Kennet Partners—a London-based growth stage firm that invests in U.S. and European tech companies from a single fund—recently closed its third fund with $315 million. The firm raised about $200 million for its previous fund in 2000.
Managing Director Javier Rojas, who has led Kennet’s U.S. investment activities from Foster City, Calif., since 2000, says the deployment of the previous fund was slowed because of the bursting of the Internet bubble. But Rojas, who focuses on software-as-a-service and Internet-related companies, is more bullish about fund III.
Rojas says he is seeing more growth stage companies from both continents eyeing expansion across the Atlantic.
“The Euro is strong now, which is a lure for U.S. companies,” Rojas says. “Conversely, European companies continue to look at coming into the U.S. market.”
For example, NTRglobal in June raised a $34 million growth stage funding round from Kennet, Atlas Venture and other investors. Barcelona-based NTRglobal, which develops Internet-related communications technology, is eyeing expansion in the U.S. market.
Similarly, Kennet portfolio company Kapow, which develops Internet search software and technology, earlier this year raised $12 million from Kennet and others. The company—with offices throughout Europe and the United States—has based its headquarters in Palo Alto, Calif. A decade ago, it was a European-based startup.
Interest in exploring new markets flows in the other direction, too. U.S.-based Kennet-backed companies that have expanded to Europe include Daptiv, Medefinance and NetPro.
The investment in NTRglobal was from Kennet III, which held a first close in June 2007. Rojas says the firm focused on a few exits before it resumed the fund-raising push. One exit came from portfolio company Adviva Inc., a London-based provider of network online advertising to publishers and advertisers, which was bought in March by Specific Media Inc. for an undisclosed price. Adviva had raised about $8 million from Kennet in 2005.
Other recent exits for Kennet include the acquisition of Chipidea by MIPS Technologies Inc. in August 2007 for $147 million and the purchase of Fluency Voice Technology Ltd. by Syntellect Ltd. in June for an undisclosed price.
The Euro is strong now, which is a lure for U.S. ompanies. Conversely, European companies continue to look at coming into the U.S. market.
Limited partners in fund III include Access Capital Partners, Adveq, Alpha Associates, BNP Paribas Private Equity, Capital Dynamics, Credit Agricole Asset Management Capital Investors, Credit Suisse, European Investment Fund, Finama, LGT Capital Partners and Siemens.
Kennet typically makes investments of $10 million to $25 million per company and is usually the first institutional investor. —Alastair GoldfisherDEALWATCH: Five recent investments by Kennet Partners
Company_DescriptionClearswift Corp._E-mail content security software
Daptiv Inc._On-demand project management solutions
IntelePeer Inc._Services to connect voice service providers
Kapow Technologies Inc._Internet search software and technology
Net Transmit & Receive_Internet communications technology
Source: Thomson Reuters