European Deeptech startups got another shot in the arm this week in the form of IQ Capital’s new $200m venture fund. The new fund takes its assets under management to more than $1bn.
The London and Cambridge, UK-based deep-tech VC has closed its fourth Venture Fund at that amount, while also launching a second $200m Growth Fund to provide late-stage funding, particularly in venture portfolio. The way the VC is able to deploy capital in multiple rounds of funding.
Since its founding in Cambridge in 2007, IQ Capital has invested in over 100 deep-tech startups such as Thought Machine (banking), Nyobolt (battery charging) and Speechmatics (speech recognition). It also had exits at Oracle, Google, Apple and Facebook, along with several IPOs.
Investors in Fund IV include global institutions, funds of funds, family offices, and British Patient Capital, the largest LP investing in UK venture capital.
Kerry Baldwin, co-founder, Managing Partner said that deep technology investment “is at the forefront of investors’ minds, leading to $17bn in 2022.”
I asked him if it was difficult to raise funds in this market: “Obviously it’s very difficult to raise it around the market, to put it bluntly. But we do it differently.”
“We raised our core funding for deeptech and that’s where we invest every day, really, deep technology. These deep tech academics really want us to continue, like we did with Thought Machine, like we Speechmatics has done. But yes, it’s an interesting funding environment.”
Given the huge debate taking place around Generative AI, I asked him if Europe would be able to compete with the big Big Tech platforms on that front.
“We have incredible talent in Europe. Generative AI has a long way to go, but it has yet to solve real world problems,” he said.
There have been criticisms of how University spinouts have been blocked by their Alma Maters. What is his view?
He told me: “That’s where Cambridge University is different and clearly our origin from Cambridge and London, and the whole of Europe. I think it will be interesting to see the results of the UK Government review coming out early in September about it.
