Venture capital firm Northzone raises 1 bln euros

STOCKHOLM, Sept 13 (Reuters) – Nordic venture capital firm Northzone said on Tuesday it had raised more than 1 billion euros, one of the largest such funding rounds in Europe this year.

The firm, which has funded companies such as Spotify, Klarna and Personio, plans to use money from its 10th fundraising to back startups from seed stage through to initial public offering.

After a blockbuster 2021, venture capital funding has slowed this year due to a fall in the valuation of public companies, higher interest rates and the uncertain geopolitical backdrop.

“The exuberance of the COVID years is gone,” Northzone partner Jeppe Zink said in an interview.

“In any graph you will see this anomaly that’s called 2021. If you just wipe that from your memory and look at valuations and deals from 2018 or 2019 as a growth curve, you will see that it continues,” he said.

The value of European VC deals totalled 38.9 billion euros in 2019, 105.6 billion euros in 2021 and 54.4 billion euros in the first half of 2022, according to data from investor website PitchBook.

However, the total deal value fell 10.6% in the second quarter of this year compared with the first three months.

While some startups have delayed raising funds, others have turned to the private market, although at lower valuations – Klarna, for example, saw its valuation drop to $6.7 billion from $46 billion despite raising $800 million in another of this year’s large funding rounds.

“Most of our portfolio companies are well capitalised for two to three years, said Jessica Schultz, a Northzone partner. “So they are in a position where they can raise when they want to, not when they have to.”

Reporting by Supantha Mukherjee in Stockholm; Editing by Kirsten Donovan

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