Industry Archives: Funds

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Early-stage Medical Device Private Equity Fund

This proposed $75 million private equity partnership (the “Partnership”) intends to build a diversified investment portfolio by commercializing university-developed IP related to medical devices, diagnostics and related technologies. The Partnership intends to accomplish this by forming operating teams that will create a series of startup companies around the IP, which will be actively managed and developed into successful businesses. The Partnership estimates that it will create approximately 12 to 18 startup companies with initial investments ranging from approximately $0.5 to $1.5 million and additional follow-on investments of potentially $3 million to $5 million per company. Between years five and ten, the Partnership intends to monetize this portfolio of startup companies through IPOs, private sales of the companies, or asset sales of the underlying technology.

U.S. universities are the largest performers of basic research in the United States, conducting approximately $68 billion of annual research and development each year. However, that $68 billion yields only about 600 new startup companies per year. A great deal of promising university research consistently fails to be developed and commercialized and only a small portion of new IP with commercial applications result in the formation of new companies.

There are two key reasons for the lack of university based startups: (i) a shortage of seed capital, due to the fact that venture capital funds have generally exited from this early-stage market segment, and (ii) the relative absence of applicable business skill sets at universities. In response, a $75 million private equity partnership (“Partnership”) to solve this problem and take advantage of this opportunity by filling the funding gap for early stage capital and by providing the business skills and management that university-based startup companies need to succeed.

The Partnership is being organized by a medtech-specific investment team with significant U.S. university medtech commercialization, company-building and Wall Street experience. A group of professionals has been assembled with the diversified skill sets necessary to execute the business plan to commercialize early-stage, university-based IP in the medical device, diagnostic and related technologies space. The Principals have:
• Long-standing relationships with U.S. universities. In 2012, the principals’ Innovation Cluster schools expended over $13 billion in Science and Engineering R&D and were awarded over 1,000 patents.
• Invested over $50 million in translational research grants to U.S. universities in over 250 separate IP assets, all in the medical device arena. This capital resulted in an additional $1 billion of follow-on capital from angels, venture capital firms, institutional investors, and strategic investors and generated a success rate of over 27%;
• Responsibility for all operational aspects of commercializing a large portfolio of early stage medical device technologies by overseeing a $20 million endowment that will be used to de-risk and commercialize future medical device technologies, included in this is all program management aspects of a portfolio of over 40 early medical device technologies on behalf of one of the University Cluster schools.
• Successfully started, managed, and sold multiple medical device companies;
• Been responsible for sourcing investment opportunities as part of IBM’s Venture Capital Group, which resulted in over $1.5 billion of acquisitions;
• Served on various boards and panels in medical device industry including:
o The Executive Committee for the PPDC, which is a joint program between Children’s Hospital of Philadelphia, Drexel University and the University of Pennsylvania that supports practical medical device projects benefitting children.
o As program manager for the Drexel University – Hebrew University joint translational research program to tackle unmet needs in healthcare.
o The Biomedical Engineering – Medical Devices Panel for Small Business Technology Transfer (STTR) program, a program to stimulate technological innovation in the private sector.

The Partnership also has an Advisory Board of 13 professionals with extensive business, financial, legal, and entrepreneurial expertise including experience in the health care and medical device sectors with impressive technical, medical device, and patent expertise.

The Partnership offers an investor the opportunity to make impact investments through the commercialization of potentially breakthrough medical device IP, with the hope of improving patient care and well being, while at the same time generating high investor returns.

The Partnership has more detailed offering material available. The Principals are also available to meet or a have call to discuss the Partnership in greater detail.
Deal Contact:
International IP Enterprises
Kevin McGuinness
[email protected]
+1 215 421 7899

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Russian venture 2014 – The highlights

As a busy year draws to a close, RusBase has asked 10 Russian venture capitalists what they think were the most important events of 2014.

  • Andrey Romanenko, Run Capital: “Considering that Run Capital was only founded in April, we think this year was a successful one. The most important event for us was our $6 million investment in AppInTop. We see a huge amount of potential in the mobile advertising market, and are 100% behind the project, its founder, and its team.”

Run Capital is a 1-billion ruble fund (approximately $17 million at the current exchange rate) launched this past spring by executives from Qiwi, a major Russian payment company.

