The scale of the opportunity in cloud computing and SaaS was underlined today with the news that Notion Capital has closed its third fund with a first round of $120 million, with a final close of $150 million expected. Funds under management will therefore be over $300 million.
Partners and brothers Ben and Jos White formed Notion in 2008 after selling MessageLabs to Symantec for $700 million, one of Europe’s largest B2B SaaS exits. But what is key to note here is the scale of opportunity for European enterprise startups.
For starters, the news makes Notion the biggest dedicated B2B SaaS fund in Europe with 33 investments, including Tradeshift, NewVoiceMedia, CurrencyCloud, DueDil, AdBrain and Trustev. It’s already had European exits such as Shutl to eBay and Star to Claranet. Its portfolio also includes many of the hottest SaaS companies in Europe right now, including Adbrain, Brightpearl, Currency Cloud, Duedil, IOCS and MOVE Guides.
It’s clear what is at stake here. The global public cloud market size is around $150 billion, 17 percent CAGR (Gartner). SaaS hit $23 billion in 2013 out of $134 billion spent on enterprise applications (IDC), and SaaS predicted to be $51 billion by 2018 (IDC). There is a huge move to the cloud and it’s barely begun.
Co-founder Jos White told me: “We think Enterprise SaaS is so big and it has really only just started. Our message to B2B startups are that we are real specialists in that. We have first-hand knowledge and feel that we can be much more than just money. There’s entrepreneurial empathy having sat on the other side of the table.”
“We see disruption around the world and see startups emerge to offer real innovation within incumbent industries such as finance, consulting and marketing. So we’re looking for opportunities that can turn into real category leaders on a global scale,” he added.
Yes, there are plenty of other VCs focused on SaaS in Europe: Dawn Capital (UK), Episode1 (UK, half their portfolio is SaaS), MMC Ventures (UK), Mosaic Ventures (UK), Point Nine Capital (Germany) and Paua Ventures (Germany). Not to mention the heavy hitters at Index, Accel and Balderton.
But given the history of the partners, the portfolio and the collective experience and ecosystem of other local funds that have co-invested with them, you’d basically be an idiot if you were doing a SaaS startup in Europe and had not heard of Notion Capital.