Cipio holds EUR 202m final close for Fund VIII

Cipio VIII was launched in October 2020 and surpassed its EUR 200m target, having held a EUR 122m first close in April 2021, Managing Partner Diana Meyel told Unquote.

"We had a speedy first closing due to our existing investor base – particularly during the pandemic, it's even more important to have loyal investor base," Meyel said. "With our existing investors, it was easy to do things virtually. But for our new investors, I tried to travel as much as I could. We only have very few LPs who invested without having met us in person, and these came on the recommendation of existing investors."

The fund's predecessor, Cipio VII, held a final close in 2017 on EUR 174m. The fund has made three exits to date, returning 70% of its capital to its LPs, Meyel said.

The fundraise for Cipio VIII comes at a time of change for the GP. "We have successfully managed the succession of our founders Werner Dreesbach and Hans-Dieter Koch with this fund," Meyel said. "They are still backing us, and Hans-Dieter is still operationally involved, but now Roland Dennert and I lead the firm. This was an important milestone for us, and the fundraising was the proof point. We now have a good basis to grow as a firm."

The GP has developed and is continuing to work on an ESG strategy, Meyel said; the firm invests in line with the UN PRI and is carbon-neutral.

Investors
More than 80% of Cipio's LPs re-upped for Cipio VIII, Meyel said. The majority of Cipio VIII's commitments are from European and US family offices, with the remainder coming from sovereign wealth funds and public organisations such as the EIF, as well as and institutional investors including banks and insurance companies.

In terms of geographies, the fund comprises LPs from Luxembourg, Germany, Austria, Estonia, Switzerland, Spain, Belgium and the US, Meyel said.

Investments
"We provide growth capital and minority buyout solutions to companies that have outgrown the venture stage and that need a financial partner to help scale their business ahead of a liquidity event," Meyer said of the firm's strategy.

Cipio VII invested in 16 companies and Cipio VIII expects to do the same, with initial ticket sizes of EUR 5m-15m and a focus on companies with revenues of EUR 10m-50m. The fund has made two deals to date, Meyel said, and the fund expects to make four to six deals per year. Cipio VIII will invest 70% of its capital in the EU and has a pan-European strategy; its core markets are Germany, France and the Nordics.

"Looking at what drives our deals, it's first and foremost about the primary growth capital needs of the deal, and the secondary component comes as part of this," Meyel said. "We invest in technology, but we are mostly sector agnostic and opportunistic within this. We do a lot of B2B software- SaaS as well as deeptech and semiconductors, and we look at internet and consumer deals such as marketplaces, too. We don't do life sciences, although we would look at digital health, where there is an overlap with technology." Cipio targets companies growing at around 30%-60% per year, she added.

"Growth companies that are of excellent quality will always manage to attract capital at excellent valuations. In Europe, and in technology in general, there is substance in the market and this will remain, with digitisation and transformation continuing," Meyel said.

The current macroeconomic environment could present opportunities for Cipio's strategy, Meyel told Unquote. "Looking at single assets, which we did exclusively in the last fund, there are always complex situations with syndicate structures where an investor might want to leave, or a company might need a small financing round with just existing investors plus one new investor with a smaller ticket," she said. "A lot of huge financing rounds have been raised in the last few years, but there will now be situations where people just want to expand or extend the last financing round rather than be in the market for a big new one, and these are the right situations for us. If there were a crisis and recession ahead, we could eventually be looking at portfolios of assets which are a cyclical component of our dealflow."

People
Cipio Partners – Diana Meyel, Roland Dennert (managing partners).

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