Finding investment as a deep tech business can be a difficult and arduous task. Whilst raising capital is rarely a walk in the park, funding for deep tech can be notoriously challenging because of its complex nature. Founders can struggle to communicate a real understanding of their startup, which can leave investors feeling unsure about its true potential.
There’s no shortage of fantastic deep tech businesses here in the South West – take a look at our one’s to watch article for a flavour of the pioneering startups, scaleups and unicorns in the region – but the investment is needed to match, sustain and expand their work.
To help combat this, we’ve compiled a list of the five most active and well-known deep tech investors in the UK, as well as a shoutout to the newly created South West deep tech EIS Seed Fund, Science Creates Ventures (SCV). These firms and networks have a long track of successful investments in highly innovative business; if you are a founder looking for capital, they are definitely worth checking out!
Amadeus Capital
Amadeus Capital is a well-established Venture Capital company that was founded in 1993. Headquartered in Cambridge, the firm has been actively investing in deep tech companies across the UK for many years and it should be the first stop for founders looking for capital.
They are well-known for making early bets on deep tech startups. In the past; Amadeus Capital has shown great interest in early-stage UK businesses that are involved in artificial intelligence, cybersecurity, quantum technologies, and machine learning.
Amadeus is nearly always looking for opportunities to invest in companies that are developing new technologies, as well as supporting them in the commercialisation process. From examining their trends, Amadeus usually invests in early stages (seed and Series A) for UK businesses, whereas when it comes to European and American companies they tend to invest in later stages.
Image Credit: Photo by ThisIsEngineering from Pexels
Some of their most notable exits are NASDAQ listed ForeScout, OneDrum (acquired by Microsoft) and VocalIQ (acquired by Apple). In 2020 and so far in 2021, Amadeus has invested over £292m, including £116m in the Bristol-based unicorn Graphcore, and other 19 companies such as QUIBIM, Nu Quantum, and V7
The key things Amadeus Capital looks for in a company looking for funding are: having a great team, a competitive edge, meeting under-served customer needs, operating in big markets and great scalability and global potential. Founders who think meet all requirements are welcome to submit a proposal via their official website.
Bloc Ventures
Bloc Ventures was founded in 2013 and is headquartered in London but with a team spread across the UK. The team is made up of former engineers, entrepreneurs and corporate venture investors from ARM and Vodafone, where their investments led to a number of large deep tech exits such as Affirmed Networks (acquired by Microsoft) and Thundersoft (IPO). Bloc’s investment focus is entirely on deep tech and they typically focus on companies building complex technology which sits deep in the stack, rather than consumer products.
Given the team’s experience working in telecoms, communications and semiconductors, it’s no surprise to see these areas feature heavily in their portfolio such as University of Southampton spin-out AccelerComm, which raised £5.8m in Series A funding last year, led by IQ Capital with Bloc leading the Seed round. Their four core focus areas are cloud computing (they are the lead investor in Bristol-based YellowDog), data science (they recently invested in Mindtrace), connectivity (Bloc is lead backer and it’s co-founder David Leftley is Chairman of Zeetta Networks) and security (such as Tether, a company which Bloc has backed to bring legacy video surveillance to the cloud).
The investment team at Bloc all have engineering degrees and experience in operational, technology focused roles. That means they’re able to be a supportive investor on many fronts: technology, product and fundraising. In addition, with two former VPs from ARM and the former VC team from Vodafone, they have strong connections to global technology giants such as Apple, Amazon, Facebook and Google. This provides the portfolio with vital commercial introductions and potential hiring solutions as they grow and begin to reach product market fit (a crucial stage in the deep tech journey).
Bloc’s most mature investment is in EVRYTHNG, a late stage company connecting physical products to the internet on behalf of some of the world’s largest brands, such as CocaCola, Ralph Lauren and Loreal. Another of it’s later stage portfolio companies is Marmalade, a game studio (not deep tech) which started out as a game production engine (deep tech) but pivoted and today produces the Monopoly game on behalf of Hasbro.
In recent times, Bloc has expanded its team (four people hired in the last 12 months) and that would indicate they’re looking to increase the portfolio. They typically invest between Seed and Series A rounds in deep tech companies typically throughout the UK but also across Europe (they backed Belgium-based Pharrowtech in 2019). You can reach out to Bloc directly via their website.
Cambridge Angels
Cambridge Angels is an Angel Network that was founded in 2001 and is a leading UK business angel network with international connections. As the name suggests, it’s headquartered in Cambridge and its members comprise successful entrepreneurs as well as business experts.
At Cambridge Angels, they are actively engaging in mentoring and investing in innovative entrepreneurial teams and their ideas, to achieve returns and help realise their full potential. They invest in a wide range of startups and scale-up businesses but focus mainly on technology, internet, software, and hardware.
In the past, Cambridge Angels has shown great interest in South West deep tech companies having previously invested in Rovco (£6m) and SilverRay (£150k). Cambridge Angels has invested over £24m in UK businesses since 2020. Some of their most notable investments are Cambridge GaN Devices (£6.95m), Flusso (£4.53), Techspert.io (£3.76m) and Poro Technologies (£1.5m).
The typical funding requirement that Cambridge Angels meets is in the range of £50,000 to £500,000, however, as we can observe in their recent investing activity, several of their portfolio companies have received well above £1m from their members.
Overall, Cambridge Angels offers companies in their portfolio with mentorship and great advice backed by their previous success and their 20 years of experience in the field. Entrepreneurs interested in joining their portfolio can apply via their website. You will then be required to present a brief pitch and, if successful, a full pitch during one of their dinner meetings that are regularly held at Cambridge colleges.
