Octopus has raised GBP83 million from investors, including BP Investment Management, for its Zenith III fund.
The Fund, which is managed by Octopus Ventures, focuses on providing high growth European technology businesses with the capital and expertise they need to fuel their next phase of growth.
Octopus is one of Europe’s largest technology investors, with 20 investment professionals managing over GBP1 billion in assets. Across its funds, Octopus’ Ventures team has invested into over 100 companies over the last decade.
Zenith III follows on from the success of both Zenith I and Zenith II which provide institutions with investment opportunities in a range of European growth businesses. Companies include Zoopla Property Group, Secret Escapes and Graze.
Octopus’ Zenith funds offer institutions long-term investment opportunities in growth companies at a point where venture risk has yielded to more predictable execution risk. Institutions are attracted by the opportunity to support entrepreneurship while minimising risk by investing in established businesses, with clear growth potential.
Alliott Cole, CEO at Octopus Ventures, says: “Institutional investors are increasingly looking to access returns from the fastest growing tech companies. Europe has become one of the most attractive locations for tech start-ups. This presents an attractive opportunity for institutional investors looking to support growing companies with momentum behind them.”
“Octopus takes a seat on the board of each of our portfolio companies. This allows us to support the company’s growth whilst giving institutions some reassurance over the life time of the investment.”
Chris Hulatt, Co-Founder of Octopus Group, says: “The European growth sector is thriving but there is a clear funding gap at the growth stage for European start-ups in comparison with the US, where more than five times funding is available. This is a missed opportunity. We should and could do more to support entrepreneurs in Europe. Institutional capital holds the key to unlocking growth potential.”
Alongside its Zenith funds, Octopus runs an evergreen Venture Fund, through which it supports companies typically from seed to series B stage. Octopus has the ability to continue to participate in later stage funding rounds for these companies through its Zenith funds, with investment decisions informed by an existing relationship with the companies, often lasting over a number of years. Zenith III will focus primarily on continuing to support the best performing companies from the existing Venture fund.
Octopus Group currently manages over GBP1.7 billion of institutional funds.
Bluetower Associates LLP advised Octopus on the fund launch.
Tim Griggs, Managing Partner at Bluetower Associates, says: “Since structuring and placing the first Zenith fund in 2013, we have worked closely with the Octopus team to realise their goal of giving institutions access to some of Europe’s most exciting and fast-growing technology companies as they enter the growth phase of their development.”
