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Northzone raises €300m fund and is eyeing London fintech startups

Lynsey Barber
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Northzone sees the potential of fintech in London

A European venture capital firm which has previously backed Spotify, iZettle and London fintech startup MarketInvoice, has launched a new multi-million pound fund to plough into tech startups across Europe, including the UK in another vote of confidence in the country after Brexit.

Northzone has closed a €300m (£252m) fund to invest in early stage companies from global institutional investors and is eyeing up tech startups in the areas of finance and health in particular in the capital.

Read more: Santander's added $100m to its fintech venture fund

Despite turbulent conditions in the wider market, Northzone - one of the most established VC firms in Europe - said it was its fastest raise ever for the VIII fund.

And in the the UK, the firm is still bullish despite the Brexit vote in June, and with its growing status as the world's centre for financial technology, saying it's "business as usual".

"We haven't seen anyone make a dent in banking business market share yet, it's really just getting started," said London based partner Jeppe Zink on fintech.

"It's just scratching the service. We see the longer term [potential] and in lots of categories. For example, in compliance, if startups can help banks do that then that's an exciting area.

"The biggest assets for consumers such as homes and cars as well as insurance is clearly on the rise. Premiums have a lot of margins - it's a big market but also very valuable and we expect that to continue."

The VC firm is confident that the UK will arrive at a solution that will leave London firmly on the map as a global tech hub and still connected to Europe.

"It would be self-defeating to come out of the economic market," said Zink. "It's not a vote against that. If we're wrong and there's a choice [for the UK] to go it alone we'd have to rethink, but that's four or five years down the road."

Read more: One of the UK's biggest tech investors now has $500m more to play with

The VC firm now has three partners based in London, with Michiel Kottingfrom Accel and the entrepreneur behind startup Uncover (acquired by Velocity last year) Christopher Steinau, both joining this year to bolster its footprint in the capital.

It ploughed more money into MarketInvoice in the startup's latest funding round in July.

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