Claret Capital closes €575M Fund IV for European growth debt

Claret Capital Partners has closed its fourth European growth debt fund at €575M, well past the €500M it set out to raise. The London firm announced the final close today, splitting the total into €440m of Fund IV commitments and €135m of affiliated discretionary mandates.

The money lends rather than buys, as growth debt gives companies capital without the ownership cost of an equity round, which is a proposition that gets more attractive the harder equity becomes to raise on acceptable terms.

Around 32% of the fund has gone out across 27 companies, among them the B2B buy-now-pay-later platform Billie, the commercial property software firm PRODA, the sales-intelligence company Surfe, and the clinical-stage drug developers Cinclus Pharma and Inventiva.

Claret describes itself as Europe’s largest independent growth debt fund manager, and the qualifier is doing real work. Kreos Capital raised a larger fund at €1.25bn, but BlackRock bought Kreos in 2023, so the biggest balance sheet in European venture lending now sits inside the world’s largest asset manager.

That consolidation is the backdrop to this raise. An independent lender at €575m is a different participant from a business line inside a firm managing trillions.

The investor base has broadened in a way worth noting. Alongside pension plans, insurers and family offices, Fund IV took money from private wealth investors through an ELTIF, the EU structure designed to let non-institutional money into long-dated private assets.

European growth lending has rarely been available to that group. An ELTIF wrapper turns a strategy previously reserved for institutions into something a wealth manager can allocate to, which is one of the few concrete results of the EU’s efforts to widen the capital pool.

Fund III gives the track record this raise was sold on. It closed at €297m in 2022 and has since produced a run of exits, with Cytora going to Applied Systems, Endomag to Hologic, Logpoint to Summa Equity, Lyst to ZOZO and Tiqets to Expedia, alongside Abivax listing on Nasdaq.

Set against equity fundraising, it is a modest sum. Accel raised $3.5bn with a European allocation, though a debt fund buys nothing from the founders it lends to.

Claret has been lending since 2013. It has put more than €1.5bn to work across over 210 companies, a figure that reflects capital recycled through successive vintages rather than the total ever raised, which stands at €1.3bn.

David Bateman set the raise against the wider market. The managing partner said the amount “not only validates our approach and track record but is also a massive vote of confidence for the European technology, life sciences and impact ecosystems”.

Johan Kampe pointed to what is driving demand.

“As equity markets remain more selective and founders look for ways to grow without unnecessary dilution, we expect demand for flexible, non-dilutive capital to keep accelerating,” the managing partner said.

The gap he is describing is one Europe has been trying to close with public money. The EU launched a €3.75bn fund of funds to help startups scale, and a €80bn public bet on venture and scaleups has run into structural limits that a private lender does not face in the same way.

Life sciences is a larger part of the strategy this time. Two of the five named portfolio companies are clinical-stage drug developers, a sector where the long gap between funding and revenue makes dilution particularly expensive for founders.

Deep tech has the same shape of problem, and traditional venture capital struggles with long development timelines. Lending against revenue rather than buying equity against a distant exit is one of the answers being tried.

The firm is adding people on the continent rather than only in London. Claret has team members in Paris now and plans to place staff in Berlin, which puts lending decisions closer to the two markets producing the most European growth-stage companies after the UK.

Several things remain undisclosed. Fund terms, target returns, typical ticket size, and the identity of the partners behind the €135m of discretionary mandates are all absent from what has been published.