Netherlands-based venture capital house Favonius Ventures has reached a first close of $77 million on its software and communications fund. Launched last July, Favonius Ventures Fund has been struggling in a difficult fund raising climate, but is now well on the way to reaching its $150 million target. Managing director Roel Pieper, the Dutch-born former senior vice president of Philips Electronics NV, said: “Fund raising is a challenge and I expect that very few funds will be able to raise substantial new money.”
Investors in the fund include Tom Perkins (founder of Kleiner Perkins), Charles Wang (founder and Chairman of Computer Associates), and corporate and institutional investors, including ABN AMRO, ING, Green Desert and Grove Street Advisors, a fund manager for CALPERS, the California state pension fund.
The fund will make investments of between $3 million and $5 million in companies that develop enterprise software or business-to-business wireless technology and is anticipating making investments at attractive price levels because of the drop in valuations. The firm believes a combination of reduced valuations for high quality teams and businesses, an increasingly integrated European economy, a continuing long-term trend to increasing IT communications spending by corporates, and a benign competitive environment make it a prime time to be investing in its target sectors.
The fund has already completed two transactions from the new fund including a EURO5.1 million investment in financial software company, Cambista Technologies and a $5 million investment in UK data services provider CreditTrade.