Award-winning Cambridge-based venture capital firm IQ Capital continues to go from strength to strength – achieving more than 20 exits to date and leading 22 deep-tech investments in just the last three years.
The team’s focus is on ‘deep tech’ across sectors including machine learning, artificial intelligence (AI), engineering and materials, and data-focused propositions based on disruptive algorithms. All the firm’s investments are capable of dominating their respective markets on a global scale.
IQ Capital typically invests at seed and series A stage, with significant capital reserved to scale portfolio companies through their growth stages. Initial investments range from £300k to £5m, with capacity for follow-on investment up to £10m. Most of the companies are based in or connected to the Cambridge ecosystem.
Exits to date include trade sales to Oracle, Google, Apple, Facebook and Huawei – and several IPOs. The team was named Seed Fund of the Year at the GP Bullhound Investor Allstars 2018.
Behind IQ Capital are partners Max Bautin, Kerry Baldwin and Ed Stacey, who all have deep-tech knowledge and have been working together for more than 20 years, helping tech companies rapidly scale. They are currently investing from their third £125m fund (IQCF III) created in June 2018.
Max Bautin said: “When we launched our first fund over 10 years ago, we had the ambition to become the pre-eminent fund for deep tech in the UK. Over the last 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 deep-tech companies, so our latest fund will see even bigger successes.”
Ed Stacey added: “Deep tech 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 deep tech, 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 unique, and we are proud to be right at the heart of it.”
Kerry Baldwin commented: “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.”
This year’s investments from IQ Capital have included participation in a £18m Series A round for a ‘bank’s IT in a box’ Google spin-off – Thought Machine – which IQ Capital first invested in at seed stage back in 2016.
The company has already won several large banks as clients for its cloud-based, full-stack IT platform – including Lloyds Bank in the UK.
Paul Taylor, founder CEO of Thought Machine, previously built Cambridge-based Phonetic Arts, which was sold to Google.
IQ Capital has also contributed to a scale-up funding round in Cambridge-based proteomic company Fluidic Analytics (which it has backed from seed stage onwards) and co-led a £2.9m seed round for graphene technology development company Paragraf – a recent spin-out from the University of Cambridge.
Using a proprietary, patent-protected approach, Paragraf has overcome the problems of poor uniformity, reproducibility, limited size and material contamination that have stymied all current graphene manufacturing techniques – as well as developed highly differentiated graphene sensors and other devices.
Apperio, a legal tech start-up which provides companies and their legal teams with complete visibility of legal spend, raised $10m in a Series A funding round supported by IQ Capital.
Apperio allows customers to track both billed and unbilled hours – in real time – and run analytics and monitor law firm performance. It is working with a range of FTSE 100 and private companies such as Just Eat and Network Rail.
Spacetech pioneer Oxford Space Systems (OSS) is another company that has benefited from IQ Capital investment this year – securing £6.7m in funding from a syndicate of investors.
The funding will help accelerate the development of OSS’s technology – pioneering the development of a new generation of deployable antennas and structures that are lighter, less complex and lower cost that currently available.
In September this year, IQ Capital also led – along with Eos Venture Partners – a £5m equity funding round for insurance technology company Concirrus, which is transforming pricing in the marine and motor insurance markets.
It announced a global deal with EY and world-largest insurance broker Marsh, which sees the companies working together to drive adoption of Concirrus’s technology.
Other Cambridge-based companies in IQ Capital’s portfolio include intelligent sound recognition specialist Audio Analytic, automatic speech recognition firm Speechmatics, cutting-edge image processing specialist Spectral Edge, machine learning algorithm optimisation firm Myrtle and ‘super GPS’ developer Focal Point.