Target Global holds first close for second growth fund on €300m

The fund is targeting €400m and has a hard-cap of €600m. Target Global began raising early in 2020. Alexander Frolov, CEO and general partner at the firm, said: "We focused on our existing investors base, which re-upped quite actively." He expects to hold a final close before the summer of 2021.

The fund is the venture capital firm's largest vehicle so far and is the second to focus on growth investments, targeting companies at a later stage than its previous funds. Target Global I closed on €300m in 2015 and is now fully deployed.

Frolov said: "Quite clearly there is growing interest in the DACH scene, and traditional LPs are more interested to talk and make commitments in venture. Particularly in growth-stage investing, there has been a lot of interest, perhaps driven by growing valuations in the IPO market. People feel there is plenty of upside to be made.

"In general, especially at the beginning of the pandemic, some LPs put things on hold, but that's not really happening anymore."

Target Global is currently deploying from a number of vehicles. Early Stage Fund II held a first and final close in February 2020 on €120m.

The GP is headquartered in Berlin, with additional offices in London, Tel Aviv and Barcelona. The fund is domiciled in Luxembourg and has management fees, carry and hurdle rates in accordance with market standards.

Investors
LPs in the vehicle include Feri Group and Switzerland-based UBS Wealth Management. The fund also received backing from its existing LP base, according to a statement. The fund has more than 50 LPs, with investors from Europe and Asia, though Frolov said: "The closer to home you are, the easier it is to raise."

Investments
The fund will target companies with valuations of around €50-200m, investing at series-B and -C, and deploying equity tickets of €10-30m for initial investments. Investments that have previously been sold by the firm had an average holding period of around five years.

The firm has historically invested 70% of its fund capital in Europe, with 20% in Israel and 10% in the US. Target Global will focused on technology-enabled companies, in particular marketplaces, software-as-a-service developers and financial technology businesses. It will also look at healthcare, retail and consumer brands, as well as industrials and the automotive sector. "We traditionally focus on very large markets where, even by taking a tiny portion, our startups can still be very significant in size," said Frolov.

The GP's previous investments include listed food delivery company DeliveryHero, as well as Auto1 and WeFox.

Frolov said: "We are working on several opportunities very actively right now. Term sheets will go out before the end of the year and we expect the first executed investment in Q1."

People
Target Global – Alexander Frolov (general partner, CEO); Yaron Valler (managing general partner).

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