Northzone Ventures

Northzone Ventures, a venture capital firm specialising in early stage Nordic IT and telecom start-ups, has held a second close of its latest fund, Northzone IV K/S, on EUR 23m. This latest closing increases the fund's investment capacity to EUR 70m. Northzone IV is structured as a 10-year Danish K/S (limited partnership), while the advisory parallel vehicle and General Partnership are based in Jersey. The fund's ultimate target is EUR 85m and management fees have been set at 2.5% with a 20% carry. The GP contribution to the fund is 2%.

Investors

Northzone IV K/S has secured commitments from leading Nordic and international institutional investors. French group Access Capital Partners and Switzerland-based Swiss Re were the main new investors in the second closing. Existing investors from the first closing, Argentum Fondsinvesteringer (Norway), Gjensidige Nor (Norway) and LGT Capital Partners (Switzerland), also took part in the closing and increased their commitments.

Investments

The fund will remain loyal to the same investment strategy as the previous Northzone vehicles, namely focusing on the IT and technology sectors. The fund will not consider firms involved in biotechnology and life sciences. As a general rule, the fund looks to invest in early-stage firms, although some development-stage financing will be provided in the case of follow-on investments. In terms of the size of investments, the fund has a formal ceiling dictating that no more than 15% of the total raised capital may be applied to any single transaction. In real terms, the typical size of any one first-time commitment will be between EUR 1m and EUR 3m, although 35% of the total fund size may be applied to follow-on investments. In most instances the fund co-invests with other venture funds which can offer complementary skills. Geographically, the fund targets only Norway, Denmark and Sweden and Finland. With respect to the returns on investments, the management of the fund anticipates the most common exit route will be industrial exits and trade sales. Northzone IV has to date made three investments; in Cryptico, a Danish developer of data-encryption technology; in Swedish firm SafeLogic AB, which develops EDA software for IC design verification, and most recently in Swedish internet firm Pricerunner AB.

People

The fund is managed by a team of eight investment managers with backgrounds in IT, consulting and finance. These are Tellef Thorleiffson, Björn Stray,Karl-Christian Agerup, Ingar Østby, Jörgen Bladh, Arve Johan Andresen, Torleif Ahlsand, Gregers Kronborg and Pär-Jörgen Pärsson

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