Connected Capital, a leading investor focused on rapidly growing B2B SaaS businesses, has just closed its oversubscribed Fund 11 at a total of €154 million, bringing the firms total committed capital to over €200 million.
After a massive 2021 for European tech, we are seeing more and more of these big funds being announced by European VC’s – it’s a good sign of things to come for the year, fresh money boosting fresh innovation and ambition.
2021 was a record-breaking year for the European tech startup ecosystem, and European innovation is captivating attention across the world for its dynamic and progressive energy. Amsterdam-based Connected Capital is reaffirming its commitment to growth and buy-out investment in European B2B SaaS businesses with this fund, which is 3x the size of its previous fund.
Founded in Amsterdam in 2017 by managing partners Wim Haring, Geert van Engelen, Mathijs Robbens and Olaf te Spenke, Connected Capital focuses on B2B SaaS models, rather than considering a broad range of tech segments, allowing the firm to support its portfolio with industry-specific growth expertise. To date, they have successfully completed nine platform investments across Europe.
Mathijs Robbens, Managing Partner, said: “New, innovative, and scalable solutions are unlocking functionality at an incredible speed. It is inspiring to support cloud-based business models, and our second fund will help us have more impact on SaaS growth and innovation in the next few years.”
According to Atomico’s State of European Tech report, tech exits reached a combined value of over $275 billion in 2021, with enterprise software leading the way. And while early-stage funding has increased by 2.3x, the growth stage has increased by 5x. With €113 billion raised by startups across the continent in 2021 according to Crunchbase, Europe now represents 18% of global tech startup investment, up from 13% in 2020 — a clear indication that European innovation has caught the attention of investors around the world.
As Europe’s tech scene has grown internationally, investors are becoming more specialist in their investment choices. Connected Capital is an example of a European firm now taking a ‘US-style’ investment model that stresses vertical focus and domain expertise.
While news of newly-crowned unicorns, high valuations, acquisitions and takeovers have been running the headlines over the past year, Connected Capital has been pinpointing the fundamentals of scalability. Looking at recurring revenue, healthy gross margins, strong customer retention, and a scalable customer acquisition model as some of the key metrics determining whether a company meets the bar for the team to invest. The firm also highly values founders with perseverance, self-awareness, and an open mind.
“We look for founders with a thoughtful and pragmatic tolerance for risk, who can also recognize their strengths and weaknesses in order to build a larger pool of talent and delegate properly. Strong fundamentals are key for business growth, but a flexible, diverse and adaptive team is what makes success sustainable in an evolving, competitive industry like B2B SaaS.” Commented Mathijs Robbens.
The well-rounded skill sets of the Connected Capital team have been advantageous for the firm and its portfolio companies. In addition to backgrounds from Waterland, Credit Suisse, Freshfields, Bain, and BCG, the investment team has operational experience with various SaaS companies. As a result, the combined knowledge of private equity, consulting and SaaS operations sets a high standard for Connected Capital’s deal sourcing and due diligence processes.
It also positions Connected Capital as a strategic investor in companies that want to scale up out of their home regions. The team has an extensive network to help their founders set up the right leadership as well as grow their revenue in new markets – creating new European leaders.
In order to ensure the strategic and operational support to their concentrated portfolio, Connected Capital plans to make no more than 10 investments from the new fund. Dutch fintech startup Surepay was the first to receive funding from Fund II. Connected Capital will also continue to support its portfolio grow internationally – including, Omnia Retail, Speakap, Concentra, Foleon, OneWelcome, ChannelSight, UpCloud, Brella, and SurePay
HRtech startup from Amsterdam, Speakap opened their first non-European office with the help of Connected Capital, representing the support the firm is offering to expand European tech. Speakap now has over 500 customers across the globe, serving industries such as hospitality, manufacturing, food service, and logistics.
Speakap CEO Patrick Van der Mijl, said: “With their support, we opened an office in New York, but that also brought the challenge of building a team overseas. The Connected Capital team supported us on the ground in the US and helped us structure the set-up of the North America team. Their commitment to supporting founders is exceptional.”
With this new fund, Connected Capital will continue its hands-on investment approach involving smart capital with SaaS expertise that helps founders expand their businesses. In addition to continuing its current strategy of investing in growth-stage B2B SaaS companies, Connected Capital is now also evaluating businesses in the buy-out stage and considering investments up to €40 million.
Our ambition is to become the most sought-after B2B SaaS investor in Europe. Obviously, the most important ingredient of that is the value we bring and our portfolio companies and founders benefiting from that,” said Robbens. “When we invest in a company, we commit to the founders and we do everything we can to help their companies accelerate growth.”