Newion eyes EUR 140m for new B2B software fund

Newion IV, which held a first close on EUR 130m last month, counts among its corner investors LPs in previous funds such as BNP Paribas, PMV, the European Investment Fund and some family offices. The sponsor has seen a group of new LPs joining the new fund, including Dutch family office Reggeborgh.

The new vehicle is significantly larger than its predecessor, Newion III, which closed on EUR 85m in 2017.

Investment plans
Newion IV is expected to make around 23 investments, having already made three deals, including with Dutch facilities management company Legionella Dossier and Dutch provider of employee benefits platform YourCampus. It is expected to be 55% deployed in five years and make around 5-6 investments per year, Pollack said.

The vehicle will follow the same investment strategy as its predecessor, although with larger tickets of up to EUR 4m in initial investments and up to EUR 13m for the lifetime of a portfolio company.

It will target B2B software companies with revenues ranging from EUR 15,000 to EUR 150,000 per month and that are located in the Benelux, the Nordics and Germany.

The sponsor has made an exit of a Dutch technology company Asysco this summer, and plans to make two more, Pollack said.

Opportunity funds
Newion has launched opportunity funds alongside its main investment vehicles with the goal of supporting existing portfolio companies as co-investments, Pollack said. The firm has launched a EUR 50m opportunity fund for Newion III, planning to reach a close in the summer of next year and with investments planned for around five companies. This fund has already received all its commitments and will support the existing portfolio businesses at Series C, D and E investment rounds.

The opportunity funds do not charge management fees and were initiated as additional return makers for the existing LPs, with limited carry, Pollack said.

The sponsor also plans to raise an opportunity fund for Newion IV by around 2025, with the amount to be determined and commitments already made.

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