Connected Capital Closes €154 Million Second Fund Targeting European B2B SaaS Scale-Ups as Global Demand for Cloud Software Grows
Amsterdam-based Private Equity Firm’s Second Fund is 3x Size of Previous Fund and Brings Total Assets to over €200 Million; New Fund Makes Connected Capital The Largest Pure-Play B2B SaaS Investor in Europe
Connected Capital, a leading investor exclusively targeting European B2B SaaS businesses, announced the close of its oversubscribed €154 million Fund II, bringing the firm’s total committed capital to over €200 million. The fundraise welcomed new blue-chip institutional investors alongside returning LPs, as well as a substantial GP commit.
With this new fund, Connected Capital will continue its hands-on investment approach helping founders expand their operations. In addition to continuing its current strategy of investing in growth-stage B2B SaaS companies, the firm is now also evaluating businesses in the buy-out stage and considering investments up to €40 million.
“New, innovative, and scalable solutions are unlocking functionality at an incredible speed. It is inspiring to support cloud-based business models, and our second fund will help us have more impact on SaaS growth and innovation in the next few years,” said managing partner Mathijs Robbens. “Rather than considering a broad range of tech segments, we derive our success from being fully focused on B2B SaaS models. This focus is a key enabler for us to support our portfolio companies with practical and relevant growth expertise.”
To date, Connected Capital has successfully completed nine platform investments across Europe. Its investment in SurePay, a FinTech company providing Confirmation of Payee SaaS payment solutions to banks and corporates, was its first from Fund II. Fund I continues to support the international growth of its portfolio companies: Foleon, a MarTech platform to create adaptive digital content, has grown aggressively in both Europe and the U.S.; Speakap and Concentra Analytics — both HR tech — have shown accelerated global growth since Connected Capital invested.
Portfolio companies Omnia and ChannelSight provide critical digital tools that help retailers and brands execute their e-commerce operations more effectively. Recently, Connected Capital completed investments into high-performance cloud hosting specialist UpCloud and virtual event platform Brella. Additionally, the team has been the driving force behind the merger of Onegini and iWelcome to form OneWelcome, the leading European provider in Consumer Access and Identity Management.
Leading the Accelerating Growth of B2B SaaS in Europe
Despite the pandemic, 2021 was another record-breaking year for the European enterprise software ecosystem. As confirmed by a plethora of research, B2B SaaS is growing rapidly and thereby maturing as an industry and investment category. Specifically, Atomico – in its State of European Tech report – notes that European investments in B2B software grew by $5.9 billion (+89%) in 2021, thereby outperforming most other tech segments.
Moreover, BVP’s State of Cloud 2021 report states that over the past decade there has been a 10x increase in the dollar amount going into private cloud businesses. “Historically, the U.S. has led the way in B2B SaaS, but Europe has started to catch up very fast,” said Robbens. “Cloud-based businesses are quickly increasing in terms of sales and growth and that brings huge opportunities.”
But while news of newly-minted unicorns and high valuations steal the headlines, Connected Capital has stayed focused on fundamentals. Recurring revenue, healthy gross margins, strong customer retention, and a scalable customer acquisition model are among the firm’s most important investment metrics.
Above all, Connected Capital identifies founders with perseverance, self-awareness, and an open mind. “We look for founders with a thoughtful and pragmatic tolerance for risk, who can also recognize their strengths and weaknesses in order to build a larger pool of talent and delegate properly,” said Robbens. “Strong fundamentals are key for business growth, but a flexible, diverse and adaptive team is what makes success sustainable in an evolving, competitive industry like B2B SaaS.”
A Differentiated and Hands-On Team Leads to Unmatched Success
Connected Capital was founded in 2017 by managing partners Wim Haring, Geert van Engelen, Mathijs Robbens, and Olaf te Spenke. The investment team has executive experience at Waterland, Credit Suisse, Freshfields, Bain, and BCG, among others as well as operational experience at SaaS technology companies. As a result, the combined knowledge of private equity, consulting, and SaaS operations sets a high standard for Connected Capital’s deal sourcing and due diligence processes.
It also positions Connected Capital as a strategic investor in companies that want to scale outside of their home countries. The team has an extensive network to help their founders set up the right leadership as well as grow their revenue in new markets.
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HR Tech company Speakap, for example, opened their first non-European office with the help of Connected Capital. “With their support, we opened an office in New York, but that also brought the challenge of building a team overseas,” said Speakap CEO Patrick Van der Mijl. “The Connected Capital team supported us on the ground in the U.S. and helped us structure the setup of the North America team. Their commitment to supporting founders is exceptional.” The company now has over 500 customers across the globe, serving industries such as hospitality, manufacturing, food service, and logistics.
In 2021, Connected Capital supported secure identity management platform OneWelcome (previously iWelcome) during their merger with Onegini. “With mixed backgrounds in private equity, strategy, and legal, the Connected Capital team truly offers a lot of value-add,” said OneWelcome CEO Danny de Vreeze. “We’re glad that our mission resonates with them, and they’ve been hands-on from the beginning.”
ChannelSight CEO John Beckett agrees. Since receiving investment and support from Connected Capital, the e-commerce solution has more than doubled their team and their revenues. “Connected Capital really gets involved to drive the success of the business, but doesn’t get in the way,” said Beckett. “Connected Capital’s approach is refreshing, and their perspective helps us think differently about how we grow ChannelSight.”
In order to ensure the strategic and operational support to their portfolio companies, Connected Capital plans to create a compact portfolio of companies in the new fund. “Our ambition is to become the most sought-after B2B SaaS investor in Europe. Obviously the most important ingredient of that is the value we bring and our portfolio companies and founders benefiting from that,” said Robbens. “When we invest in a company, we commit to the founders and we do everything we can to help their companies accelerate growth.”
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