Frog beats Brexit uncertainty by raising European Software Scale-Up fund

4th November 2019 by Mike Reid, Senior Partner

Amongst all the Brexit insecurity, there is some sign of progress. We are delighted to confirm the First Close of our second Software Scale-Up fund, which we are targeting to exceed €150m at Final Close.

We focus 100% on investing capital and expertise in European, Software enabled Scale-Ups with an average of €5m of revenues. Our operational support and unique Scale-Up Methodology are themes of growing industry importance. We pose the challenge, ‘How do you ensure all the start-ups you back convert into successful businesses?’.

We were delighted to be awarded Unquote’s recent VC & Growth Equity House of the Year, and be shortlisted for Exit of the Year by Investor Allstars.

Our growing list of companies are gaining promising momentum.

  • Modulr, the B2B payment platform for digital businesses, was recently awarded £10m as part of the hotly contested RBS Alternative Remedies capital allocations
  • McMakler has become the stand-out German PropTech scale-up, having just raised €50m in Series C and already the 4th largest real estate agency in the region
  • Azimo, one of Europe’s leading digital money transfer platforms, was recently named in the FinTech 50

Founded by experienced investors from Apax, 3i, LivingBridge and Creandum (the fund that was the first fund to invest in Spotify), we focus on two key software themes:

  1. Smart Data – businesses delivering competitive insights
  2. Digital Infrastructure – companies offering disruptive efficiency

Scaling a company from 50 to over 500 people is very intense. CEOs are increasingly looking to partner with specialist investors like Frog who have been through this phase before and can help avoid the pitfalls experienced by others.

Frog’s Scale-Up Methodology is a framework of tried and tested best practice across day-to-day execution, forward planning, and long-term business resilience. They use this throughout the investment cycle, from deal selection to activated value-add by their in-house operating partners and network.

Brexit has had some impact though. The European Investment Fund, which invested in our first fund, has yet to commit due to the lack of Brexit clarity. The EIF investment team seem keen, but the powers that be seem to have halted discussion with all UK based funds right now.

The British Business Bank, however, is providing additional funding for high growth businesses as the UK leaves the EU, to fill any gap left by the EIF, and recently published compelling research on UK based funds. Their subsidiary, British Patient Capital (BPC), recently published their annual report highlighting the Scale-Up opportunity that exists, and this follows record inflows of capital and number of companies starting up in the UK and Europe, which Frog is well positioned to exploit.

Mike Reid

Article by Mike Reid, Senior Partner

Mike launched Frog in 2009, after seven years in industry and 12 years at 3i. As Managing Partner, he represents Frog on the boards of Rated People, and Dynamic Action.