IQ Capital raises over $300 million to invest in UK deep tech

IQ Capital has announced a $125 million Growth Opportunities Fund; bringing the total invested in UK deep tech this year to over $300 million.

Deep tech venture capital firm, IQ Capital, has launched a new $125 million Growth Opportunities Fund and closed its third venture fund, IQ Capital Fund III, at $175 million; bringing the total new capital to be invested in UK deep tech to over $300 million.

According to the announcement, the $125 million Growth Opportunities Fund will provide later-stage capital to outperforming companies in their existing venture portfolio.

Deep tech refers to new and emerging technologies that have been developed following scientific and innovation breakthroughs; AI, blockchain, the IoT and biotech fall into this category.

Privitar, the global leader in data privacy engineering which IQ Capital supported since seed stage, is the first investment from the new fund, as part of the $40 million Series B funding round.

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Alongside the launch of this new fund, IQ Capital has reached the final closing for its third venture fund at $175 million — which was significantly oversubscribed, with more than 90% of the firm’s Fund II investors doubling down on their commitment by re-investing in Fund III. Fund III focuses on investing in companies at Seed and Series A stage.

In the last year, IQ Capital has invested in 12 companies, including Causalens, Concirrus and Iotic. These early-stage startups will join Fund II scaleups Thought Machine, Fluidic Analytics, Paragraf,and Speechmatics, driving the portfolio enterprise value to more than $1.2 billion.

Max Bautin, co-founder and partner at IQ Capital, said: “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.”

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National Grid Partners have joined British Patient Capital and a number of other global institutions, as an investor in IQ Capital Fund III.

Lisa Lambert, founder and president of National Grid Partners said: “IQ Capital impressed our team on many levels, not least in having one of the most experienced female general partners in the UK, Kerry Baldwin. The firm 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.”

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...