  • Victor Osyka, Almaz Capital“Venture funds exist in order to make profits for their investors, and to achieve this they have to make exits from their investments. Thus we are delighted with to have made yet another successful exit with the acquisition of our portfolio company nScaled by Acronis. Acronis is a Russian company which sells backup software globally, and nScaled fits perfectly into the firm’s profile. This is Almaz Capital’s fourth exit after the sale of video messaging service Qik, Vyatta and Yandex’s public offering.”

Almaz Capital is a venture fund operating globally from its Moscow and Silicon Valley offices.

  • Andrey Malafeev, Bright Capital“This year Bright Capital has been involved in several deals, all of which went very well. However, I would describe the year’s most important outcome as the strengthening of our portfolio companies’ investors. In August, Saudi Aramco, the national oil company of Saudi Arabia, became a shareholder in Siluria, a startup which is developing technology for the efficient conversion of natural gas into ethylene. In December, Solidia, which is developing technology for the utilisation of CO2 in the production of high quality construction materials, attracted a number of new heavyweight shareholders, such as Lafarge, a world leader in the production of construction materials, and Total Energy Ventures. This is a testament to the fact that we are nurturing industry champions who are in demand both in terms of the market and investors, and it is only a matter of a few years before these companies will be receiving valuations of billions of dollars.”

Bright Capital is an internationally-oriented Russian management company.

  • Ilya Balandin, iTech Capital“We would like to mention our $10 million investment in AviaSales in February. This deal won us ‘Deal of the year’ at the Venture Awards. We expect to increase the company’s growth through synergy with our other assets in the online marketing and ticketing sectors.”

iTech Capital is a major Russian PE & VC fund.

  • Ekaterina Sedinina, inMedia“For us the most important event of this year was the acquisition of INTECH. The company, which initially specialised in value-added services for network operators, is now becoming one of the leading developers of programming and hardware solutions in the innovation sectors, from the internet of things to mobile commerce and advertising.”

inMedia is a Russian private holding company targeting promising ideas in the field of internet technology, communication and advertising.

  • Alena Sokova, Promsvyazbank Venture Fund: “This year our venture fund financed 17 young entrepreneurs. We are proud that in spite of a deteriorating economic climate practically all of these projects are developing in accordance with their business plans. In fact, some of them are even outperforming their projected financial targets. I would like to give a special mention to the ‘Shokoladnitsa’, café franchise in Kursk, Velodrive in St Petersburg, and Begemot, in Ulan-Ude. In making decisions about investing in this or that project, our experts consider a number of factors, and the success of the business ideas we have financed is proof of our fund’s well-chosen strategy.”

The Promsvyazbank Venture Fund is a joint project of Promsvyazbank, a major Russian bank, and OPERA to support young entrepreneurs mainly from traditional sectors.

  • Vladislav Solodky, Life.SREDA“If we were to look back, then the year’s biggest success would clearly be the sale of American mobile bank Simple.com to Spanish finance group BBVA for $117 million. But we always look to the future, so our for me personally this year’s best outcome has been the rapid growth of LifePay, the important decision to turn down a number of offers for it, and its promising plans for 2015 to develop its product range and to break into a new market.”

Life.SREDA, the venture arm of Russian finance group Life, focuses on mobile and Internet fin tech projects.

  • Olga Turzhanskaya, Qiwi Venture: “This has been an extremely busy and interesting year for Qiwi Venture. The key events for us were the opening of our own accelerator and our series of ‘hackathons’. We weren’t immediately completely convinced about this entirely new way of working with our entrepreneurs, but now that we have seen the results, we can say without any doubt that we are delighted. Nine excellent projects received investment from us, and four of them are preparing for pilot launches. This has been Qiwi Venture’s biggest intake since the fund was created, so they main lesson we will take from 2014 is not to be afraid of taking a risk by doing something new.”

Launched in 2013, QIWI Venture is the corporate venture department of the QIWI group, a leading Russian payment operator.

  • Kirill Varlamov, FRII: The greatest outcome from this year for the FRII is our portfolio of more than 120 startups, as well as the results of research by Dow Jones demonstrating that we are Europe’s most active seed fund.

The Internet Initiatives Development Fund (IIDF, or FRII in Russian) is a $200 million government-backed fund launched last year to support Russian Internet startups.

