Investment in European technology companies has grown vastly, increasing from around $20 billion in 2017 to over $100 billion in 2021, but European-based investors only made-up 30 per cent of investors in growth-stage rounds in 2021.
Enter Stockholm-based EQT Growth, which has rolled out €2.4 billion fund to support 20-25 fast-growing technology companies in Europe. According to the company, it is the largest first-time growth fund based in Europe.
Targetting a ticket size between €50 million to €200 million, the fund will back strong management teams of companies supported by secular macro trends primarily within four tech sub-sectors - enterprise, con/prosumer, health, and climate. It will explore opportunities at the point where companies have achieved product-market fit and are taking the next step to scale.
The fund will hold stakes of between 5 and 40% in these businesses. It has already made seven investments, including Lithuanian fashion marketplace Vinted, Swedish music company Epidemic Sound and Mambu.
Having invested in technology for nearly three decades, EQT sees the large opportunity for a growth investor with European roots and local expertise and capabilities to help elevate the region’s tech innovators to the world stage.
Marc Brown, partner and head of EQT Growth’s advisory team, said: “The speed at which the European and Israeli tech ecosystem has developed over the past decade is a testament to the number of innovative, young companies that call the region home. However, a lack of growth-stage capital and European investors with scale-up expertise has meant that many of these firms have gone elsewhere when embarking on the next step of their journey.”
The fund is backed by a global and diverse group of investors including pension funds, sovereign wealth funds, asset managers and high-net-worth individuals from across Europe, Asia, North America and the Middle East.