Europe’s ongoing shortage of growth capital has prompted some early-stage investors to take action themselves. Notion Capital, based in London, is among those leading the charge.
Back in 2017, Notion Capital was one of the pioneers in Europe to launch an opportunities fund, providing additional funding to its existing portfolio companies. Now, the firm has secured a $130 million growth fund—almost double the size of its last one—which, as TechCrunch has exclusively learned, will also target investments beyond its own portfolio.
According to managing partner Stephen Chandler, American venture capitalists who previously helped fill Europe’s growth funding gap are now prioritizing their domestic market. “That creates a window for European firms like ours to step in and become true leaders on the continent,” he said.
Notion’s new Growth Opps III fund aims to back European businesses responding to the rising need for sovereignty, such as those in defense and supply chain logistics. Like many others, the firm is also keen on AI, which Chandler describes as a major wave fundamentally transforming how software is built and used.
Rather than investing in foundational infrastructure like large language models, Notion Capital is focusing on the application layer, where Chandler believes there is significant potential for market expansion. While the firm’s main fund has traditionally favored SaaS, cloud, and fintech, these sectors will now incorporate AI and be joined by new focus areas.
The firm plans to make around twelve investments and has already begun deploying capital from the new fund. So far, deals include Upvest, a stock trading API from its early-stage portfolio, as well as external companies like Kraken, which develops dual-use unmanned surface vessels, and Nelly, a startup offering software and financial solutions for healthcare, according to Notion Capital.
To ensure what Chandler calls “strong objectivity,” follow-on investments will be handled by dedicated growth fund partners, who will also actively seek out new growth-stage opportunities beyond the existing portfolio.
One of these partners is Stephanie Opdam (pictured left), who will now lead this growth initiative alongside Jessica “Jess” Bartos, previously a principal at Salesforce Ventures. Bartos, an American, is Notion Capital’s first external partner hire; all previous partners were promoted from within.
“Since this was a new approach for us, we thought bringing in outside expertise at the growth stage would be valuable,” Chandler explained.
Future growth funds may be easier to raise. Although Europe has historically lacked pension fund investment in venture capital, several countries are now introducing incentives, such as France’s Tibi initiative and the U.K.’s Mansion House Accord.
Despite its British origins, Notion Capital is not limited to the U.K.’s regulatory environment; the new Growth Opps III fund is euro-denominated and based in Luxembourg.
To launch this new fund—which brings its total assets under management to over $1 billion—the firm leaned on its established network of limited partners across continental Europe, the U.K., MENA, and the U.S.
“Roughly 85% of our capital comes from institutional investors, and within that, we’re very geographically diverse,” Chandler noted.
While recent moves to unlock long-term institutional investment “didn’t really play a role in this fund,” Chandler added, “the outlook is very encouraging, which bodes well for addressing the core issue of growth capital shortages in Europe.”
If these new efforts succeed and more limited partners join growth-stage investing, Notion Capital could face increased competition—especially at the growth stage, where it is less entrenched than in early-stage investing. Still, Chandler sees the two as closely connected.
“Our main edge in this growth strategy comes from the reach we’ve built through our early-stage investments,” Chandler said. “Most growth funds don’t have that—they’re only sourcing deals at the growth stage once companies have already gained scale and momentum.”
By contrast, Notion Capital has built long-term relationships with founders, supported by an active platform team, and can be flexible with investment amounts.
Even as its focus broadens, Growth Opps III’s greatest asset is arguably Notion Capital’s existing portfolio. Since its founding, the firm has backed over 150 startups, including Currencycloud, GoCardless, Mews, Paddle, and Quantum Systems. While some have exited or predate the AI boom, the remaining companies could become future leaders—a track record that may encourage external companies to accept their growth funding, even if growth capital becomes more available in Europe.
This article has been updated to clarify that Notion Capital invested in Kraken Technology, not Kraken, the Octopus Energy spinoff.