  • Sergei Fradkov, iDeal Machine: A major landmark for us was agreeing a partnership deal with the FRII to hold joint acceleration sessions in St Petersburg. It was nice to receive recognition from the FRII of what our accelerator can offer its startups, and we hope that together we can nurture lots of successful companies in our region.”

Based in St. Petersburg, iDealMachine is an early stage venture fund and a mentorship-driven startup incubator.

  • Aleksey Kostrov, Moscow Seed Fund: “For us the year’s most important outcome was seeing the first returns from companies we had invested in. This is proof of the fact that the Moscow Seed Fund is working.”

Moscow Seed Fund is the venture arm of the Moscow city authorities.

  • Renat Batyrov, Skolkovo Foundation“The success of our bid to hold the 2016 IASP conference in Moscow has to be the stand out achievement of the year not just for Skolkovo, but for all of Russia. Representatives of the entire world of global innovation will meet in Moscow. It will be like the Olympics, or the World Cup, only for the innovation sector.”

Skolkovo is an international tech hub under completion on the outskirts of Moscow.

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Singapore

Singapore’s Infocomm Investments Brings Fund To Europe

Aiming to build a bridge between East and West — specifically, Singapore and London — the Singaporean state-funded VC Infocomm Investments is extending its $200 million fund to European tech startups, including investing in the London-based fintech accelerator run by Startupbootcamp. The idea is to help the European/London startups it invests in to access markets in Singapore and Asia as a whole, with the former having ambition plans to become a ‘Smart Nation’, creating a multitude of opportunities for tech startups home and abroad.

“Singapore is a great gateway to Asia and we believe Southeast Asia is the consumer market of the future,” Zach Tan, director of Infocomm Investments’ London office, tells TechCrunch. “Beyond growth capital, with our strong knowledge of Asian market opportunities, operations and culture, we are able to provide mentoring, networks and infrastructure to ease their process of setting up a business in Asia through Singapore.”

Tan also explains that the Infocomm Development Authority of Singapore (IDA), the fund’s parent organisation, is looking to build Singapore into a Smart Nation. “They are providing plenty of opportunities for tech startups to develop big ideas in areas such as urban density, healthcare, public safety and city planning, and we could help plug startups into these programmes,” he says.
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Abu Dhabi’s Gulf Capital $750 mln fund to invest in 10-12 firms

DUBAI, Oct 19 (Reuters) – Abu Dhabi-based buyout firm Gulf Capital is looking to invest in 10-12 companies over five years with the launch of its third private equity fund of $750 million, its chief executive said on Sunday. “We are making offers and talking to companies… we can move very quickly and close deals because we’ve raised the funds,” Karim El Solh said.

El Solh said the sectors the company is looking to invest in are power and water, oil and gas, healthcare and education as well as companies that will profit from government spending. Gulf Capital, with total assets of $3.3 billion, invests an average $60-75 million in each company and tends to buy partnerships that support rather than replace existing management.

Solh said 60 percent of the external investors in Gulf Capital’s new fund are from the United States, Europe and Asia and include sovereign wealth funds and pension funds.

Gulf Capital however, will be the anchor investor – it tends to be the largest investor in all of its funds at about 25-30 percent contribution.

As for its second private equity fund, the firm said 92 percent of $533 million had been invested and had generated a net internal rate of return of 25 percent as of June 30.

Private equity in the Middle East suffered a difficult time at the end of the last decade, as challenging global and domestic market conditions left some unable to exit investments without major losses.

The economic rebound both locally and internationally has revived deal making in the last two years, with many now divesting stakes and looking for new opportunities.

El Solh said Gulf Capital, which also has real estate development and credit units, may announce a revolving debt facility or tap the equity market to raise funds for its investments.

Sources told Reuters in July that Gulf Capital is looking to sell shares to the public.

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Life.SREDA launches new international fintech fund with $100 million target

East-West Digital News
Yesterday Life.SREDA, a Moscow-based venture fund focusing on mobile and online fintech startups, announced plans to launch a second, internationally oriented fund of $100 million.
Existing Life.SREDA backers have already provided one fifth of the target amount, or $20 million, for the new fund. Further fundraising talks are being held with several large banks and telecom operators, including Chinese, Hong Kong and Singaporean organizations.
Following the invest-abroad trend among Russian investors, Life.SREDA II will focus on US and European fintech projects with just around 10% of the funding allocated to Russian projects. The average check for each investment is expected to be in the range of $5-10 million.
It is assumed that the backers of Life.SREDA II will not only provide funding but will also contribute to the international development of its portfolio companies.

