KKR holds $2.2bn final closing for second tech growth fund

Alessia Argentieri
16 January 2020

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KKR has held a $2.2bn final closing for KKR Next Generation Technology Growth Fund II (NGT II), surpassing its initial $1.5bn target.

Launched in November 2018, the fund is dedicated to growth equity investment opportunities in the technology space in North America, Europe and Israel.

The vehicle is more than three times larger than its predecessor, KKR Next Generation Technology Growth Fund I, which closed on $711m in December 2016.

KKR has invested $2.7bn in technology companies since 2014 and built a dedicated global team of 19 investment professionals with technology expertise. Its recent transactions in the sector included the investments in KnowBe4 and OneStream.

Investors
NGT II received backing from a diverse group of new and existing global investors, including public pensions, insurance companies, family offices and high-net-worth individuals. In addition, KKR will invest more than $265m in capital in the vehicle through the firm's balance sheet and employee commitments.

Investments
The fund invests in both majority and minority stakes, and targets companies with enterprise values of $30-300m, operating in a wide range of tech sectors, including enterprise software, security, internet, digital media, fintech and data services. It will deploy equity tickets in the $50-150m range.

KKR intends to support its portfolio companies with fresh financing for growth and expansion, as well as with its operational and industry expertise and network.

People
KKR – Dave Welsh (partner, head of technology growth equity); Alisa Amarosa Wood (partner, head of private market products group).

Technology fundraising update

2019 was a very successful year for technology-focused funds; they raised around $11bn in capital across 14 final closes, according to Unquote Data. An increasing number of generalist GPs have eyed the sector, and built tech-dedicated teams and platforms to harvest the opportunities offered by the industry, joining tech-focused investors and venture capital houses.

The largest fund closings held last year included Technology Crossover Ventures Fund X, which closed on $3bn; Advent Global Technology I, which held a final close on its hard-cap of $2bn; CVC Growth Partners Fund II, which closed on $1.6bn; and Carlyle Europe Technology Partners IV, which held a $1.5bn final close.

The Nordic region was particularly active in the tech space and recorded two large closings: EQT Ventures II, which held a $740m final close in November; and Northzone IX fund, which closed on $500m also in November, after only five months on the road.

Furthermore, several tech-dedicated funds are wrapping up their fundraising and are expected to hold their final closes in 2020: among them are Rocket Internet Capital Partners II, which was launched in Q2 2018 with a $1.5bn hard-cap and held an interim close on $679m in October 2019; and Slingshot Ventures, which aims to raise up to €100m across two vehicles in the first half of 2020.