Dawn doubling down on Europe’s best tech

Haakon Overli
Jun 21 · 6 min read
No tall poppy syndrome at Dawn

This week we announced the closing of Dawn Opportunities Fund. At $125M, it’s Europe’s largest B2B opportunities fund. We have already deployed a good portion of it in Collibra — the leading data governance and cataloguing company — alongside Alphabet’s CapitalG growth fund in the recent $100M round. We backed Collibra from the very beginning via our flagship fund and it’s great to be in the first Belgacorn.

As a firm, this builds on our history of backing our best businesses to the hilt — we were a double digit shareholder in Mimecast [MIME] at the NASDAQ IPO. In the past, we have been reliant on the support of our excellent investors on a case-by-case basis, and this fund allows us to be more nimble when backing our winners. We’re pleased to continue to serve our LPs and Founders in this way.

Personally, I find this a fascinating development in the context of the European tech ecosystem. As very few people were ever terribly keen on offering me a job, I have been an entrepreneur for effectively all my professional life (shout out to the good people of JP Morgan who employed me for a whole year). The changes in that time have been profound — and, happily for all of us, for the better. When I was on the other side, very few VCs had more than a superficial understanding of tech, and deals were tiny ($1M) and milestone-based — even at what we now think of as Series A and beyond.

Fast forward to 2019, and European venture-backed companies are increasingly emerging as global winners. This is a testament to a new breed of founders who are simply outstanding, and to the new depth of insight from a large number of new venture funds. In addition, there is a new layer of exceptionally capable people working at startups at the VP level and in earlier stages of their career. And alongside that, a cadre of seasoned entrepreneurs and other business leaders helping out at Board or advisory levels. There is a lot to be proud of in Europe.

The Dawn Opportunities fund is piggybacking on this macro trend and was set up to double down on our most successful existing investments. The fund was suggested by our larger LPs and is 97% backed by existing investors; thank you to all of them. It could have been larger (it was raised in a very short time) but we feel the size was optimal for the first Opportunities Fund.

For our Founders, the new fund means we can write significantly bigger cheques for high-performing companies; we’ll be investing up to $70m in the leading lights of the European tech. The intent is that our more mature portfolio companies, like Showpad and Collibra and others to come, can continue being backed by European capital — something we feel is really important both for the companies themselves, in terms of benefitting from on-the-ground support, and for the development of the ecosystem on the continent more broadly.

Compared to when I started, Europe now has order of magnitude different depth of tech talent, increasingly skilled entrepreneurs, insightful investors, and a growing back catalogue of successful businesses. Now we can support this new wave of success stories further through their journeys.

Founders (and their teams) no longer need to uproot their family and leave their friends behind too early on

People do good work when they are happy

Even up until a few years ago, there was a school of thought who said that if you were ‘serious’ and ‘hardcore’ you had to move to the Valley. This was certainly the Valley PR. This has now been turned on its head. Even Valley VCs now invest 50% of their capital outside the Bay Area. The reasons most people mention are a pile up of Trump visa policy, high rents, expensive staff and unaffordable property. Having spoken to many brilliant founders throughout the years, an overlooked factor is the personal social dimension. Leaving your entire framework behind — often with a young family — and going to a timezone 8 or 9 hours away is not trivial. Add that to the huge stress of growing a start-up, and the mix is not always watching the sun set over the Pacific.

That’s changed. Founders can now build a meaningful business — even a global champion — from a European base, which they’re likely to retain even after expanding to US. We still advise that one of the Founders should lead the US expansion — very important for our SaaS businesses — but at a later stage when the business is more established and with a different risk profile.

Within this context we’re increasingly seeing European founders that have been through the cycle before, either as a founder or early-stage long-term employee. That means Europe is seeing more ideas, but also a greater understanding how to productise and commercialise those ideas.

When it comes to building products, nowhere is better than Europe. Europe has a greater tech talent density than anywhere else in the world and that talent is more loyal and more affordable than other major tech hubs. Today it’s arguably quicker and cheaper to build and to continue to innovate great technology products in Europe than anywhere else. Add to this forward looking policies like the , and it is really a great place to build a business.

As a result, there are opportunities for us to make great investments all over Europe. We’re investing in cutting-edge B2B businesses from France and Belgium&Netherlands, to Germany, to the Nordics, to the UK, to Spain and Italy.

Why an Opportunities Fund?

“The harder I work, the luckier I get” (Gary Player, Confucius and others)

Our greatest financial success stories for our LPs have come from investing further into Dawn portfolio companies that are performing exceptionally well. Perhaps most notably with Mimecast and iZettle, but our investors are sitting on large gains in others such as Gelato, Collibra and Showpad. This new fund comes as a request from our existing LPs to formalise our top-up investments.

Through our flagship fund investments in A and B rounds we get to meet and work with amazing founders and broader teams. When it works out, these Dawn portfolio companies are delivering significant value to their C+ round investors, so it’s only natural we wanted our investors to be part of those lucrative rounds too.

Another vector is that we would like to invest in great European B2B companies where we for some reason or other are not in at the A or B rounds. We believe that with our collective experience of growing companies and preparing for successful exits, there is a role to play for a European specialist fund.

$360M, really?

Finally, with this fund close, we’ve now raised $360M in the last 12 months. This puts us up there in funds raised, but we still want to be measured by what multiple we return and not what goes in. That we can raise this level of dollars is purely a reflection of the hard work of our founders and the dedication of our growing team to support them.

We will keep you updated as we continue our doubling down on Europe’s best.

Dawn Capital

Stories from our team and portfolio companies

Haakon Overli

Written by

Venture Capitalist at Dawn Capital

Dawn Capital

Stories from our team and portfolio companies