Nordwind reaches first close for debut technology fund

NC Growth Fund I expects to reach its hard-cap by summer 2022, managing director Christian Plangger told Unquote.

Poellath is providing legal advice on the fund. Nordwind is not using a placement agent, Plangger said.

Norwind Capital was originally formed in 2003 by former Carlyle Europe co-founder and co-head, Hans Albrecht. The firm originally focused on industrials sector deals and invested via a fund, but the GP pivoted its strategy almost 10 years after its formation.

“We re-started Nordwind as a deal-by-deal growth investment company in 2012, mainly using our own money, plus contributions from a couple of friends,” Plangger said of the firm’s development. “We invested equity tickets up to EUR 30m, mainly in high-growth technology companies in the German speaking region.”

The GP has previously backed more than 10 technology companies via its deal-by-deal strategy, according to a statement. However, the firm decided to raise an institutional fund to develop its strategy, Plangger said. "The reason we decided to raise a new fund was mainly due to the limitations of the deal-by-deal structure, such as the volume we could invest per year. We are also at a stage where we need to do additional fundraising rounds for our portfolio, and from an administrative point of view, it is more complex to get the deals aligned with several co-investors."

Norwdind had a team of four prior to the fundraise and now has seven people; it expects to make further new hires, Plangger said.

Investors
NC Growth Fund I has reached its first close with backing from Switzerland-based Opra Invest, as well as several existing investors who are high net worth individuals, Plangger said.

Asked about the fund’s expected LP base as the fundraise continued, Plangger told Unquote: "We are expecting more institutional investors for the final close, including endowments and funds of funds, mainly from Europe and the US. We have had a positive response and good demand for our strategy."

Investments
The fund will focus on growth technology investments, focusing on DACH-based companies. It expects to invest in seven to eight companies, investing EUR 10m-EUR 40m per deal, Plangger said. B2B software, e-commerce enabling and combined hardware/software companies are of particular interest, he added, although the vehicle will look at.

"We are looking for primary investments, which would typically be bootstrapped companies or companies who only have angel investment money so far," Plangger said. "We make both primary and secondary transactions, and it’s important for us that the founders stay involved and still have skin in the game."

The firm generally takes minority stakes in the companies it invests in, Plangger said, but it is also open to taking significant minority stakes of more than 30%.

"We have just made an investment from the fund in a financing round for one of our existing companies, and we have two deals in exclusivity that we expect to sign and close in the next quarter," Plangger told Unquote.

The GP’s previous technology investments include Germany-based no-code platform developer SmapOne, as well as sales and marketing process optimisation software platform B2B Media Group.

People
Nordwind Capital – Christian Plangger (managing director).

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