Major cloud-based European venture capital fund opens

April 20, 2012

A $100 million venture capital fund for European cloud and Software-as-a-Service (SaaS) providers recently opened.

The fund was created by Notion Capital, a venture capital firm based out of both London and New York. It was created by Jos and Ben White, the creators of the messaging security company MessageLabs.

The purpose of the fund is to invest in up-and-coming startups in the cloud computing and SaaS industries. According to The Wall Street Journal, the majority of the investments will be between $1.5 million and $3 million and will focus on Europe, Israel and potentially South Africa, with an estimated 80 percent of all funds going to European companies.

European opportunities

The Wall Street Journal reports that Jos White believes Europe to be a particularly fertile area for cloud- and SaaS-based venture capital projects. "There isn't anyone else with the 'laser' focus in that area that we have," he said.

Reuters U.K. further reports that White largely attributes the fund's success in attracting investors to a lack of available venture capital funds in Europe, allowing Notion Capital to be selective in its investments.

White indicated that he does not expect the fund to have any trouble reaching its maximum of $150 million in initial investment.

Governments contributing

In addition to venture capitalists and Notion partners, who are contributing 10 percent of the funding themselves, significant investments have come from European governments.

The U.K. government in particular has put forth significant investments in Notion Capital. It created an enterprise capital fund for this purpose and has dedicated £40 million into the project.

According to ComputerWorldUK, enterprise and business Minister Mark Prisk explained, "It is absolutely vital that ambitious small firms can access the finance they need to expand and grow."

This move continues the U.K. government's efforts toward supporting the cloud. In a few weeks, the government will launch its own cloud initiative, G-Cloud, aimed at providing cloud services to organizations throughout the country.

A growing industry

A recent study from Microsoft suggests that the Whites may be correct to believe that there is room for growth in the cloud computing industry. The study predicts that public and private cloud services will create more than 13 million new jobs around the globe by 2015. Furthermore, it believes cloud-led innovation may produce as much as $1.1 trillion in annual revenues for businesses.

However, as the cloud industry grows, there are concerns. Due to the nature of the cloud, in which data is stored and distributed on third-party servers and accessed from many geographic points, security is paramount. Industry experts caution any organization moving to the cloud to exercise caution and perform thorough security audits to ensure safe transition.

-McAfee Cloud Security