UK DeepTech VC IQ Capital launches new $125M growth fund, closes third VC fund at $175M

IQ Capital, a UK-based deep tech fund which has invested in startups such as Paragraf, Senseye and Funderbeam, has launched a new $125 million ‘Growth Opportunities Fund’ and closed its third venture fund, IQ Capital Fund III, at $175 million. This brings the total new capital to be invested to over $300 million. National Grid Partners have joined British Patient Capital and a number of other global institutions, as an investor in IQ Capital Fund III.

The move is part of a wider shift in VC investing across Europe towards so-called deep tech (AI, BioTech, Blockchain etc).For instance, Adara Ventures, a spanish VC firm recently closed its third fund with commitments in excess of €65 million to back European early-stage deep tech startups.

IQ says the $125 million fund will provide later-stage capital to the best-performing companies in their existing portfolio. The first to benefit from this is Privitar, a startup in data privacy engineering which IQ Capital funded from seed stage, as part of its $40 million Series B funding round announced last month.

Alongside the launch of the new fund, IQ Capital has reached the final closing for its third venture fund at $175 million, which focuses on investing into companies at Seed and Series A stage. In the last year, IQ Capital has invested in 12 companies, including Causalens, Concirrus, and Iotic. Previous Fund II startups include Thought Machine, Fluidic Analytics, Paragraf, and Speechmatics.

Max Bautin, Co-Founder and Partner at IQ Capital, said a statement: “The partners, Ed Stacey, Kerry Baldwin, and I, have been investing in deep-tech for over 20 years, and during this time we’ve seen investment in the sector grow from tens of millions p.a. to $1.75 billion deployed across Europe in 2018 alone. Half of this capital was invested into UK start-ups, reinforcing the UK as a leader in Europe, with well-established technology ecosystems formed in Cambridge, Bristol, Oxford, and London.

“IQ Capital has grown its funds under management over 10x in the last five years, following exits to Google, Apple, and Facebook, and a double-dragon to Oracle. The investment team has tripled in size over the same period with recent joiners Rick Hao, Daniel Carew and Marek Chalupnik. IQ Capital is now firmly established as the leading deep tech investor in the UK.”

Lisa Lambert, Founder and President of National Grid Partners said: “IQ Capital… is positioned as the go-to deep-tech fund in the EU, and the team has a proven ability to connect with founders through all stages, from seed to exit.”