CapMan announces second growth fund; invests in DSP Neural

Eliza Punshi
06 August 2020

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Finnish investment firm CapMan has announced its second growth fund, CapMan Growth Fund II, held a first close on тЌ74m in July and is targeting тЌ85m.

Managing partner Juha Mikkola told Unquote that the fundraising took two months and was carried out remotely, as the majority of the LPs were existing investors. The fund is expected to hold a final close in a few weeks.

The new growth fund is the same size as its predecessor, which closed at the end of 2017. Mikkola said CapMan Growth Equity Fund is nearly fully deployed, with a small amount retained for potential add-ons.

CapMan's own investment commitment in the new fund is €10m. The VC did not appoint any placement agents or advisers for the fundraise.

Investors
The LP base is mostly made up of existing investors, and comprises institutional investors as well as local entrepreneurs, such as Ilkka Paananen, Mikko Kodisoja, Aaro Cantell, Jarkko Veijalainen, Georg Ehrnrooth and other Finnish entrepreneurs.

Investments
The fund will make minority investments in 8-12 companies with a turnovers of €5–100m. The size of investments will vary from €3m to €20m and will mostly be in the form of co-investments.

Mikkola said the strategy for the fund will be largely the same as the previous one: "The only difference now is that we have to be more selective. We are actually looking for companies that are benefiting from Covid-19 instead of suffering from it, like software and AI companies."

The VC has already made its first investment in Finnish company Neural DSP, which creates sound processing software and hardware for musicians. CapMan Growth acted as lead investor in a €5m series-A round, which was also attended by the company's previous investors, as well as influencers in the music and technology sector.

Neural DSP was founded in 2018, and employs 35 staff. Mikkola told Unquote that it is already cash positive and growing each year by more than 100%

People
CapMan Growth – Juha Mikkola (managing partner); Antti Kummu, Heikki Vesterinen (partners).