Cambridge VC firm IQ Capital raises $300m ‘deep tech’ fund

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IQ Capital, a venture capital firm based in Cambridge, has raised more than $300m to invest in long-term “deep tech” projects.

The company, founded in 2007, on Monday announced the closure of its third venture fund, which focuses on investing into companies at seed and Series A stage, at $175m.

IQ Capital said it had also raised a $125m “growth opportunities fund” to provide later-stage capital to outperforming companies in their existing venture portfolio. Initial investments will range from £300,000 to £5m, with scope for follow-up backing worth up to £30m.

The term “deep tech” refers to technologies developed based on substantial scientific advances and engineering innovation, such as artificial intelligence, biotech and the “internet of things”.

IQ Capital is one of many businesses working to establish Britain as a global leader in cutting-edge technology, alongside a number of well-known companies, including the AI start-up Deepmind, which was bought by Google for £400m in 2014.

IQ Capital’s portfolio includes Audio Analytic, a company producing AI software to give machines a “sense of hearing”, Speechmatics, which uses deep learning to produce fast language translations, and agritech firm Kisan Hub.

Max Bautin, co-founder and partner, said: “Deep tech is really hard, and it has taken us years to find the perfect model.”

“It’s not just about ideas,” he added. “It’s about finding the right people, the ones who can figure out how to transform their technology into a product, before scaling up and taking it international, taking them to the next step.”

Mr Bautin said IQ Capital would begin approaching companies with offers of investment “soon”, but said it was “open to suggestions”.

National Grid Partners, the investment arm of the electricity and gas utility firm, invested in the third venture fund. IQ Capital declined to comment when asked how much NGP had invested.

Lisa Lambert, NGP president, said IQ Capital impressed her team “on many levels”, adding: “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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