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Notion Capital company logo
Venture Capital
notion.vc

Investments

177

Portfolio Exits

23

Funds

9

Partners & Customers

1

Service Providers

2

About Notion Capital

Notion Capital is a multi-stage investment fund focused on growth businesses in the Internet-based services sector. It invests in early to mid-stage companies with a focus on Internet based services with recurring revenue models. The company was founded in 2009 and is based in Marylebone, U.K.

Headquarters Location

91 Wimpole Street

Marylebone, England, W1G 0EF,

United Kingdom

+44 (0) 845 498 9393

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CB Insights Intelligence Analysts have mentioned Notion Capital in 1 CB Insights research brief, most recently on Dec 9, 2021.

Latest Notion Capital News

SaaS Is Growing Up: 4 Business Model Changes To Adopt with Notion Capital

Sep 19, 2023

Many of the fundamental business models that were once engraved in the SaaS playbook are now changing thanks to a tougher macro environment and a maturing market. In last week’s Workshop Wednesday , held every Weds at 10 a.m. PST, Stephanie Opdam, Partner at Notion Capital, shares four business model changes that will allow SaaS companies to build resilience and staying power over time. Some of the changes we’ve seen in the last year or two include: CAC reduction Quality of revenue A different environment means a different strategy, and Notion Capital lays out four business model changes that could be helpful based on what peers are doing. A Different Environment Means A Different Strategy The left chart shows big valuation increases, lots of LP money available, and an overall abundance of capital. Then, we saw a correction happen with fears of a recession and rising interest rates. Now, the lows appear to stabilize around the levels we saw in 2016. Many believe this is the bottom, and over time, things will go up. The right-hand graph shows that deal count and overall investments have fallen. The actual numbers might not be as bad as the graph shows, but companies that will need to go out and raise from external investors within the next 12 months will need to grow much faster to counter the effect of a multiple decline. The Valley of Death This Valley of Death graph shows quite a clear division in the market. On the one hand, you might be growing very fast, and you’re relatively efficient. Those people are sitting pretty on the right-hand side of the graph, and it’s a great place to be. It’s also acceptable to dial it back a bit and wait for better times. Those people are steering to the left-hand side. You’re in trouble if you’re sitting in the middle of the valley of death. This is where traditional SaaS methods like subscription pricing only, driving growth through headcount only, or a pure sales GTM strategy only live. You don’t want to be there. Those methods no longer work, and it’s time to adapt. Keep reading to learn what changes your SaaS company can adopt to stay relevant in today’s environment. Change #1: A Very Clear Uptick In Product-Led Growth Strategies If you look at Notion Capital’s Cloud challengers, 35% are working on a PLG growth strategy. PLG is about investing in product and data instead of sales and marketing. What does PLG bring to the table? It shows you optimized onboarding for customers A low entry point, whereas traditional sales-based strategies require hiring sales teams, sales collateral, and a longer ramp-up time PLG significantly reduces CAC Product and embedded payments drive customer acquisition If you spend more time on a PLG strategy, you could save a lot of costs. The broader data available shows that companies are 70% more likely to break even within two years of profitability and 2x more likely to reduce CAC costs. Change #2: Headcount Driven Growth Is No Longer Since the start of 2020, companies have focused on more than just revenue per head. They’re also paying attention to profitability per head. It’s hard to measure if you don’t have profitability, but the Cloud Challengers are growing their headcount in a range of 0-33%, which is astonishingly low for a tech startup. Digging further, companies optimize for any person they bring into the organization. Those people should be able to generate revenue in the next 6-12 months, whether commercial or product-facing. The likes of Microsoft, Salesforce, and Meta have all done major layoffs in the last year. Apple hasn’t done any. They don’t have the highest revenue per head, but they certainly have the highest profitability. Notion Capital came up with a benchmark for the days when you’re below $20M ARR. Strive for $150k of revenue per FTE. Your largest cost space is people, so align yourself with a number of FTEs that are directionally correct. Ask yourself, “Who am I hiring for the next position, and can they contribute to this number in a meaningful way after the ramp-up period?” Change #3: Use Pricing As A Key Commercial Lever “The SaaS subscription model has been treated as a sacred cow for a long time,” says Opdam. Assuming all renew and you sign new ones, it has a nice exponential effect, and it’s sticky. Then, usage-based pricing took off. 22% of Cloud Challengers are doing purely usage-based pricing models. An overview of data found that nearly 61% of companies used only usage-based pricing. That number is expected to jump to 81% in the next two years. Opdam doesn’t suggest switching to a pure usage-based pricing model because you might get too much fluctuation. The most successful portfolio companies have a SaaS+ model — a fixed subscription base and a revenue overlay based on usage. The takeaway: But don’t go to the other extreme. Find something valuable in the middle. Change #4: Not All Revenue Is Created Equal At Notion, they held a rule of thumb that companies shouldn’t spend more than 10% of revenue coming from professional services like implementation. Another huge cost of goods or sales is Cloud spend. 41% of total IT budgets for many companies is on Cloud costs. If you can optimize Cloud costs, and many have already optimized for professional services, you can get a 10% increase in your gross profit margin. The multiple you can get on your company is quite astonishing. Reducing Cloud spend is a quick and easy way to demand between a 14-20x multiple because you can show how efficient you are. How do you reduce Cloud spend? There are a couple of ways. Utilize a free spend view tool combined with the usage of reserved instances rather than paying bulk. Enter with brokers in a pay-as-you-go agreement or under-utilization insurance that can guarantee you get a cash payback if you under-utilize your instances. Key Takeaways SaaS is growing up. If you can make these adaptations and optimizations, you not only create more longevity because you optimize the biggest part of your cost, but you also drive a little more revenue around things like pricing. If you can make small variations and optimize for that, the heaviest users will pay more, and new customers can enter at a lower level.

