Celtic House Venture Partners, the seed investor based in Canada and the UK, has raised an additional $80 million for Celtic House Fund II. This is the first time since the firm was established in 1994 that it has raised money from institutional investors. Until now just one investor, entrepreneur Sir Terence Matthews, has funded Celtic House.
The firm’s second fund, which reportedly had an original total of around $250 million in 2000, has made 22 investments including five in the UK and one in Sweden.
Roger Maggs, the founding partner and now one of two European partners, said: “The extra money will be used to make a very small number of new investments but mainly to protect the investments we’ve already made in the current difficult market.” The fund’s UK portfolio companies include Synad Technologies, BlazePhotonics, Cavendish Kinetics, Nexagent and BlueArc, which has now moved to California.
The firm makes early stage investments in high tech companies based in Europe and North America but it relies on larger funds to invest in the follow-on rounds of its portfolio companies. Although the $80 million in new capital will continue Celtic House’s commitment to its existing investments the firm will not be leaving the seed funding market. Fund II’s portfolio needs extra capital before it will be able to demonstrate the success enjoyed by its predecessor.
Maggs said if the company was to grow it needed additional LPs. The investors in this fund raising include the CPP Investment Board, the Ontario Municipal Employee Retirement System, the Teachers’ Merchant Bank, the private equity arm of the Ontario Teachers’ Pension Plan Board and an unnamed US institution, as well as Terry Matthews. When Celtic House comes to raise its third fund Maggs hopes these investors will contribute a substantial share, although he’d like to broaden the group to include European investors.