Editor’s Note: Institutional capital is moving decisively into Europe’s digital economy, but the real story lies in the diligence burden that follows the money. This analysis connects two March 2026 fund launches to a wider shift in investor priorities around enterprise software, digital infrastructure, and operational resilience. It also surfaces the harder truth for cybersecurity, data privacy, regulatory compliance, and eDiscovery professionals: as investment in European technology accelerates, so does exposure to cyber risk, AI governance gaps, software supply chain vulnerabilities, and cross-border data conflicts. For investors and practitioners alike, the article frames due diligence not as a transactional checkpoint, but as a continuing discipline that directly shapes valuation, defensibility, and long-term return.
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Industry News – Investment Beat
Capital Flows Into Europe’s Digital Economy — And the Due Diligence Reckoning That Follows
ComplexDiscovery Staff
Two new investment vehicles launched within days of each other in March 2026 tell a story about where institutional money is headed in Europe — and what risks it carries through the door.
INVL Asset Management, the Baltic region’s largest alternative asset manager, opened a feeder fund on March 17 that channels capital into Main Capital Partners’ private equity strategy targeting B2B software companies across Northern and Western Europe. Five days earlier, Barcelona-based GVC Gaesco Alternative Investments secured regulatory approval for a €70 million fund aimed at infratech startups building the physical and digital backbone of the European economy. Together, these launches signal that investors are betting heavily on the digital infrastructure and enterprise software layers that underpin Europe’s economic future — a bet that brings with it a tangle of cybersecurity, data governance, and regulatory compliance questions that any serious investor ignores at their peril.
The INVL fund, formally known as the European Software Private Equity Access Fund, received authorization from the Bank of Lithuania and is designed to lower the barrier to entry into institutional-grade software investing. Where direct participation in a Main Capital Partners fund typically requires several million euros, the INVL feeder structure drops the minimum to EUR 125,000. According to Asta Jovašienė, Head of the INVL Family Office, the appeal lies in the structural characteristics of B2B software companies themselves. “Our newly created fund lowers the investment threshold, enabling entry with a minimum of EUR 125,000, while direct investments in funds of this calibre typically require several million euros,” she noted. The underlying thesis rests on businesses with long-term client contracts and recurring subscription revenues — the kind of predictable cash flows that private equity firms covet.
Main Capital Partners, headquartered in The Hague, has built a track record that supports the thesis. Founded in 2003 with an exclusive focus on enterprise software in Northwestern Europe, the firm now manages assets exceeding EUR 7 billion across nine alternative investment funds, with dedicated teams operating in five countries. It has executed over 300 transactions — roughly 100 initial investments and 200 follow-on capital injections for portfolio expansion. The sale of 38 portfolio companies for a combined EUR 2.1 billion has generated an aggregate realized return of 44 percent, according to the firm’s own reporting. Past investments in companies like WeFact, a Dutch pre-accounting and e-invoicing specialist, and Paragin, which builds digital assessment tools for education, illustrate the firm’s appetite for niche software businesses with defensible market positions in fragmented European markets.
On the infrastructure side, GVC Gaesco’s Resilient Infratech Ventures (RIF) fund addresses a financing gap that its managers believe traditional venture capital and infrastructure funds have left open. Many capital-intensive technology companies developing energy storage solutions, industrial automation systems, data center infrastructure, and network technologies don’t neatly fit into either category. The fund, authorized by Spain’s CNMV, will focus on startups across Spain, Italy, France, and Portugal — Southern European markets where digital infrastructure investment has historically lagged the continent’s north. Paco Illueca, General Manager of GVC Gaesco Alternative Investments, framed the opportunity in terms of a structural shift in investor appetite. “We see demand for alternative strategies linked to the real economy, technological innovation, and private markets,” he said.
What neither fund prospectus dwells on but every investor in these sectors must grapple with is the cybersecurity and data governance landscape that envelops European tech acquisitions. The challenge is not abstract. A February 2026 report from Kroll, which surveyed 325 private equity executives across eight markets, including the United States, United Kingdom, Ireland, Australia, Germany, Switzerland, Singapore, and Japan, found that 94 percent of firms had suffered financial impact from cybersecurity incidents, with average losses reaching $2.1 million per event. The probability of losing over $500,000 stood at 53 percent. Perhaps most telling, 26 percent of respondents reported reduced valuations or exit prices specifically attributable to cyber incidents — a direct hit to the returns that funds like INVL and RIF promise their investors.
