eEquity holds €60m first close for third fund

Founding partner Patrik Hedelin told unquote" eEquity III has an €80m hard-cap, which the GP expects to hit within six months as there is strong demand for the fund. Monaco-based Athos Partners is acting as placement agent for the vehicle.

The fund will follow industry-standard terms and have a 10+1+1 lifespan.

The latest fund is the third fund raised by the Stockholm-based venture firm in just five years, having been founded in 2010. Its current portfolio consists of seven Nordic internet companies, predominantly focused on online retailing.

Previous exits completed by eEquity include B2B rollup and display-materials website Rollup Kungen and Danish white goods online retailer WhiteAway. The latter was part-owned by secondaries direct investors Verdane, which acquired stakes in the portfolio companies of eEquity's first fund through a direct secondaries transaction in 2013.

The VC claims eEquity III's predecessor has had an annual growth rate of 60% from when it was deployed until today, and has completed its investment period.

Investors
LPs in eEquity III are all institutional investors, with both existing and new backers. While the minimum commitment to the fund is €3m, the smallest commitment so far has been €6m.

The fund's investors include institutional backers from Sweden, Norway, Belgium, Luxembourg and the UK.

Investments
eEquity III will follow the same strategy as its predecessor, backing Nordic internet companies with a particular focus on online retailing.

Companies targeted by eEquity will be profitable growth companies, with revenues of more than €5m and high working-capital needs.

Hedelin said the GP's typical strategy is to initially take a minority stake and subsequently increase to a majority shareholding over several rounds of investments. The firm has historically only invested in proprietary deals and Hedelin said eEquity has a very strong proprietary deal flow pipeline, expecting to continue the previous strategy in fund III.

The GP will look to make 10-15 investments from the fund, with an average size of €7m net of fees.

People
Patrik Hedelin and Magnus Wiberg are the founders of eEquity. Hedelin co-founded British online fashion retailer in 1998, while Wiberg is the co-founder of price comparison website Pricerunner.

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