Northzone raises €1bn fund to back European tech entrepreneurs

13 Sep 2022

Northzone partners. Image: Northzone

This is the largest ever fund from Spotify and Klarna-backer Northzone. It is also one of the biggest funds raised for start-ups in Europe this year.

London-based VC firm Northzone has raised a €1bn fund to back tech entrepreneurs in Europe.

In an announcement today (13 September), Northzone said the latest fund – its largest to date and one of the largest in Europe this year – will focus on backing “category-defining” European tech entrepreneurs from seed stage all the way up to IPO.

Northzone has previously funded major tech players from the continent such as Spotify, Klarna, Trustpilot and Personio. According to Sifted, each investment will range between $1m to $40m.

“Between the global climate crisis and social, macroeconomic and political uncertainty, we believe technological innovation will continue to be the silver lining that delivers real societal growth,” the VC firm wrote on its website.

“Now more than ever, we look to entrepreneurs who are building a mindful, innovative future. And founders have proven many times that they thrive in turbulent times.”

This is Northzone’s 10th fund cycle. According to its website, it has raised more than $1.7bn and made more than 175 investments since it was first established in 1996.

With a focus on areas such as fintech, health-tech, SaaS and consumer tech, Northzone said it aims to be the long-term partner to founders across Europe and the US, many of whom “will build their own business category through this fund cycle”.

Northzone partner Jeppe Zink told Reuters in an interview that its latest fund comes at a time when the “exuberance of the Covid years is gone”.

“In any graph you will see this anomaly that’s called 2021. If you just wipe that from your memory and look at valuations and deals from 2018 or 2019 as a growth curve, you will see that it continues,” he said.

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Vish Gain is a journalist with Silicon Republic