IQ Capital
IQ Capital has great experience at investing in deep tech companies and has been supporting businesses since its founding in 2003. Once again, IQ Capital is headquartered in Cambridge – investment firms in the area are deeply interested in the deep tech scene!
Since its founding, IQ Capital has been investing in Seed and early-stage deep tech companies, therefore they have a very good understanding of how tech companies operate and know exactly how to support growing tech businesses. Predominantly IQ Capital invests in startups involved in artificial intelligence, machine learning, data science, and disruptive algorithms. They look for businesses that have developed or are developing new hard-to-replicate technology with founders teams that are highly motivated and capable to cope with the challenge
Notable exits include Grapeshot (acquired by Oracle), Bloomsbury AI, and ChargePoint Services. Since 2020, IQ Capital has invested over £200m in deep tech companies in the UK, some of the most notable investments are Privitar (£72.9), Cambridge GaN Services (£6.95m) and CybSafe (£5.78m).
IQ Capital is one of the few firms that are solely focused on deep tech and have shown great investing activity during recent times. Furthermore, their experience in the field allows them to support businesses in a much more tailored manner that other sector agnostic firms.
For those interested in getting in touch with IQ Capital the best way to do so is by either making a phone call or sending them an email directly. All contact details can be found on their website.
Force Over Mass
Force Over Mass was founded in 2013 and it’s headquartered in London. Force Over Mass doesn’t solely invest in deep tech, however, they’ve shown great interest in businesses in the field and have been busy investing activity in the past year.
Force Over Mass focuses on B2B technology innovation (Industry 4.0, Artificial Intelligence, Fintech) in Europe and the UK. They invest in companies that combine transformational technology with strong business models. Their portfolio has a wide variety of businesses but the most common sectors are: artificial intelligence and robotics, Big Data and analytics, blockchain and crypto, cloud computing and networking, fintech, legaltech and govtech.
Force Over Mass have different funds, their FOM EIS Fund invests in early-stage technology companies that benefit from EIS tax relief. The fund is open to investors with over £25,000 in capital. Their FOM Growth Fund typically invests in Series A and B rounds, when companies have found product-market-fit and additional capital is used to scale the business.
Some of their notable exits are Velocity, What3Words, SenSat and Huckletree. In the past year, Force Over Mass has invested £34.5m in 12 different UK companies, such as Admix (£6.67m), Moteefe (£8.25m) and Pomelo Pay (£2.06m).
If you are an investor interested in their fund, you can contact them via their website to find more information about the process. For founders looking for funding, you should have a pitch ready and send it over to pitch@fomcap.com.
Martlet Capital
Martlet Capital is an early-stage investor based in Cambridge, providing patient capital to deep technology and life science startups with high growth potential. The firm was founded in 2011 and, although it mainly looks for early-stage startups, recent investment activity shows that they also tend to invest well over £1m on certain occasions.
The firm provides early-stage patient capital and support. They thrive to help founders and ventures grow by providing added value beyond money. This may include helping companies build teams and boards, advising on strategy, connections to technical experts, customers and investors, as well as being part of the community of their portfolio companies. Martlet Capital always co-invests alongside other VCs, angels or seed funds.
In their own words “We seek early-stage ventures that can demonstrate their potential for rapid growth and will usually possess a strong defensible position with respect to their technology, intellectual property and products. We typically focus on pre-seed, such as university spin outs, and seed stage ventures that have completed a proof of concept and explored demonstrable commercial demand for the technology under development”.
Recently Martlet has invested over £20m spread over 8 UK businesses, such as Cambridge GaN Devices (£6.95m), Flusso (£4.53m) and Nu Quantum (£2.1m). Companies that meet their criteria are welcome to submit their investment proposal via their website.
Bonus: Science Creates Ventures
Evidently, Cambridge appears to be one of the dominating regions in deep tech investing, with 4 out of 5 in our list being headquartered in the region, so its excellent news for the South West that the region’s first and only deep tech fund, Science Creates Ventures (SCV), has now come into fruition
Science Creates saw a gap in the market, as well as a crucial need, for dedicated deep tech startup support in the South West. Created specifically for science and engineering startups, SCV invests from £250k to £1.5m and is focused on pre-seed and seed-stage companies – if it sounds like your business fits the bill, don’t hesitate to get in touch.
When talking about why funds like SCV are so important, CEO, founder and general partner of SCV Dr Harry Destecroix, says, “Innovative companies need a lot of support and they need investors that understand their businesses. We’re here to help more great companies emerge.”
Its inaugural investment was made recently in biotech startup CytoSeek, who is developing new cell therapies to treat solid tumours in cancer patients.
Speaking of the investment, Harry tells us, “Historically, biotech companies in the South West have struggled to raise sufficient capital, even though the technology and research has been there. While founding my own start-up, Ziylo, I became aware of just how many discoveries failed to emerge from the lab in Bristol alone. No matter the quality of the research and discovery, the right ecosystem is fundamental if we are going to transform the 90% failure rate into an 88% success rate for companies, and create many more successful ventures.
“It’s why we launched SCV; to find great technologies, syndicate with other world-class investors and get sufficient capital to help companies accelerate their technologies to market.”
You can read more about the CytoSeek Investment and SCV in our recent article here.
Main image credit: Photo by Christina Morillo from Pexels
Top Deep Tech Investors in the UK:
- Amadeus Capital
- Bloc Ventures
- Cambridge Angels
- IQ Capital
- Force Over Mass
- Martlet Capital
- Science Creates Ventures
