IQ Capital raises $300m for deep tech fund

Investments to date have been made into companies that make smart home products, predict site maintenance and lever AI to enhance images for automated vehicles.

The Cambridge-based VC has closed its third venture fund, IQ Capital III, at $175m.  It has also launched a $125m Growth Opportunities Fund, bringing the total of capital to be invested in deep tech in 2019 to over $300m.

Deep tech refers to disruptive technologies that are based on breakthroughs in scientific or engineering fields that have the potential to redefine or create markets. This includes AI, robotics, Internet of Things and green energy.

IQ Capital previously invested into property-related companies such as:

• Privitar, software designed for enterprise-wide privacy protection which gives organisations the power to use and share data safely
• Audio Analytic, AI sound for smart homes and smart speakers
• Divido, a global consumer lending platform for financial institutions and multinational retailers
• Senseye, cloud-based software for predictive site maintenance
• Spectral Edge, image processing and machine learning for hardware like CCTV, webcams, driverless cars, and drones

The third fund builds on the success of previous rounds, including a double-dragon exit in May to Oracle, which returned the fund twice over, and enabled the first fund, IQCF1, to deliver a 3.5x net return to its limited partners.

Since its creation in 2006, the VC firm has achieved over 20 exits including trade sales to Google and Apple and multiple IPOs. The VC has made 22 deep tech investments over the past three years and expects to invest in 10 to 15 new companies per year.

IQ Capital typically invests between £300,000 and £5m in the initial stages, with the capacity to invest up to £10m per company throughout its life.

Ed Stacey, partner at IQ Capital, said: “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.”

Kerry Baldwin, partner at IQ Capital, said: “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.”