Northzone Venture have held a first close of their sixth fund, Northzone Ventures VI, and Argentum, alongside Argentum´s investment partners, are key investors. Northzone´s new fund has raised approximately EUR 90 million in its first close.

Argentum and the Nordic Private Equity Programme (NPEP), a programme consisting of Argentum´s investment partners, are the fund´s largest investors. The consortium of investors have contributed EUR 22 million, which is the equivalent to a 25 percent share of the fund. 

Facing the worst fundraising conditions in decades, amidst financial turmoil and the hang over that followed the private equity boom years of 2006 -2007; the Nordic venture capital market has been exceptionally slow.

Approximately EUR 1 billion was raised the Nordic market for early stage companies in 2007, whilst in 2008 this figure was a meager EUR 120 million.

Argentum and NPEP have been cornerstone investors in the few Nordic funds raised in 2009. These include the Norwegian based top-up funds by Viking Venture and Energy Ventures, as well as the secondary direct fund Verdane VII.

However, with Northzone Ventures VI closing at EUR 90 million, 2010 looks to be off to a promising start.

”After the financial crisis, there are a large number of financial institutions without further commitment capacity for venture and Private Equity.  Argentum, and Argentum’s partners, with their significant investment capacity, have  an important position in the Nordic PE market. We are honoured that Argentum for the third time invests in Northzone’s funds, and we appreciate our long term relationship”, states Tellef Thorleifsson, General Partner and Co-founder, Northzone Ventures.

"Northzone has successfully raised one of the very few venture funds to see the light of day, in the Nordic region and in Europe, last year. It has been a difficult market for technological venture funds, but we believe this fund is important as well as highly promising", says Joachim Høegh – Krohn, CEO of Argentum.

"The dry spell we have witnessed in the Nordic venture market has its roots in the international financial crisis. Argentum and the Nordic Private Equity Programme´s strategy has always been to invest through the business cycle and our experience is that funds established in periods with weak fundraising environments and little economic growth, often develop into the best vintages. Argentum has therefore invested significantly both on 2008 and 2009 and we will continue this course in 2010 as well", says Høegh-Krohn.

"Unlike the buyout markets, where we see diminishing returns as the market matures, the venture market is very much an experience-based business. We therefore expect to see similar trends as witness in the US, where there are increasing returns over time".

"For these reasons, we believe that the best Nordic funds will deliver competitive returns going forward and we are one of the few institutional investors which is in a position to take a share of these future returns", states Høegh-Krohn. 

The Nordic venture market

"Nordic venture funds have so far not delivered the returns investors are looking for, especially compared to the lucrative US market. The solution is more experience among the fund managers and greater maturity in the market".

A comparison between the mature US market, the adolescent European market and the relatively infant Nordic market backs this hypothesis. "We believe the US market is able to deliver superior returns as a result of strong deal flow and demand for venture investment, as well as a large number of individuals and teams with considerable experience, all of which is essential for the industry to deliver superior returns and results", continues Høegh-Krohn.

"Nordic Venture capital funds must build more experience and competence in order to be able to develop successful technology companies. Trial and error are crucial to developing these skills and the teams and individuals who go through this learning curve will be able to succeed over time. Northzone is an excellent example of a mature team and that is also one of the reasons why Argentum has continued to investment in the partnership".

For more information please contact

Maria Borch Helsengreen

Director of Business Development,

Tel: +47 957 42 213

 E-mail: mbh@argentum.no

Or:

Joachim Høegh-Krohn

CEO

Tel: +47 934 07 109

Email: jhk@argentum.no

About Argentum

Argentum is an investment company specializing in Nordic private equity funds. We are active in both the primary and secondary market and emphasize close co-operation with Nordic and international investors, as well as with Nordic private equity managers.

Argentum manages the Nordic Private Equity Programme, Argentum Investment Partners and Argentum Secondary on behalf of our partners, which include Gjensidige Forsikring, Varner Private Equity, ConocoPhillips Norge Pensjonkasse, Freyer Holding, Lærdal Finans, Tomte Forvaltning, Grieg International and Instutisjonen Fritt Ord.

Argentum is funded by the Norwegian Government.

Argentum currently has NOK 6.5 billion (approximately EUR 0.8 billion) under management, a staff of 16 and is located in Bergen, Oslo and Stockholm

About Northzone

Northzone was established in 1996 and has raised a total of EUR 445 million in six funds to date. The company has offices in Oslo, Stockholm and Copenhagen and has invested in more than 70 companies since its inception. In September 2009, Northzone was awarded the “European Venture Capital Fund of the Year” at the Investor Allstars Awards. Northzone is lead investor in high profile growth companies such as Nimsoft, Tobii, Funcom, and Innotech Solar. Previous successes include companies such as Lastminute, Pricerunner, NextGenTel and Trolltech.