HenQ closes third fund on €50m

Fundraising for HenQ III was initiated in January 2015, when a target in the €30-50m range was established. The VC stopped accepting commitments in August 2015, when the vehicle hit its €50m hard-cap.

HenQ III features a typical 10-year lifespan plus two one-year extensions, and is understood to roughly follow the industry's standards with regards to management fee, hurdle and carry. Its fundraising involved the work of Amsterdam-based legal consultancy Lexence – though no placement agent was mandated.

HenQ III's €50m fund size represents a considerable step up for the VC, which raised a combined €25m for its two previous vehicles HenQ I and II.

The final close for a software-focused fund is the second to be reported by unquote" in the Netherlands this week. On 8 September, Dutch GP Main Capital announced its fourth fund had reached its €85m hard-cap when closing, with plans to seek tech companies in the Benelux region and Germany.

Investors
Commitments for HenQ III came from a 30-40-strong LP base, the vast majority of which have a Dutch origin.

Although a breakdown was not provided, unquote" sources confirmed more than half the capital was sourced from four institutional investors, including the European Investment Fund (EIF) and large family offices. Meanwhile, the remainder came via a number of software entrepreneurs, among others. 

Investments
HenQ III is expected to invest in up to 20 companies within the next five years. Speaking to unquote", HenQ partner Coen van Duiven explained the majority of businesses will be first backed with €100,000-500,000 in seed financing, with the possibility of subsequent rounds of up to €10m for those performing strongly. However, the fund might also seek companies at a later business stage.

In addition, the vehicle will look to co-invest alongside fellow VCs that HenQ has worked with in the past, such as Sequoia Capital, Index Ventures and Excel Partners.

The fund will prioritise companies within the software segment and with headquarters in the Netherlands – up to 75% of the capital will be dedicated to businesses from the country, with the remaining 25% available to those from abroad.

Although the fund has yet to see its maiden deal, van Duiven said HenQ is currently working on at least two transactions featuring Dutch companies – completion is expected before year-end.

People
At the helm of HenQ III will be the firm's partners Herman Hintzen, Coen van Duiven and Floris van Alkemade. The three will oversee a team featuring four additional people.

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