Cambridge-based IQ Capital has raised £92m to invest at Seed and Series A stages into UK deep tech companies or businesses with transformational AI or disruptive algorithms.
IQCF III, as the fund is known, comes off the back of IQ’s existing funds, which included a ‘double dragon’ exit in May to Oracle (a deal that returned an entire fund twice over), enabling the first fund, IQCF1, to deliver 3.5x net return to its limited partners.
IQ Capital was set up 10 years ago by Max Bautin, Ed Stacey and Kerry Baldwin, who worked together for more than a decade and achieved a series of exits to technology giants such as Google, Apple, Oracle and Huawei.
Commenting on the news, Bautin, a partner at IQ Capital, said: “When we launched our first fund over 10 years ago, we had the ambition to become the pre-eminent fund for deeptech in the UK.
“Over the past few years, this sector has grown tremendously and produced a number of world-leading companies. We are seeing brilliant entrepreneurs bringing ever more experience and ambition to scale up their deeptech companies, so our latest fund will see even bigger successes.”
Investors in the first close of IQCFIII include family offices, wealth managers, tech entrepreneurs and several CEOs from the firm’s portfolio companies.
The fund also received equity investment from British Business Investments – the commercial arm of the British Business Bank.
Stacey, also a partner, added: “Deeptech is increasingly being appreciated by investors and corporates alike, for its massive potential to disrupt and reconfigure industries. As one of the first investors focused on UK deeptech, we are delighted with the growth of UK expertise and ambition in the sector, and we anticipate it will continue to strengthen. In particular, the development of the tech ecosystem in Cambridge is quite unique, and we are proud to be right at the heart of it.”
Baldwin went on to note: “Beyond the cash injection, we are seen as true partners supporting entrepreneurs to scale their businesses. Trust with our founders is absolutely essential and we work closely together on all the challenges that arise with scaling globally – both technical and commercial challenges.”
IQCF III has the ability to invest up to £10m per portfolio company.