Pentech Ventures, the Glasgow-based early stage fund focused on software investments in the UK has closed above target at GBP22.5 million, following a final commitment from the European Investment Fund of over GBP5 million.
Pentech was launched at a time when many investors were taking a step back from investing in early stage software companies. Founder Eddie Anderson said: “I’m delighted that EIF has invested in Pentech Ventures. The fund raising climate is extremely difficult, and so to exceed our fund raising target, with an investor of this quality, demonstrates that we have a strong business model, and the team in place to carry it forward.”
Pentech Ventures was launched in July 2001 with an original target of between GBP15 million and GBP20 million. Around GBP12 million in commitments comes from Penta Capital, the fund’s manager. Penta Capital was formed in late 1999 and in April 2001 closed its first fund with commitments totalling GBP130 million. The fund has a focus on UK and Irish mid-market companies.
Pentech is investing between GBP250,000 and GBP1 million in early stage technology companies that have created strong intellectual property with high software content. The focus will be on voice, infrastructure, telecoms, development tools, publishing and software solutions and financial analysis tools.
Pentech’s investment process uses an advisory group of five technology entrepreneurs based both in the UK and the US with experience of building start-up technology ventures through to IPO or trade sale. To date, Pentech has completed four investments totalling GBP4.5 million in Applied Generics, an Edinburgh-based mobile location company; Rhetorical Systems, the Edinburgh University spin-out text-to-speech firm; Automsoft, a Dublin-based provider of advanced database solutions to process industries and Aircraft Management Technologies, an aviation industry software provider, also based in Dublin.
Eddie Anderson said of investment opportunities: “Our deal flow is exceptionally strong and the outlook for the fund is very encouraging.”