Isomer Capital announced a €150 million investment fund aimed at European technology-based businesses.
Soft launched towards the end of last year, the fund has already invested in five VC funds, covering 96 portfolio companies. Algomi, an information network for bond trading, is one of the high profile fintech companies currently in Isomer’s stable via its investment in Hoxton Ventures.
…Europe is three times more likely to create a Unicorn company.
“We see (that) some of the most exciting and brilliant start-ups are happening right now in the fintech space,” said Chris Wade, Partner at Isomer, speaking to Finance Magnates via email.
“If you look at a snapshot of our current portfolio, we have businesses like Stockholm based Cryex – the currency trading platform that will offer the European market transparency on price and cost, whilst increasing speed and lowering risk in clearing and settlement of FX products.”
Another company Wade pointed to is PassFort, which has developed a turnkey compliance platform designed to automate the collection, verification and secure storage of customer due diligence data and documentation.
Many of the best deals in the European technology market are private, move fast, require specialist expertise and still have high individual risk profiles, the firm said in a statement, noting that initial start-up funding for over 33,000 new European companies each year comes mainly from business angels or high net worth individuals.
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…European financial industry has always been an early adopter when it comes to new technology.
And though local funds provide subsequent capital to growing companies, throughout Europe, US-based investors provide capital to two out of every three financing rounds over $10 million in size.
Isomer’s strategy to early stage technology investing is in part an institutional approach, meaning the fund is a traditional GP/LP structure used in private equity, and open only to professional investors, explained Wade.
It partners with VC firms and supports them with expertise and additional capital. To date it’s invested in groups like Hoxton Ventures, White Star Capital, Felix Capital and Entrepreneur First and Connect Ventures.
The focus in Europe specifically targets funds backing technology-enabled, high potential businesses with the ability to scale in a capital efficient way to global markets, he added.
“When you look at the amount of capital deployed in Europe versus that of the US and compare it to the number of $1 billion valued companies created, Europe is three times more likely to create a Unicorn company,” Wade noted.
Fintech will be an important theme for two key reasons, he added.
“Europe has a number of the world’s most significant financial centres that are at the epicentre of innovation (and) the European financial industry has always been an early adopter when it comes to new technology.”