The due diligence gap is pronounced. Kroll’s data showed that 81 percent of large firms — those with substantial assets under management — treat cybersecurity due diligence as a standard part of transaction review. At smaller firms, that figure plummets to 29 percent. For a feeder fund like INVL’s, which democratizes access to private equity for investors who may lack dedicated cybersecurity advisory teams, this gap carries particular weight. The B2B software companies in Main Capital Partners’ portfolio handle client data, manage recurring billing relationships, and often operate as embedded infrastructure within their customers’ businesses. A breach at any one of them reverberates through the client base and, by extension, through the fund’s valuation.
Europe’s regulatory environment amplifies the stakes. The Digital Operational Resilience Act, known as DORA, took effect on January 17, 2025, imposing harmonized ICT risk management requirements on virtually all EU financial entities — banks, insurers, investment firms, and crypto-asset service providers among them. The regulation mandates documented risk frameworks, incident reporting within hours, regular system testing, and continuous oversight of third-party ICT providers. Noncompliance penalties reach up to two percent of total annual worldwide turnover for institutions, or up to EUR 5 million for critical third-party technology providers. For infratech startups in the RIF portfolio that serve financial sector clients, DORA compliance is not optional — it is a condition of doing business.
The broader cybersecurity talent crisis in Europe adds another layer of complexity for investors evaluating these sectors. The European Union Agency for Cybersecurity, ENISA, reported in its 2025 NIS Investments study — based on a survey of 1,080 professionals across all 27 member states — that the EU faces a structural deficit of 299,000 cybersecurity professionals. Three-quarters of organizations reported difficulty attracting qualified personnel, while 71 percent struggled to retain existing staff. The consequence is a measurable pivot: rather than expanding security teams, organizations are reallocating budgets toward technology platforms and managed services. Information security’s share of EU IT budgets has grown notably since 2022, with ENISA’s data indicating it now represents approximately nine percent of total IT investments — a shift driven primarily by the compliance demands of NIS2, DORA, and the Cyber Resilience Act.
Artificial intelligence adds yet another variable to the due diligence equation. B2B software companies across Europe are rapidly embedding AI features into their products — from predictive analytics in invoicing platforms to automated assessment scoring in education technology. The EU AI Act, which began phased enforcement in February 2025 with prohibitions on unacceptable-risk AI practices, will see its broadest set of obligations — covering high-risk AI systems, transparency requirements, and national enforcement mechanisms — begin to apply on August 2, 2026, with certain provisions phasing in on staggered timelines beyond that date. Noncompliance fines reach up to EUR 35 million or seven percent of global turnover for prohibited practices. For investors evaluating software targets, this means AI governance maturity — including model documentation, training data provenance, and bias mitigation — has joined cybersecurity posture as an essential dimension of pre-acquisition assessment. A portfolio company that integrates AI without the governance infrastructure to demonstrate compliance faces regulatory exposure that directly erodes enterprise value.
The software supply chain presents a related but distinct risk vector. The B2B software companies that form the core of Main Capital Partners’ investment thesis are, by design, embedded in their clients’ technology stacks. That embeddedness creates value through switching costs and recurring revenue — but it also means a vulnerability in a portfolio company’s open-source dependencies or third-party libraries can cascade through its entire customer base. Up to 90 percent of modern applications rely on open-source components, according to research from the World Economic Forum, and incidents like the Log4j vulnerability in 2021 demonstrated how a single flawed component can trigger disclosure obligations and emergency patching across thousands of organizations. Sophisticated acquirers now insist on reviewing a Software Bill of Materials during due diligence — a detailed inventory of every software component, its provenance, and its known vulnerabilities — as a condition of closing.
For investors, this talent gap translates directly into portfolio risk. A software company that cannot recruit or retain cybersecurity staff is a company that may lean on automated tooling, outsourced security operations, or both — configurations that require their own forms of oversight and due diligence. Investors performing pre-acquisition assessments increasingly conduct penetration testing, cloud configuration audits, and identity access management reviews as standard protocol, according to practitioners at firms including EY, PwC, and CrossCountry Consulting. Remediation roadmaps that quantify costs and timelines for closing identified gaps have become expected deliverables in the deal process, not afterthoughts.
The information governance dimension is equally pressing, though less frequently discussed in investment circles. B2B software companies operating across European jurisdictions must navigate the General Data Protection Regulation, which governs how personal data is collected, processed, and stored. But GDPR is only one layer. The proposed EU‑Inc framework — a pan-European company form that the European Commission put forward as a legislative proposal on March 18, 2026 — could, if adopted and implemented, reshape cross-border data governance by creating entities that operate under a single corporate structure across all 27 member states. The proposal must still pass through the European Parliament and Council before becoming law, with the Commission targeting agreement by year-end. If implemented as proposed, EU‑Inc could simplify custodian identification for litigation or regulatory inquiries, centralize data holdings under a single corporate entity, and alter the jurisdictional calculus that currently fragments European discovery practice — developments that eDiscovery professionals should monitor closely as the legislation advances.
