You know it’s spring when VC funds start to announce their new fund raises. But it’s buoying to see a new mid-sized fund appear, which over the years has been highly geared toward early-stage startups just starting out on their journey.
Pentech has closed its third fund, saying it was oversubscribed at £88 million, surpassing the original target fund size of £70 million. The new fund, which is double the size of Pentech’s previous fund, will invest in early-stage software companies across the U.K. at Series A and pre-Series A. LPs include the British Business Bank under its Enterprise Capital Funds program — and existing Pentech investors.
It now plans to create a new portfolio of around 20 companies over the next five years.
The VC has offices in Edinburgh and London, giving it an ever so slightly useful edge over some that might not see everything north of the border, where a sizeable startup scene has developed around unicorns like Skyscanner and FanDuel. It has been taking particular interest in AI, machine learning, big data and infrastructure such as blockchain in areas from fintech, health and wellness to enterprise.
Pentech has led investments in over 20 companies, often as the first institutional investor, taking position is FanDuel (fantasy sports); Nutmeg (wealth management); Outplay (mobile games); and Maxymiser, which was acquired by Oracle. It’s also been part of exits such as Acunu and Semetric to Apple and Struq to Quantcast.
Eddie Anderson, general partner, Pentech, said in a statement: “We love to work with founders who have a combination of global ambition, complete dedication to their mission and a true grasp of the realities of how to build businesses in a capital efficient manner.”
Partner Dr. Sandy McKinnon told me that what’s different now is that “Big data, which many of our Fund II companies build their business on has now become machine learning and AI.” There also is “a more active accelerator/seed community, which is great. Our focus is being first institutional investor post seed, and on occasion, will co-invest at the seed stage.”
Nick Hungerford, founder of Nutmeg, said: “Pentech is a rare breed of VC, no fuss, no credit required; just all action and steady support.”
Pentech’s fund raise follows a wave of new funds launched out of the U.K.