Dawn Capital launches $700m fund for early-stage software start-ups

The new investment scheme — Europe's largest early-stage fund of its kind — comes as B2B software start-ups in the region maintain growth ambitions

The new fund from London-based Dawn Capital — the portfolio of which currently includes PayPal subsidiary Zettle, as well as Mimecast and Quantexa — was closed at a “hard cap” earlier this year.

Up to $620m of the funding to be allocated will be made up by ‘Dawn V’, dedicated to early-stage (Series A and B) B2B software start-ups with initially secured payments of $10m to $40m.

Having secured half of commitments from new investors, the scheme also includes an $80m follow-on fund for later-stage funding, named ‘Dawn Opportunities III’.

According to a statement from the venture capital firm, a major goal for the fund is to help European founders take advantage of foundations put in place to underpin the most prominent tech stacks of the future.

“I love entrepreneurs who are scrappy and who build in the trenches, with an understanding of the problem and their heart in it,” Evgenia Plotnikova, a general partner at Dawn Capital, told The Times.

“So I think people who are starting businesses today will actually be the kind of entrepreneurs that can see through the trying times to build enduring businesses.”

Plotnikova went on to state that the software start-ups Dawn looks out for are “in that inflection point — they’re not at birth, but they’re still not quite teenagers. Maybe they’re somewhere in the toddler phase in terms of the journey to maturing.”

Norman Fiore, co-founder of Dawn, commented: “We are at the very beginning of another major technology shift. As our entrepreneurs like to remind us, AI has been around for a long time. The change today is that AI has pushed its way from the engineering teams into the boardroom.

“Its coming prevalence makes it both an investment area in itself as well as a disruptor to every software category we’ve been investing in since we founded Dawn. We were therefore determined to raise funds of commensurate scale to the enormous opportunity before us.”

Spending on software globally ascended the $1tn mark this year, as businesses look to use tech to continue meeting evolving customer demands, and mitigate new societal challenges including climate change, energy transition, financial inclusion and drug development.

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Aaron Hurst

Aaron Hurst

Aaron Hurst is a senior reporter for Information Age, providing news and features around the hottest trends across the tech industry.

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Early Stage Funding