Notion Capital Investments

177 Investments

Notion Capital has made 177 investments. Their latest investment was in Tradeshift as part of their Series H on August 8, 2023.

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Notion Capital Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

8/1/2023

Series H

Tradeshift

$70M

No

2

7/27/2023

Pre-Seed

Axoflow

$2.5M

Yes

1

7/24/2023

Seed VC - III

Quench

$5M

Yes

Ada Ventures, Antler, B&Y Venture Partners, Firstminute Capital, IFG, Northzone, Notion Capital, Plug and Play Ventures, Tuesday Capital, Undisclosed Angel Investors, Undisclosed Investors, Undisclosed Venture Investors, and Ventures Together

1

7/11/2023

Seed VC

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$99M

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10

6/30/2023

Seed VC - III

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$99M

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10

Date

8/1/2023

7/27/2023

7/24/2023

7/11/2023

6/30/2023

Round

Series H

Pre-Seed

Seed VC - III

Seed VC

Seed VC - III

Company

Tradeshift

Axoflow

Quench

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Amount

$70M

$2.5M

$5M

$99M

$99M

New?

No

Yes

Yes

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Co-Investors

Ada Ventures, Antler, B&Y Venture Partners, Firstminute Capital, IFG, Northzone, Notion Capital, Plug and Play Ventures, Tuesday Capital, Undisclosed Angel Investors, Undisclosed Investors, Undisclosed Venture Investors, and Ventures Together

Sources

2

1

1

10

10

Notion Capital Portfolio Exits

23 Portfolio Exits

Notion Capital has 23 portfolio exits. Their latest portfolio exit was Vizolution on June 13, 2023.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

6/13/2023

Acquired

$99M

1

4/20/2023

Acquired

$99M

3

1/5/2023

Acq - Fin

$99M

1

8/2/2022

Acquired

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$99M

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10

6/20/2022

Merger

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$99M

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10

Date

6/13/2023

4/20/2023

1/5/2023

8/2/2022

6/20/2022

Exit

Acquired

Acquired

Acq - Fin

Acquired

Merger

Companies

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Valuation

$99M

$99M

$99M

$99M

$99M

Acquirer

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Sources

1

3

1

10

10

Notion Capital Fund History

9 Fund Histories

Notion Capital has 9 funds, including Notion Capital Fund V.

Closing Date

Fund

Fund Type

Status

Amount

Sources

7/6/2023

Notion Capital Fund V

$327M

3

8/31/2019

Notion Capital Fund IV LP

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$99M

10

5/16/2017

Notion Capital Opportunities

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$99M

10

5/16/2017

Notion Capital III

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$99M

10

5/7/2012

Notion Capital II

$99M

10

Closing Date

7/6/2023

8/31/2019

5/16/2017

5/16/2017

5/7/2012

Fund

Notion Capital Fund V

Notion Capital Fund IV LP

Notion Capital Opportunities

Notion Capital III

Notion Capital II

Fund Type

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Status

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Amount

$327M

$99M

$99M

$99M

$99M

Sources

3

10

10

10

10

Notion Capital Partners & Customers

1 Partners and customers

Notion Capital has 1 strategic partners and customers. Notion Capital recently partnered with Madrona Venture Group, and Microsoft on October 10, 2017.

Date

Type

Business Partner

Country

News Snippet

Sources

10/10/2017

Partner

United States

Microsoft Ventures announces Innovate.AI, a global search for startups shaping the future of AI

`` Through this partnership with Microsoft , we are excited to meet entrepreneurs who are harnessing AI to redefine entire industries on a massive scale . ''

2

Date

10/10/2017

Type

Partner

Business Partner

Country

United States

News Snippet

Microsoft Ventures announces Innovate.AI, a global search for startups shaping the future of AI

`` Through this partnership with Microsoft , we are excited to meet entrepreneurs who are harnessing AI to redefine entire industries on a massive scale . ''

Sources

2

Notion Capital Service Providers

2 Service Providers

Notion Capital has 2 service provider relationships

Service Provider

Associated Rounds

Provider Type

Service Type

Counsel

General Counsel

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Service Provider

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Associated Rounds

Provider Type

Counsel

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Service Type

General Counsel

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Partnership data by VentureSource

Notion Capital Team

4 Team Members

Notion Capital has 4 team members, including current Founder, Managing Partner, Stephen Chandler.

Name

Work History

Title

Status

Stephen Chandler

Founder, Managing Partner

Current

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Name

Stephen Chandler

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Work History

Title

Founder, Managing Partner

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Status

Current

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