European growth investor Jolt Capital has reopened its fourth fund – which initially closed on €271 million in 2021 – to investors and added an additional €100 million in commitments to provide “even greater support to the outperforming companies already in the portfolio”, the firm said.
The fund is two and a half years into a four-year investment period and has deployed around 40 percent of its capital. It plans to add a further six investments in the remaining 18 months of the investment period.
Of the €100 million in new capital, €60 million came from the fund’s existing investors, managing partner of Jolt Jean Schmitt, told New Private Markets. The remaining €40 million came from four new LPs, including a sovereign wealth fund and some family offices, he said.
It is an unusual move for a private equity fund to open up to new investors once it has begun deploying capital.
New investors bought into the existing assets at cost and will participate in the fund on an equal basis with the original investors. Fund LPs voted to reopen the fund around nine months ago, said Schmitt. The appeal for existing investors was that the fund would be able to participate more fully in follow-on funding rounds for top-performing portfolio companies, rather than relying heavily on outside investors, which dilute their holdings and hold back their returns, said Schmitt: “We have companies trading really well and can now support them on a longer run.”
Running the fund extension process was also “a way to test the water” for the next fundraise, said Schmitt. The speed of it “validated that we are pretty much alone” in backing European deep tech growth business, said Schmitt, who believes that institutional investors are now starting to recognise the importance of investing heavily into European tech companies. “[Investing in European deep tech] is critical for sovereignty. It is also critical, not just because of returns, but because we are seeding and nurturing an ecosystem in Europe.”
That validation has contributed to an ambitious target for Fund V, which the firm plans to start raising next year, of between €750 million and €1 billion.
“Today we don’t finance European growth companies properly in any sector,” Schmitt told New Private Markets. “Europe is a cheap shop for intellectual property. We want to turn it into a luxury shop.”
A recent investment example is Microoled, a French business designing and manufacturing microdisplays: tiny, low-voltage displays that are integrated into, for example, glasses. Jolt led a €21 million funding round in July this year alongside BPI France and two existing investors, Cipio Partners and Ventech.
Jolt is notable for using an artificial intelligence programme, Ninja, to source deal leads for its human partners. Ninja has now been gathering and processing data for eight years and is the source the firm’s entire dealflow.
Fund IV is an Article 9 fund under EU sustainable finance rules, meaning it has sustainability as an investment objective and commits to the highest level of reporting on its impact. It aims to avoid 500,000 tonnes of CO2 over the life of the fund “by the products, data or services sold” by its portfolio companies, according to its SFDR disclosure statement.
Jolt also plans to add a fifth office to its network in 2024 in Munich. It is already located in Paris, Lausanne, Copenhagen and Milan.