ESG policy
Dawn Capital is Europe’s largest specialist B2B software investor, with total commitments of $2.0bn.
Through a fund model premised on early-stage flagship funds following through with later-stage opportunity funds, Dawn backs startups predominantly from Series A and B, and continues to selectively fund its best-performing companies through growth rounds to exit. At the outset, Dawn seeks to partner with founders building the next generation of global software leaders, supporting them to harness extraordinary teams, exceptional technology and scalable business models to create category-defining companies that will become critical components of the software stack of modern enterprise.
To date, Dawn has invested in over 70 companies founded out of 15 countries and has played a pivotal role in the outcomes of some of the continent’s biggest B2B successes, includes Mimecast (formerly NASDAQ-listed, taken private by Permira in a $5.8bn transaction), iZettle (sold to PayPal for $2.2bn cash), Tink (purchased by Visa for $2.0bn), LeanIX (acquired by SAP). Dawn has consistently delivered industry-leading returns for its investors, with Dawn acknowledged as Europe's top-performing venture capital fund manager by Preqin in 2023, and all the firm’s funds continually ranking in the top quartile for venture capital performance globally.
Dawn uses a tried-and-tested due diligence approach throughout its investment process, applying its unique data-driven methodology to make initial investments, as well as to continually analyse portfolio companies on a quarterly basis. Throughout the investment period, Dawn provides active, hands-on support to drive the growth and performance of its portfolio companies, with a focus on building long-term, sustainable enterprises which will continue to thrive beyond Dawn’s ownership.
Dawn recognises the importance of responsible investing, which can lower risk and bolster financial returns, and has embedded this throughout its investment process. This approach benefits not only Dawn’s portfolio companies and investors, but all the employees, suppliers, local communities, and the wider society in which Dawn and its portfolio companies operate. The three main areas of Dawn’s focus on responsible investing are embodied within its ESG (Environmental, Social and Corporate Governance) framework. Dawn became a signatory to the internationally-recognised Principles of Responsible Investing (PRI) in July 2023.
Environmental
At Dawn, we understand our place in society and in the wider world. We all have a responsibility to care for our environment and to look after the planet for future generations. This means being aware of key factors contributing to climate change; the careful use of finite resources; and committing to an energy-efficient consumption policy. Wherever possible, we seek to make decisions to reduce our carbon footprints and resource consumption. Dawn measures its carbon footprint annually and during 2024 is working on its net zero strategy and targets.
Social
Inclusion, diversity, and equality are important considerations for Dawn. At Dawn, we strive to ensure we foster an environment where our employees enjoy coming into work and are able to thrive in their chosen professional fields. We also encourage and promote gender equality and are true advocates for hiring individuals from diverse backgrounds. Our recruitment programme is tailored to ensure that we have a diverse and well-balanced workforce. Other social initiatives include health and safety and wellbeing, and we expect the same commitments from all our portfolio companies.
Corporate governance
When we consider making investments, we look for certain key ingredients, one of which is the integrity of the management team. We will be in partnership with the founding team for a significant period of time, so we want to ensure that they not only have the strategic vision to take the company forward, but also that they have integrity and share the same core values as Dawn. We place great care and attention during our investment due diligence on appraising the corporate governance, team and structure of each B2B company we invest in.
Investment cycle
Dawn invests from an early-stage in B2B software companies, which generally have a lower environmental impact than other industries and a lower risk of health and safety issues. As a signatory to the PRI, Dawn considers ESG factors in making investments. During our due diligence process, we appraise each prospective investment company’s board and team composition, governance structure and overall ESG factors, and once invested, we work collaboratively with the management team to continue to improve and focus on ESG. We would not invest in a company if we felt it was behaving unethically.
We always take a board or observer seat, with our team attending every board meeting. During these board meetings, we continue to ascertain if there are any material risks – ESG or otherwise for us to follow-up on and monitor. These risks and factors would be raised at both Dawn’s quarterly offsite and weekly IC meetings, to agree follow-up commitments and board actions. All actions are then tracked and the progress discussed during our weekly IC meetings.
As we invest in early-stage companies, most typically at Series A and B, we aim to not overload our companies with unnecessary reporting. We have regular board meetings and so it is during these that we can ascertain on an ongoing basis if there are any material ESG issues. We do intend to more formally monitor ESG considerations through our investment cycle. As part of our ESG Roadmap we are appraising how we can more formally capture, track and report to our investors the progress of each of our portfolio’s ESG matters, while supporting our companies.
We also ensure that Dawn employees have a good understanding of ESG issues and that they understand the importance of factoring in ESG considerations during the due diligence process. We conduct ESG training with our team and are active members of industry bodies such as VentureESG and ESG_VC who support ESG among the venture capital industry. To date, and to the best of our knowledge, we have not had a portfolio company that has faced a major ESG incident or an ESG related litigation case.
The Dawn Foundation
As well as ensuring our portfolio companies are mindful of ESG matters, through the Dawn Foundation we continue to embark on a wider programme of giving to support those in need. Dawn also actively supports its employees in volunteering initiatives through a flexible voluntary program. Dawn’s team are encouraged to contribute their time and skills to a charity, organisation or community group of their choice for a total number of three days per annum.
Future plans
It is Dawn’s intention to continually enhance its ESG programme and support for our portfolio companies. We see this as part of our ongoing ESG commitment and roadmap, which will see us continuing to bolster our current ESG policies and practices.
January 2024
