Investment Completion: IQ Capital Venture Growth Co-Invest

News: Investment News | 1 August 2020

Our newsletter

Strong demand from Connection Capital clients for rare chance to invest in later stage UK “deeptech” companies

  • £5m raised from HNW private investors within a month to invest in a portfolio of high growth B2B tech investments alongside specialist private equity tech investors
  • Opportunity to back proven venture outperformers with potential to achieve global scale

Connection Capital clients committed a total of £5m within less than a month to participate in the final close of the £100m IQ Capital Growth Fund I (‘the Fund’ and ‘Growth Fund I’), co-investing alongside top-tier specialist private equity tech investors, such as Warburg Pincus, Accel and Draper Esprit.

The Fund is focussed on driving growth in businesses which were top performers in fund manager, IQ Capital Partner’s venture portfolio, and which have proven business models, substantial established revenues, strong management teams and global addressable markets. Its strategy targets B2B technology solutions covering areas such cyber security, high performance engineering, data analytics and enterprise software.

Three assets are already held in the Growth Fund I portfolio: Thought Machine, an innovative banking platform that has developed scalable, robust “cloud-native” technology; Privitar, a privacy software specialist and Concirrus, an insurtech company which uses real-time data analytics to improve pricing and loss ratios for commercial insurers. It is expected that the Fund will ultimately hold between six and eight assets.

Usually such opportunities to buy into a portfolio of high growth, later stage tech investments are only open to institutional investors with high investment minimums. However, Connection Capital clients were able to participate in multiples of just £25,000, thanks to Connection Capital’s strong relationship with IQ Capital, and due to its unique model that aggregates private capital and effectively acts as an institutional investor on private investors’ behalf.

Claire Madden, Managing Partner at Connection Capital, comments, “The scale of demand from our client base shows what an exciting opportunity this is.”

“The IQ Capital Growth Fund I offers exposure to a portfolio of investments which have traction in significant tech-enabled market transformation. It is also designed to deliver attractive capital returns over a shorter period than the norm for earlier stage venture assets, which typically require a lot of patience.”

“Private equity can be a difficult asset class for private capital to access at the best of times, but this segment of the high growth global tech market, targeting businesses that have what it takes to become major players on the world stage, is one of the hardest of all for HNW individuals to get into.”

“This is a portfolio of assets which have outperformed at the venture stage, whose technology and business models are proven and therefore de-risked, and which have significant scope to continue their growth trajectories and achieve global scale.”

She adds, “We work hard to nurture our industry relationships with leading fund managers, like IQ Capital, recognising that offering access to opportunities like this is how we stand apart from others in our space and how we can add value to our clients.”

Max Bautin of IQ Capital comments, “The deeptech market is expected to continue to grow as start- ups are growing to become an ever-increasing share of the global economy and large tech companies seek to acquire cutting-edge businesses to expand and stay competitive. Technology will continue to be at the core of disrupting trillion-dollar industries, enabling the best deeptech innovators to grow exponentially as they scale. Deeptech is a very dynamic area to invest in, and we are delighted to have Connection Capital on board.”