Newfund holds €100m first close for second fund

The fund has a target set at €150m and a hard-cap of €180m. It is a significant step-up from Newfund 1, which closed on €72m in 2009, short of its €80m target. However, Newfund 1 was completed with an additional FPCI pocket of €35m called Booster 1 in 2014.

Newfund 2 was launched in July 2016, and should reach a final close by year-end, with the subscription period coming to an end in six months.

The firm also recently announced the appointment of Henri Deshays, who will be based in the firm's newly launched San Francisco office and will focus on investments in the region. Around €30m of Newfund 2 should be dedicated to US investments.

Michel Meyer, who previously led the firm's investments as venture partner in the US, will now focus on the development of startup Presence, backed by Newfund and co-founded by Meyer in 2016. He will keep on advising Newfund on future investments.

With the previous fund, Newfund had backed a dozen US-based entities, including Aircall, Tradelt, Avanoo, In2Bones and others, representing around 20% of the vehicle. Other non-US investments with Newfund 1 included Limonetik, Eqinoy and FlexyBeauty. In total, the group reports having made around 60 investments.

Newfund 1 still has 40 companies in its portfolio, with around 20% of the fund still to be invested. Around 65% of commitments have so far been returned to investors.

Duhamel Blimbaum Cabinet d'Avocats and Jones Day advised Newfund on the fundraise.

Investors
Similarly to Newfund 1, most of the funding for Newfund 2 comes from entrepreneurs and family offices (around 95%, according to the source). The rest comes from institutional investors.

Around 20% of the commitments come from foreign investors, excluding Benelux and Switzerland, a source familiar with the matter said.

Investments
Newfund 2 will focus on early-stage and first rounds of funding exclusively. Investment tickets will vary according to the region: in the US, the GP will invest between €200,000-300,000 for seed rounds (as part of larger rounds amounting to €500,000-1m on average), and around €4-5m for first rounds, aiming to take 5-10% stakes in businesses overall. In France, meanwhile, equity tickets should vary between €500,000-2m. In terms of turnover, the companies should achieve between €100,000-2m on average.

The main difference, according to the source, is that in the US, Newfund generally invests alongside other GPs due to the larger size of the market and of target companies, while in France, it is able to structure funding rounds by itself.

The fund will not target any specific sector, but will focus on groups with a strong potential for innovation, and which already generate a turnover.

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