Cambridge Gateway Fund, advised by NW Brown Capital Partners, has secured GBP32 million in its final close. This total falls short of the GBP50 million target. GBP13 million was reached by the first close in March 2000.
This first-time fund is looking for early stage opportunities based in and around Cambridge, a region accepted as a major European technology hotspot. The fund will make first and second round investments of GBP750,000 to GBP3 million in companies with global potential and protected core technology. Cambridge Gateway expects to lead or co-lead ten investments in ICT companies and five in the life science sector.
Alan Barrell, managing partner of the fund, believes Cambridge Gateway will fill a funding niche left by companies such as Amadeus, a Cambridge-based firm which has raised a second fund of approximately GBP250 million. He believes that these VCs are now looking to take bigger bites, investing more and leaving a gap in the early stage funding market. However, funds like Amadeus have said the increased size of their funds will, in the main, serve to enable them to take part in future funding rounds of existing portfolio companies and not suffer dilution.
Cambridge Gateway’s main investor is the European Investment Fund. Other investors include Investco, Dunedin Capital, West Midlands Metropolitan Pension Fund, Cambridge County Council, six Cambridge colleges, two US banks and the National Science & Technology Board of Singapore. High net worth individuals and families have also contributed, along with an unnamed Asian corporation.
To date the fund has made five investments. The first of these, announced in July 2000, was a GBP1.5 million investment in fabless chip company Cyan Technology Limited, made in collaboration with another Cambridge-based fund ETCapital.
Cambridge Gateway’s portfolio also contains active RF (develops locational technology), Intercytex (tissue engineering) and Antenova Ltd (develops antennas for mobile phones). The name of the fifth investee company, a corporate spinout, will be revealed shortly.
The fund anticipates that it will receive strong deal flow through its advisor and sponsor, NW Brown Capital Partners. The NW Brown Group provides financial services to companies and also manages the Great Eastern Investment Forum, a business angel network.