Europe is often criticized by tech industry analysts for having a limited supply of growth capital funds compared to the United States. However, it is important to note that growth capital is not entirely absent in Europe. A notable example is the growth equity investor Kennet, which recently announced the raising of €266 million for its largest fund to date, Kennet VI. This fund is being used to invest in B2B SaaS companies across Europe.
Kennet specializes in backing established B2B SaaS startups that are founder-owned and either highly capital efficient or fully bootstrapped. One such example is the conference networking app Grip, which raised $13 million in 2021, with Kennet leading the round.
The Kennet VI fund is the sixth fund that Kennet has run over the last 25 years. Its most recent exit was with Eloomi in January 2024, which was acquired by floated software company Ceridian, generating a 3.1x cash multiple. Previous exits include Nuxeo (a 5x exit), Dext (3.8x), CrossBorder Solutions (6.4x), Rimilia (2.5x), and Impartner (2.6x).
Investment from Kennet is typically the first external funding that companies receive and is used to scale and expand internationally, build world-class management teams, and amass strategic value. Hillel Zidel, managing director of Kennet Partners, stated that the new fund will continue to focus on B2B software companies that are bootstrapped and capital efficient at the growth stage.
The Kennet VI fund was raised in partnership with cornerstone investor Edmond de Rothschild Private Equity, which started investing in the fund in 2017. Bpifrance, British Patient Capital, and Federated Hermes Private Equity also committed to the fund.
There has been a growing trend of growth funds in Europe. Earlier this year, Index Ventures announced $2.3 billion in new funds, with $800 million dedicated to venture investment and $1.5 billion set aside for growth- and late-stage companies. The growth capital sector, while often quieter than traditional venture capital, can frequently yield great returns for entrepreneurs who prefer to retain a lot of ownership and control but are also willing to bootstrap over a longer period to reach revenues and profits.
