Sunday 25 September 2016

Boost for start-ups as VC firm ACT close to launch of €100m expansion fund

Published 27/03/2016 | 02:30

Brendan O'Driscoll of Soundwave
Brendan O'Driscoll of Soundwave

Dublin-based venture capital firm ACT is targeting the launch of a €100m fund providing expansion money to start-ups within months, the Sunday Independent understands.

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ACT is believed to have secured €70m in commitments from investors, and it aims to secure the remainder over the next number of months.

It has had a number of high-profile successful exits over the past year, including Trustev (the Cork-based e-commerce fraud-prevention company that was sold to New York-listed Transunion) and Soundwave (the music tech start-up that was sold to Spotify).

It was also an investor in HeartSine, which is a Northern Ireland-based defibrillator company that recently announced it had agreed to be acquired by the US company Physio Control.

Other companies in which it has previously invested include internet-of-things company Cubic Telecom, foreign-exchange trading and risk-management software company Barracuda FX, the media company Storyful and medical software company Slainte Healthcare.

It has offices in Dublin and Belfast and customarily invests between €200,000 and €7m in funding rounds of up to €30m.

The new fund will be a significant boost for the Irish start-up scene and comes on the back of Atlantic Bridge closing a funding round believed to be in the region of €100m.

Both deals replenish the funds that will be available to Irish start-ups that are seeking to grow.

Players in the venture-capital sector will seek to continue the momentum seen last year, when Irish hi-tech SMEs raised 30pc more money - €522m - than in the previous year, according to figures from the Irish Venture Capital Association.

IVCA chairman Brian Caulfield, a partner at venture capital firm Draper Esprit, said the results showed increased interest in the Irish tech sector from overseas investors and were a "tribute to the calibre of its entrepreneurs and technology".

International investors provided 46pc of the funds raised in 2015, compared to 33pc in 2014, according to the IVCA figures.

"The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs, both through direct investment and as the local lead investor for international syndicate investors," he added.

Growth/expansion funding - the type ACT will look to provide via the new fund - was 92pc of total funds raised, according to the IVCA figures.

IVCA chief executive Regina Breheny said that since the credit crunch started eight years ago, more than 1,200 Irish SMEs had raised €2.6bn of venture capital.

"These funds were raised almost exclusively by Irish VC fund managers, who, during this period, supported the creation of up to 20,000 jobs and attracted over €1.1bn of capital into Ireland," an IVCA statement said.

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