British Business Bank leads £42m financing of tech start-up fund
IQ Capital Fund 2 will provide individual investments of up to £5m in early stage companies with “high-growth potential”
The government-backed British Business Bank has led a £42m round into a new fund for technology and B2B start-ups, the IQ Capital Fund 2.
Supported by £25m investment from the Business Bank and £17m of private backing, the new fund will support individual investments of up to £5m in early-stage companies with “high-growth potential”, an increase on the previous £2m funding limit.
The fund will only invest in partnership with an angel investor – an ‘IQ Angel’ – who will have expertise in the business’ sector.
The news follows on the back of the IQ Capital Fund 1 which was founded in 2006 and saw several portfolio companies go on to be acquired by the likes of Google and Apple.
British Bank CEO, Keith Morgan, commented: “The creation of this fund is an important landmark in the development of the Enterprise Capital Funds (ECFs) programme into one which meets the market demand for greater availability of growth and equity capital.
“Funds such as this will play a central role in closing the equity gap faced by some early-stage businesses at a vitally important stage in their development.”
Max Bautin, partner at IQ Capital, added:
“The higher round size limit enabled by the British Business Bank will allow IQ Capital Fund 2 to target larger investments into technology businesses with the ability to become world-class leaders in their sectors.
“IQ Capital Fund 2 will continue with the simple, yet highly effective, investment strategy demonstrated in its predecessor fund, focusing on the best UK early stage and growth capital technology deals and adding value to them through its partnership with the most experienced class of sector-specific, successful angel investor.”