Additional piece: Europe’s Growing Deep Tech Scene and the Rise of AI
As the global tech industry continues to evolve and innovate, one area that is garnering increasing attention is deep tech. This term refers to technologies that are based on scientific advances and engineering innovation, such as artificial intelligence, quantum computing, genetic engineering, and nanotechnology. In Europe, the deep tech scene is rapidly growing, with a new influx of funding from investors looking to capitalize on the region’s cutting-edge research and development.
One company that is leading the charge in this area is IQ Capital, a London and Cambridge-based venture capital firm that specializes in deep tech investing. Earlier this year, the company closed its fourth venture fund for $200 million, bringing its total assets under management to over $1 billion. In addition, it launched a second growth fund of $200 million to provide later-stage funding for its portfolio companies.
Since its founding in 2007, IQ Capital has invested in over 100 high-tech startups, including banking platform Thought Machine, battery charging firm Nyobolt, and speech recognition provider Speechmatics. The company has also had successful exits to industry giants like Oracle, Google, Apple, and Facebook, as well as various IPOs.
According to Kerry Baldwin, co-founder and managing partner at IQ Capital, deep tech investing is “at the forefront of investors’ minds, topping $17 billion by 2022.” Despite the challenges of raising funds in a competitive market, Baldwin believes that IQ Capital’s focus on deep tech sets the firm apart.
“We’ve raised our flagship fund for deep tech, and that’s where we invest every day, in very, very deep tech,” Baldwin said in an interview. “These deep-tech academics really like us to go all the way, like we’ve done with Thought Machine, like we’ve done with Speechmatics. But yes, it has been an interesting financing environment.”
Europe’s Exceptional Talent in Generative AI
One area of deep tech that has drawn significant attention in recent years is artificial intelligence, and more specifically, generative AI. Generative AI refers to AI systems that have the ability to create new content, such as images, videos, and music, on their own, often using deep learning methods. While this field is still in its early stages, many experts believe it has enormous potential to transform multiple industries, from art and entertainment to healthcare and education.
When asked about Europe’s ability to compete with the major Big Tech platforms on generative AI, Baldwin expressed confidence in the region’s exceptional talent.
“We have exceptional talent in Europe. Generative AI has a long way to go, but it’s still not going to solve real-world problems,” said Baldwin.
Baldwin believes that the key to success in generative AI, as well as other areas of deep tech, lies in developing technologies that can solve real-world problems in a scalable way. This requires a deep understanding of the underlying science and engineering, as well as the ability to collaborate with experts in other fields.
College Spinouts and the Alma Mater Issue
One potential obstacle to the growth of deep tech startups is the issue of college spinouts, or companies that are founded by university researchers or students who have developed new technologies while working within the institution. While these companies have the advantage of being based on cutting-edge research, they can also face challenges related to intellectual property, funding, and management.
In the interview, Baldwin expressed optimism about the approach taken by Cambridge University, where IQ Capital has its roots.
“That’s where Cambridge University has been different, and obviously our roots are from Cambridge, London, and all over Europe. I think it’s going to be interesting to see the results of the UK government review that will come out in early September on this,” said Baldwin.
Overall, IQ Capital’s approach to deep tech investing reflects a larger trend in Europe, where there is growing recognition of the potential for scientific and engineering innovation to drive economic growth and societal progress. With new funding and a diverse range of startups and research institutions, the region is poised to become a major player in the global tech industry for years to come.
Summary:
IQ Capital, a deep tech venture capital firm based in London and Cambridge, has closed its fourth Venture Fund for $200m, while launching its second Growth Fund of the same amount to provide later-stage funding for portfolio companies. The company has invested in over 100 high-tech startups, including Thought Machine (banking), Nyobolt (battery charging), and Speechmatics (speech recognition). Investors in Fund IV include family offices, global institutions, funds of funds, and British Patient Capital, the UK’s largest LP investor in venture capital. While deep tech investing has been challenging in the current market environment, IQ Capital has been able to successfully raise funds for its flagship deep tech fund. The company sees exceptional talent in Europe and believes that the key to success in generative AI, as well as other areas of deep tech, lies in developing technologies that can solve real-world problems in a scalable way. With college spinouts becoming a potential obstacle to the growth of deep tech startups, Cambridge University’s approach to this issue is being closely watched. Overall, Europe is increasingly seen as an exciting hub of scientific and engineering innovation, with a rapidly growing deep tech scene.
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European Deeptech startups get another shot this week in the form of capital ICnew venture fund of $200 million. The new fund brings its assets under management to more than $1 billion.
The London and Cambridge, UK-based deep tech VC has closed its fourth Venture Fund for that amount, while also launching its second $200 million Growth Fund to provide later-stage funding, primarily across its portfolio companies. . This means that the VC will be able to deploy capital in more funding stages.
Since its founding in Cambridge in 2007, IQ Capital has invested in more than 100 high-tech start-ups including Thought Machine (banking), Nyobolt (battery charging) and Speechmatics (speech recognition). He also had outings to Oracle, Google, Apple, and Facebook, along with various IPOs.
Investors in Fund IV include global institutions, funds of funds, family offices and British Patient Capital, the UK’s largest LP investor in venture capital.
Kerry Baldwin, co-founder, managing partner, said deep tech investing was “at the forefront of investors’ minds, topping $17 billion by 2022.”
I asked him if it had been difficult to raise funds in this market: “Obviously it has been quite difficult to raise funds in this market environment, to put it bluntly. But we’re doing something different.”
“We’ve raised our flagship fund for deep tech and that’s where we invest every day, in very, very deep tech. These deep-tech academics really like us to go all the way, like we’ve done with Thought Machine, like we’ve done with Speechmatics. But yes, it has been an interesting financing environment”.
Given the huge debate surrounding generative AI, I asked if Europe will be able to compete with the major Big Tech platforms on that front.
“We have exceptional talent in Europe. Generative AI has a long way to go, but it’s still not going to solve real-world problems,” he said.
There has been criticism of how college spinouts are hampered by their Alma Maters. What is your point of view?
She told me: “That’s where Cambridge University has been different and obviously our roots are from Cambridge, London and all over Europe. I think it’s going to be interesting to see the results of the UK government review that will come out in early September on this.”
As Deeptech and AI explodes, European Deeptech VC IQ Capital closes new $200M fund
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