team of 14 including 10 investors. The group includes three other general partners who also worked at Eurazeo — Nathalie Kornhoff Brüls, Guillaume d’Audiffret and Zoé Fabian-Frey.

The investors departed Eurazeo during a turbulent time for the firm. Virginie Morgon, one of the rare female leaders of a private equity group, was ousted last year as chief executive after losing the support of Eurazeo’s two largest shareholders.

Noteus has invested in six companies since its founding, including Goldman Sachs-backed live entertainment group Fever and French health app Doctolib, according to the person familiar with Noteus.

The fund has already established offices in London, Paris and Berlin, and plans to open an outpost in Madrid. Noteus has also tapped Sabine Bendiek, a former executive at Microsoft and SAP, as a senior adviser.

A representative for Noteus declined to comment.