Acton Capital has closed its sixth venture capital (VC) fund, securing $240 million USD to back tech startups across Canada and Europe.
Fund VI marks the Munich, Germany-based growth-stage VC firm’s largest fund to date, and brings its total capital raised to $1 billion. Acton has invested in tech-enabled business models since 1999, funding a total of nearly 100 companies, including Etsy and Mambu.
Acton partner Hannes Blum described Canada as a “great cultural fit with [the] European mindset.”
To date, Acton has backed nine Canadian tech firms. Acton partner Hannes Blum, based in Vancouver, has led the firm’s investments in Canada for the past seven years. According to Blum, Acton intends to back 15 to 20 startups in total through Fund VI, including another two to four Canadian startups.
“We’re very proud of our track record in Canada and have worked with exceptional founders over the years,” Blum told BetaKit, citing Acton’s investments in startups like Toronto’s Chefs Plate, Burnaby, BC-based legaltech unicorn Clio, Toronto underwear brand Knix Wear, Toronto-based virtual care startup Maple, and Victoria e-commerce software firm Mobify.
Chefs Plate was acquired by fellow mealkit delivery firm HelloFresh in 2018 and Mobify was purchased by Salesforce in 2020, while Knix Wear sold a majority stake to Swedish hygiene products giant Essity for $410 million last year.
Acton targets companies with proven business models at early growth stages, backing three to four new companies per year. The VC firm focuses on enterprise software-as-a-service, consumer tech, marketplace, and e-commerce startups with initial Series A and Series B investments of between $5 million and $10 million.
For its part, Acton claims that its investment strategy is less “outlier-driven” than some other VC firms. According to Acton, it focuses less on hunting unicorns and more on identifying companies that are ready to scale and developing a growth strategy that suits them. “Be it the next trailblazing unicorn or a mid-sized but capital-efficient outcome—for us, beauty comes in more than one size,” Acton principal Julius Lühr noted in a blog post.
“We have always focused on growth that is driven by reason rather than short-term momentum,” Acton managing partner Dominik Alvermann said in a statement. “We are launching Acton VI in a market environment where this approach is more crucial than ever. In the current market cycle, the need to balance an attractive growth profile and solid financial fundamentals will be of paramount importance.”
Prior to joining Acton, Blum founded and scaled one of the firm’s first investments, JustBooks, which he merged with Victoria-based AbeBooks prior to an exit to Amazon. Acton began investing in Canada through its first fund with AbeBooks, and started doing so more frequently in 2009 with Indochino.
Acton intends to back another two to four Canadian startups through Fund VI.
Speaking to why Acton saw and continues to see opportunity in Canada, Blum described the country as a “great cultural fit with [the] European mindset,” noting that Canadian tech startups also have a large addressable market in North America.
According to Blum, Acton’s track record in Europe and Canada helped the firm close its latest fund amid a challenging economic climate for startups and VCs alike.
“It was definitely a difficult fundraising environment but our track record over a long period of time—including [the] 2000/2001 internet bust and 2008 financial crisis—ensures that we have a very solid base of continuous backers in our funds,” said Blum. “In the end, it is about reputation and results, especially in difficult environments.”
So far, Blum is Acton’s only Canadian employee. Asked whether the firm has any plans to grow its Canadian presence with Fund VI, Blum said, “we might expand the team down the road but the current setup works relatively well for now.”
Feature image courtesy Acton Capital.