The Executive Magazine speaks exclusively with Stephen Chandler, co-founder and Managing Partner of Notion Capital, about the opportunities shaping European technology investment. He traces the firm’s beginnings to his experience building MessageLabs and explains why its early software focus expanded into fintech and AI.
In this interview, Chandler discusses the growth of portfolio companies including GoCardless, Paddle and Griffin, the support founders need beyond capital, and the role of trust and security in financial services. He also reflects on how his approach to investing has changed since his years as an operator.
Notion Capital has built a clear focus around software and fintech businesses. What first led you to co-found the firm, and how has your view of the opportunity in this sector developed since its early years?
“We established the firm in 2009 after our sale of MessageLabs to Symantec in 2008, becoming investors, after years as operators. We could see the potential for a real renaissance in European technology, and felt we had an unfair advantage having built one of the largest companies, and achieving one of the largest outcomes, in the emerging SaaS space.
“The shift to the cloud meant you no longer needed to be in Silicon Valley to build a great software business, as you could develop, deploy, sell and support from anywhere to anywhere. Europe, with its technical and entrepreneurial heritage, seemed poised to benefit.
“Our vision was to build the kind of firm we wish we had had backing us on our entrepreneurial journey at MessageLabs, combining founder empathy with the ability to genuinely help with the complex challenges we faced along the way.
“Our initial focus was SaaS, but we quickly added Fintech and then, in the AI era, extended into ‘Services-as-Software’ (AI displacing human workflows) and what we call ‘Software in the real world’ where you get integrated technology stacks across hardware, software and AI, including such areas as drones, precision engineering and robotics.
“These additions have massively increased the diversity and scale of the opportunity set we go after to a market of many trillions of dollars.”
As co-founder and managing partner, how do you balance the responsibilities of supporting portfolio companies, identifying new opportunities and shaping the firm's long-term direction?
“My role has evolved over time. When we founded the firm, I was an out-and-out investor; a ‘hunter’, if you like, as we built out our early portfolio.
“But the complexity of the firm has grown with our success and expansion across multiple dimensions: team, market coverage, AUM and the development of different investment strategies.
“This inevitably takes up a fair bit of my time these days, but I make sure I leave time to support my portfolio companies and meet with new founders and opportunities, the real lifeblood of any VC.”
You were the lead investor in GoCardless, which was recently acquired by Mollie. What did the company identify early about the future of account-to-account payments, and what can other fintech founders learn from its growth journey?
“GoCardless was early to spot the significant opportunity in account-to-account payments. Beforehand, the payments landscape was primarily focused on cards, and yet account-to-account has many cost and structural advantages, especially due to the subscription economy, which was emerging at the time.
“There were, however, real barriers to adoption particularly for smaller businesses. GoCardless democratised the whole space and, as a result, won big.
“The combination with Mollie means a much broader geographic reach, and product portfolio that creates a European payments powerhouse. We remain shareholders in the merged entity, and expect it to do very well.”
Notion Capital has also invested in companies including Paddle and Griffin. What qualities do you look for when assessing whether a fintech business has the potential to become an important part of the financial services infrastructure?
“It varies by stage. At the earliest stages, it’s all about the founder, or founders, and the market opportunity.
“Is this a big enough market opportunity to create a multi-billion dollar outcome? And if so, is this the right team to go after it, with the requisite insight, skills, ambition and resilience to see it through?
“Once they have a product-at-market, you have more data to analyse and extrapolate. Fintech generally has a regulatory and trust lens to consider too. You build pattern recognition on all these ingredients over time.
“Paddle and Griffin were both early founder and market bets when we first invested. Paddle now enjoys a tremendous position as the commercial front end of choice for thousands of leading software and AI businesses, handling all the complexities of billing, payment, tax and compliance so their customers can focus on building great products.
“Griffin is a fully licensed bank but with a modern tech stack built in the post-AI age: API first, easily integrated and fully scalable. With the trend towards embedded finance in so many products, this is a huge opportunity.”
Fintech has moved from a specialist sector into a central part of how businesses and consumers manage money. Which developments do you believe will have the greatest influence on the sector over the next five years?
“Financial services are embedded in so many products, and fintechs provide the glue for this. It’s a simply enormous opportunity, and one where you can still find value, especially when compared to the hype in areas like AI foundation models.
“Looking forward, the agentic commerce space will be huge. Fintechs have a critical role to play in providing safe and compliant settlement environments.
“We are also excited about stablecoins and other alternative payment methods. The disruption of the card-scheme monopolies has long been vaunted, but slow to materialise. It’s coming.”
Private capital can provide more than funding, particularly when a growing company is building its leadership team, entering new markets or refining its commercial model. How does Notion Capital work with founders beyond the investment itself?
“This was core to our proposition at Notion from the get go. There are two elements to it. Firstly, we are entrepreneurs and operators ourselves so bring not just experience, but also empathy to the table.
“We nonetheless recognised quickly that that wasn’t enough by itself. We needed to invest in ‘infrastructure’ to provide a consistent, scalable and genuinely differentiated support proposition to our founders and portfolio companies. This was the origins of the Notion Platform, which I genuinely believe is the best early-stage VC support platform in Europe, helping our companies in areas such as GTM, pricing, talent and product.
“Our NPS is off the charts.”
The current investment environment places greater emphasis on sustainable growth and sound business fundamentals. How can fintech leaders maintain ambition while building companies with lasting commercial strength?
“The post-COVID era was characterised by a welcome shift back to business fundamentals. Some of that has gone out the window in the AI era, though I think Fintech has fared better than many other sectors.”
Regulation, trust and security remain important considerations for companies handling financial data and transactions. How should founders approach these requirements while continuing to develop useful and accessible products?
“Yes, these are massive. There are many things that can put a business at risk over time, but these are the three that can do so overnight if you get them wrong.
“Regulation has been a large but necessary investment for ages but is an area where AI can help a lot.
“Security is a significant priority. The range of threats in a post-AI world is growing at an extraordinary pace and organisations must work continuously to keep up. A misstep in either area can erode trust, and can put a business at risk.
“We remain big believers in the opportunity in cyber, from our MessageLabs heritage through to recent success stories like Aikido and Resistant.ai.”
What opportunities do you see for the next generation of entrepreneurs building businesses across fintech, enterprise software and related areas, particularly in the United Kingdom and Europe?
“The key mega trends at the moment are AI re-platforming and sovereignty, so much of the opportunity set we play to leverage these trends. The financial infrastructure necessary to enable AI and agentic commerce is an exciting domain, price optimisation, compliance, settlement and alternative payment methods.
“Plus the whole sovereignty play, with new and shortened supply chains and full stack integrated propositions, which capture more of the value chain than pure software ever could.”
Looking back across your career as an investor and company builder, what principles have most influenced your approach to backing founders and helping them build businesses with long-term value?
“The shift from operator to investor comes with challenges, since as a founder your natural inclination is often to jump in and fix things but that doesn’t work as an investor. Our job as investors is to listen and help; occasionally to guide where we have relevant experience but never to dictate.
“At Notion, we have always taken a low ego approach to this and it has served us well I think. Like many VCs I am inherently curious so learning from founders, who are generally high intellect and passionate people, is always thrilling.
“I have always felt a real sense of privilege that I could do this job. And, I wholeheartedly believe that having Notion on your cap table will increase a company’s probability of success.
“We have always strived to help our founders and portfolio companies fulfil their potential, and relish the opportunity to continue to work with some of the greatest founders in the continent.”