London's Silicon Roundabout
London's so-called Silicon Roundabout © Bloomberg

Notion Capital, the London-based venture capital firm, has raised a $120m fund in the latest sign of investors continuing enthusiasm for Europe’s technology start-up scene.

The group already has $250m under management and focuses its investments on the continent. It hopes to increase the fund to $150m in the coming weeks.

The development is the latest sign that investors in Europe are trying to follow the lead of Silicon Valley’s venture capitalists.

According to figures from Dow Jones VentureSource, an investment database, funding for the continent’s digital groups almost doubled from $4bn a year in 2010 to $7.75bn in 2014. In the first three months of 2015, companies in the sector raised just over $2.5bn.

Earlier this month, Cisco, the US technology group, said it would spend $1bn in the UK through a series of corporate acquisitions and venture capital investments in the next five years.

However, this funding pales in comparison with the cash available for technology companies in the US. According to the US National Venture Capital Association, American VC funds had $156.5bn under management in 2014.

Notion was launched in 2009 by Stephen Chandler and Jos White. The pair were the founders of online email security company, MessageLabs, which was sold to $700m to Symantec in 2008.

Mr Chandler said that its latest fund “came together more quickly” than previous fundraising efforts, due the growing interest in the European technology sector.

Unlike other venture groups, which often invest in a diverse range of digital groups, Notion focuses on early stage “enterprise software” companies that are focused on providing online services for other businesses.

“This presents real opportunities for disruption and we want to identify those companies that will lead the transition away from traditional software towards the cloud,” said Mr White.

Notion-backed UK start-ups include NewVoiceMedia, a Basingstoke-based group that provides online customer services which has raised more than $100m from Silicon Valley investors such as Bessemer Venture Partners and Technology Crossover Ventures.

It was also an early investor in London-based groups such as Duedil, a business research database, and Currency Cloud, an online payments group.

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