Life.SREDA was launched in September 2012 with an initial capital of $10 million as the venture arm of Life, a Russian financial group comprising sizable Russian banks. In two years, the fund has invested over $40 million into a number of fintech startups from Russia and other countries.

Life.SREDA’s first investment went to Instabank, a financial mobile startup. Then the fund invested $1.5 million in My-Apps.com, a Russian mobile apps builder for laymen; $2.6 million in Russian mobile acquiring startup Life-Pay in December 2012; and $2 million in Moven, a New York based money-management service, in August 2013. In December 2013, the fund also invested $730,000 in myWishBoard.com, a platform enabling online private fundraising by friends and families for fulfilling personal wishes.
Several other deals followed, including, this past summer, a $1.5 million capital injection in Advice Wallet, a Ukrainian startup which develops a mobile payment service called Settle.
Life.SREDA celebrated its first exit in March 2014, when Spanish bank BBVA acquired Simple, an innovative banking app operating on the US market, for no less than $117 million. Life.SREDA announced a 180% return on investment in this operation.
“By launching Life.SREDA II, we are aiming at large banks that want to transform themselves to keep up with the increasingly innovative technological marketplace. It is more profitable for them to acquire a fully baked fintech startup rather than create innovations on their own. We’re seeing a truly global opportunity in finfech, starting in the USA – as Simple proved – and then spreading throughout the world,” Life.SREDA Managing Partner Vladislav Solodkiy stated.
“As far as Asia is concerned, the level of retail bank services and their innovation in China, Singapore and Honk Kong can be compared with Russia; the banks require further technological and service development,” he added in a bid to attract Asian partners to the new fund.
Among the other investors on the Russian fintech scene are Ocean Bank and QIWI, two major payment operators that have launched their own corporate venture investment programs last year.
This story first appeared in East-West Digital News, a leading online resource on Russian digital industries.

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Europe’s Bauer Media Sets Up Fund To Invest $134M In Startups Over 10 Years

TechCrunch
It’s only a few weeks since Google Ventures announced it’s setting up shop in London as a hub for investing $100 million all over Europe. Now another big fund has been unboxed by local German media firm, Bauer Media. The new fund — €100 million or circa $134 million — will be invested in European digital businesses over the next ten years via a new VC arm, called Bauer Venture Partners (BVP).

BVP is not limiting itself to particular sizes or stages of investments but says only that its focus will be “highly scalable business models in Europe”. So startups then.

“We have a stage-agnostic approach without focusing on any specific phase like seed, early-stage or growth investments,” said Thomas Preuss, founder and Managing Partner of BVP, in a statement.

Asked which areas the fund will focus on he told TechCrunch it would be “mainly software”, adding: “We are open and fully return oriented… e.g. ad Tech, fintech, media, Health, SaaS, etc.”Read More

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Banking and Finance

Wipro sets up $100-mn VC fund to invest in start-ups

Business Standard July 28, 2014
Following the footsteps of some of its global peers, India’s third largest information technology (IT) services company, Wipro, has set up a venture capital (VC) fund that will look at investing in early-to-middle stage technology start-ups globally.

According to highly-placed sources in the know, the initiative is being driven by Chief Strategy Officer Rishad Premji, also the elder son of Wipro chairman Azim Premji. The company has set aside an initial corpus of $100 million (around Rs 600 crore) for the fund which has started exploring investment opportunities in start-up companies which focus on niche technologies such as data, open source and industrial internet, among others.

“Wipro has been looking to engage with startups and this fund would help the company further this cause,” it said. A source said, “Rishad Premji is taking care of the entire activity on a day-to-day basis.”
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London Eye

Google Ventures Opens London Office As A Base For Investing $100M Across Europe

Earlier this month rumours emerged that Google was planning to open a branch of its venture capital investment arm in London. Well, as they say, there’s no smoke without fire: Mountain View has now confirmed that Google Ventures has launched a London division, with an initial fund of $100 million to invest in “the best ideas from the best European entrepreneurs.”

