£62.9 million has been raised by Notion Capital to invest in high growth European cloud and SaaS SMEs, £40m of this is to be injected directly into UK SMEs.

High growth companies are due to receive £2m each from the government backed fund, called 'Notion Capital Fund Two'. The scheme makes up part of the Department for Business, Innovation and Skills' Enterprise Capital Funds programme, combining public, private and government funds and expertise to address weaknesses in the market.

It is hoped that with further fundraising the investment firm fund could reach nearly £100 million.

Jos White, co-founder of Notion Capital said:"We believe that there is now an under-supply of good quality funds serving an ever-increasing and ever-widening market opportunity within Europe. This imbalance will lead to a larger market share for the investors and also stronger and more experienced partners for the entrepreneurs. The results could mean a step change in the performance of European VCs that will in turn lead to further growth and investment in the market."