London investment firm Dawn Capital has raised $700m (£572m) as it looks to nurture the tech talent and innovation blossoming across the continent.
The venture capital (VC) firm’s $620m flagship fund, Dawn V, aims to support software startups with initial investments ranging from $10-$40m at Series A and B stages.
It is the largest ever early-stage business-to-business (B2B) software fund in Europe, according to data company Preqin.
The remaining $80m will support sector winners from Dawn’s portfolio as they advance beyond Series C.
London-based VC Notion Capital has found business software companies made up 30 per cent — or $1.1 trillion — of the value of Europe’s tech sector in 2022.
And while Europe’s thriving software market provides fertile ground for investment, it has not been immune to the global tech downturn‘s recent onslaught of job cuts, chip shortages and international banking collapses.
The post-pandemic tech boom has passed and companies, large and small, are feeling the hit of rising interest rates, high inflation and a dearth of funds.
Haakon Overli, general partner at Dawn Capital, said: “Over the last 18 months, we have all
witnessed the challenging macro environment.
“We founded Dawn to support founders building global B2B software leaders from Europe, and this ethos has not changed.
“We firmly believe it is a great point in the cycle to be investing and see the opportunity in Europe only increasing,” he added.
Dawn V will fuel innovation into artificial intelligence and have already backed several startups such as Fonoa and FlowX. AI, which are helping businesses to modernise their digital services.
“We are at the very beginning of another major technology shift,” said Norman Fiore, general partner at Dawn Capital.
“As our entrepreneurs like to remind us, AI has been around for a long time. The change today is that AI has pushed its way from the engineering teams into the boardroom.
“Its coming prevalence makes it both an investment area in itself as well as a disruptor to every software category we’ve been investing in since we founded Dawn.”