“We believe Europe’s startup scene has enormous potential,” wrote Bill Maris, managing partner of Google Ventures, in a Google blog post. “We’ve seen compelling new companies emerge from places like London, Paris, Berlin, the Nordic region and beyond – SoundCloud, Spotify, Supercell and many others.”

According to the FT, Google’s go-to media outlet in London, the new European branch of Google Ventures will have five general partners, reporting to Maris — namely: Eze Vidra, who set up Google Campus in London; serial entrepreneur Tom Hulme; UK angel investor and adviser Peter Read; Avid Larizadeh, the head of the UK arm of code.org and co-founder of Bottica.com; and former TechCrunch staff writer turned venture capitalist MG Siegler.
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Moscow-based Runa Capital to invest up to $200 million in European startups

East-West Digital News July 4, 2014
Runa Capital, a Moscow-based global tech-focused venture capital firm, announced yesterday the first closing of its new fund, Runa Capital II. With a target size of $200 million, the firm will continue investing in tech-based companies worldwide, focusing especially on Europe. The amount of the first closing has not been disclosed.
Investors at this first closing come from across Europe, Russia and the USA, with large commitments from investors in the previous Runa Capital fund.
While the segment focus of Runa II will be similar to that of Runa I – including cloud computing, hosted services, virtualization, mobile applications and IT-solutions for education, healthcare, social and fintech – the geographical focus is shifting to invest more in Central, Eastern and Western European regions. Investments in Turkey, Israel and other areas of the world are not ruled out, though.
Launched in 2010 by Sergei Beloussov, Ilya Zybarev and Dmitry Chikhachev, Runa Capital I initially focused on Russia. The fund progressively expanded its scope to investing globally, following a strong invest-abroad trend among Russian financiers. Over the past few years Runa, which amassed $135 million in committed capital, has invested significantly in Californian and Western European startups.
The fund has had three exits so far, starting in 2012 with the acquisition of its UK portfolio company Thinkgrid by ColtTelecom. In 2014, USA’s StopTheHacker was acquired by CloudFlare, and French startup Capptain was acquired by Microsoft.
Runa also had its failures, such as Travelmenu, a Russo-Ukrainian startup which shut down its service last year in spite of capital injections from Runa and other investors.
Among its other portfolio companies are NGINX, Jelastic, Ecwid, Zopa, Acumatica, Mambu, Wallarm, and drchrono.
This story first appeared in East-West Digital News, a leading online resource on Russian digital industries.

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Information Tech

DST launches 4th international tech fund

East-West Digital News July, 1, 2014
DST Global, which is controlled by Russian billionaire Yuri Milner, has launched its fourth investment fund — DST Global IV. The news was reported last week by Russian business daily Vedomosti based on documents posted on the website of the U.S. Securities and Exchange Commission. The fund was registered in the Cayman Islands. Its volume has not been disclosed.
Since the launch of its first fund in 2005, DST has been the largest Internet-oriented investment fund with Russian backers. In September 2010, DST rebranded itself, giving its operational wing the name Mail.ru Group and calling its investment fund DST Global. Mail.ru Group, which included a host of Russian-language sites as well as a fraction of DST’s stakes in international sites, began trading on the London Stock Exchange in late 2010.
Meanwhile, DST Global I acquired stakes in a number of leading international Internet companies, from Facebook, to Zynga, to Groupon, to ICQ.
A new fund, DST Global II, was launched in 2011, having raised about $1 billion, followed by DST Global III in 2012.
The DST Global funds continued investing in leading international Internet companies, including Airbnb, SpotifyTwitter, Zalando as well as in German incubator Rocket Internet and Chinese e-commerce giants Alibaba and 360buy.com. Recently, the fund led a $210 million funding deal with Indian e-commerce leader Flipkart.
Russian oligarch Alisher Usmanov was the largest shareholder in the first of its funds. Forbes estimates that about 75% of its funds come from him, and Russian investors hold about 80% of it altogether. The share of Russian investors (Usmanov, Milner and their partners) in DST Global II is markedly smaller, totaling about 20%, Vedomosti noted. The remainder belongs to Western and Asian investment companies. There is only one Russian investor – Milner – in DST Global III. The shareholders in DST Global IV have not been disclosed.
This story first appeared in East-West Digital News, a leading online resource on Russian digital industries.

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