Octopus moves into later-stage funding with new £140m vehicle

The new institutional fund sees Octopus move into the later-stage funding space. Zenith Opportunities II will focus on follow-on investments for existing Octopus portfolio companies. To a lesser extent, the fund will also be used to back new businesses.

While Octopus has traditionally focused on venture investing at the early stage via its range of VCTs, the firm stated that the development of a more mature technology sector and the rising valuations of such businesses in Europe was a key factor for moving into the later-stage space.

The fundraising effort took around two months to complete, according to Octopus. Bluetower Associates advised the VC on the fundraising, which attracted a mix of existing institutional investors and new backers.

Investments
Octopus will use the fund to inject between £250,000-25m per deal. The vehicle will predominantly back existing Octopus portfolio companies, although Octopus will also have the option to invest in new businesses - the latter will most likely involve companies that the VC came into contact with in the past but couldn't back via its VCT funds.

The vehicle will make around five to six investments across its lifespan. Octopus anticipates that the deployment period will last for two to three years, given the focus on follow-on investments in existing portfolio companies.

Zenith Opportunities II has already made its first investment, having taken part in the recent $60m series-C round for Secret Escapes, a UK-based online holiday booking platform.

People
Alex Macpherson is the head of Octopus.

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