Irish-founded Sure Valley Ventures has made the first close on a £95 million (€113 million) UK-focused software technology venture capital fund.
Speaking to The Irish Times, managing partner Barry Downes said Sure Valley, a big backer of local early-stage companies such as Volograms, GetVisibility, CameraMatics and War Ducks, was also in talks to establish a new fund locally.
Sure Valley, founded by Mr Downes and Brian Kinane, has already secured £85 million in investment for its new UK fund. Some £50 million of this has come from the state-backed British Business Bank via its Enterprise Capital Funds programme.
The VC plans to invest into 25 software companies over the lifetime of the fund across metaverse and immersive technologies, software security and artificial intelligence. It typically invests in the £750,000-£1.5 million range, often bringing in co-investors to complete investment packages of £1 million-£3 million.
Sure Valley has had some notable successes, including backing Irish company Artomatix, which was acquired in a $60 million deal by gaming studio Unity Technologies in early 2020. Overall, 93 per cent of investee companies have gone on to raise follow-on series A or B rounds within 24 months of the initial seed investment by the VC.
While Sure Valley will not be investing in companies in the Republic through the new fund, it is targeting companies in Northern Ireland. Its first investment, to be revealed shortly, is a Belfast-based start-up. Moreover, Mr Downes confirmed plans were afoot to establish a new fund focused on indigenous companies before the end of the year.
Sure Valley, listed in London and with financial backing from Shard Capital, was established by Mr Downes and Mr Kinane in 2016. The pair previously founded Feed Henry, a software company with its headquarters in Waterford acquired by Red Hat for more than €60 million. More recently, the founders have enjoyed success with Pluto Digital, a crypto technology and venture company that was last month acquired by NFT Investments via a £96 million reverse takeover.
Mr Downes said Sure Valley intended to open a new office in Manchester as it targeted start-ups based in the north of England, as well as in Scotland and Northern Ireland.
“We’ve always been passionate about investing in Irish companies but also saw an opportunity to expand on this, our presence in the UK. We have a good partnership there with Shard Capital, which gives us good knowledge of the market there, and have also previously made some investments, particularly in Northern England, so we know the scene well,” he said.
“Things are really exciting now in terms of developments in the metaverse, in crypto and in game technology in particular, which are all areas in which we’ve invested and plan to do more. I’m really thrilled about the possibility of executing on new deals and backing more businesses to scale,” Mr Downes added.
Also commenting on the new fund, UK minister for investment Gerry Grimstone welcomed its focus on the north of England.
“The AI and immersive tech sectors are major British success stories, and investments like this one by Sure Valley Ventures ensures that early stage companies in the northern regions can access the funding necessary to help them compete at the forefront of global innovation,” he said.