The eDiscovery angle extends beyond corporate structure. When a private equity firm acquires a software company, it inherits that company’s data — including email archives, customer databases, internal communications, and development repositories. In the event of litigation, regulatory investigation, or a subsequent M&A transaction, that data must be preserved, searched, and produced in compliance with applicable rules. The tension between US-style broad discovery and European privacy restrictions makes this particularly fraught for cross-border portfolios. A May 2025 preservation order in the OpenAI copyright litigation in the Southern District of New York illustrated the collision vividly: the court ordered preservation of user data despite potential GDPR deletion obligations, and denied a motion for reconsideration citing compliance risks within days. For European software companies held by global PE funds, this kind of jurisdictional conflict is not hypothetical — it is an operational reality that information governance and eDiscovery teams must plan for from the moment an acquisition closes.
Companies with poor information governance practices — inconsistent retention policies, ungoverned collaboration platforms, data scattered across multiple cloud environments — impose hidden costs on their acquirers. Those costs surface during eDiscovery, when the price of disorganization is measured in review hours, technology deployment, and potential sanctions for spoliation. Discovery vendors now offer platforms enabling secure, in-region document review that give US-based legal teams controlled access to foreign data while meeting local data-residency requirements — but deploying these solutions retroactively, after litigation has commenced, is far costlier than building governance infrastructure proactively during the post-acquisition integration period.
The convergence of these two fund launches with the evolving European regulatory landscape is not coincidental. European policymakers have deliberately created a regulatory architecture that links digital investment to operational resilience, data protection, and transparent governance. Investors entering this environment through vehicles like the INVL feeder fund or GVC Gaesco’s RIF are not simply buying into software companies or infrastructure startups — they are buying into a compliance ecosystem that demands continuous attention. The most sophisticated among them recognize that cybersecurity posture, information governance maturity, and eDiscovery readiness are not ancillary considerations but core components of valuation.
The trajectory is clear. Capital is flowing into Europe’s digital economy at a pace that reflects both the opportunity and the strategic imperatives of the moment — energy transition, digital sovereignty, and competitive positioning against global technology powers. The funds that will generate the strongest returns are likely those that treat cybersecurity and data governance due diligence not as a checkbox exercise but as an ongoing discipline embedded in portfolio management from acquisition through exit.
As European tech investment accelerates and regulatory frameworks like DORA, NIS2, and GDPR continue to evolve, how should investors balance the urgency to deploy capital with the discipline required to assess — and manage — the cyber and data governance risks embedded in every target company?
News Sources
- INVL Asset Management launches a fund to invest in technology companies in Northern and Western Europe (GlobeNewswire)
- New €70 million GVC Gaesco fund targets InfraTech startups focused on energy, industry and digital infrastructure (EU-Startups)
- Private Equity: Cybersecurity, a Significant Risk to Deals with $2.1M Financial Impact on Average, Kroll Finds (PRNewswire / Kroll)
- ENISA 2025 NIS Investments Report: Technology Prioritized as Cyber Talent Pools Contract (ComplexDiscovery)
- EU Inc. — Making business easier in the European Union (European Commission)
- OpenAI and the cross-border data dilemma: US litigation holds vs. GDPR erasure obligations (Kennedys Law)
- Securing software supply chains: how to safeguard against hidden dependencies (World Economic Forum)
- Why Cyber Diligence Is Non-Negotiable for Private Equity (CrossCountry Consulting)
- Cybersecurity in the Financial Sector: EU’s Digital Operational Resilience Act Takes Effect (Mayer Brown)
Assisted by GAI and LLM Technologies
Additional Reading
- The M&A Risk of Confusing Market Velocity with Marketing Capability
- From Principles to Practice: Embedding Human Rights in AI Governance
- Government AI Readiness Index 2025: Eastern Europe’s Quiet Rise
- Trump’s AI Executive Order Reshapes State-Federal Power in Tech Regulation
- From Brand Guidelines to Brand Guardrails: Leadership’s New AI Responsibility
- The Agentic State: A Global Framework for Secure and Accountable AI-Powered Government
- Cyberocracy and the Efficiency Paradox: Why Democratic Design is the Smartest AI Strategy for Government
- The European Union’s Strategic AI Shift: Fostering Sovereignty and Innovation
Source: ComplexDiscovery OÜ

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