One of Europe’s most active VC investors, DN Capital has made more than 100 investments into 60+ early stage start-ups through seed or growth stage rounds, often to enable start-ups to scale internationally. The firm prides itself on its “start-up mentality” and are searching for the next Google, Facebook, or Shazam, they say.
DN are perhaps best known for helping usher music recognition app Shazam into the “Unicorn Club”, participating in a £30m Series F funding round in February 2015, led by Buran Venture Capital, which valued Shazam at more than $1bn dollars, making it one of the first five British companies to have achieved the feat.
In July last year, DN helped create another, backing a Series D round into Auto1 for $117.6m; the used car marketplace start-up, which valued the company, founded by ex-Groupon employee Christian Berterman, at more than $1 billion.
Other notable investments made by the firm, who have offices in London, Berlin and Menlo Park, California, include vacation search and price comparison tool hometogo, prop-tech online estate agency Purple Bricks, which listed on London’s AIM market in December 2015, raising £58m, SeedCamp, and on the down side, recently shut down JustEat and Deliveroo rival Take Eat Easy.
Last week the firm announced that they are raising a fourth fund, launched in April this year, which is now almost completely subscribed, with a target of raising €200m.
DN are led by Managing Partners Nenad Marovac and Steve Schlenker, with John Helm as Venture / Operational Partner and Thomas Rubens and Lawrence Barclay as Principals.
The firm also has access to an impressive network of “Industry Advisors”, which includes Jay Stevens, General Manager at Rubicon, Ben Lewis, co-founder at Karma Science, and serial entrepreneurs Lee Linden, an early investor in Facebook, and Fabrice Grinda.
DN invest across 5 industry sectors; Digital Media, Ecommerce, Enterprise Software, Marketplaces and Mobile Applications, although each sector is governed by stringent criteria which narrows down the field of potentially investable companies.
Only seed, Series A and Series B rounds are considered, unless a bootstrapped company can show it has achieved sustained growth over time, according to the company website.
“We generally like to go in early”, the site reveals, “often times writing checks as low as €250,000 in very young businesses to help craft the DNA of the company.” Subsequently, the investment amounts grow as a start-up finds “product market fit, expands internationally, and becomes a global leader.”
DN Capital were invested in Shazam, for example, from as early as 2004, according to data from CrunchBase, and first backed Start-up incubator SeedCamp in 2010, before the explosion of interest and mass-participation in start-up accelerators.
In common with most of their investor peers, DN Capital also say that “finding a great team, in a massive market, with a product that is gaining rapid traction – that’s a winning recipe for us”.
As good as DN’s record is, if only picking winners were so simple!
DN say they are primarily a European fund with a particular emphasis on the UK and Germany, which certainly makes sense as the two countries are by some distance the biggest of incubators of successful start-ups who gone on to raise serious funding and achieve similarly respectable valuations. Of Europe’s 47 “Unicorn” businesses 18 are based in the UK, the most, and 6 in Germany, in third place after Sweden (7). DN are also occasionally active in the Nordics.
The rest of the firm’s resources are directed towards the US, and Silicon Valley, in particular.
DN’s only IPO to date has been Windel.de, an online retailer specialising in baby and toddler products in May 2015, which went public on the Frankfurt Stock Exchange with an issue volume of €211m, and market cap of €426m
13 portfolio companies have been acquired, however, the most recent at the time of writing being Mobile Roadie, by Intellectsoft, for an undisclosed amount.
Having raised a fourth successive 9 figure war chest, expect to see more of the same from DN Capital for the foreseeable future. Perhaps the US / European axis can play a pivotal role in the emergence of Europe’s first ever decacorn?