Third start-up fund from Eficor

Eficor Ventures, the venture capital subsidiary of Finnish technology-focused investment bank Eficor, has launched its third fund. Eficor Venture Fund III is the first fund to be raised by the investor since Eficor merged with Holtron Group in January last year.

The new fund will invest in Finnish seed and start-up companies in the wireless, enterprise software and mobile, Internet and TV convergence technologies. The first closing of this fund, at around e20 million, is expected in early 2002. The fund, which has a target of e30 million, will be marketed in Scandinavia. Eficor will make a minority investment and previous Holtron investors have already implied they will also invest in this vehicle.

Holtron, a Finnish venture capital and ICT consulting company, formed the core of Eficor’s venture capital and business development consulting activities. Established in 1994, Holtron provided consulting services to technology-based companies and began its investment activities in 1999. Holtron’s funds and investments are now managed by Eficor Ventures, which is headed by the founder of Holtron, Tom Henriksson. Eficor Ventures also manages six investments, totaling FIM1.3 million, made by Eficor plc from its own balance sheet prior to the merger.

Holtron raised two funds, Holtron Capital Partners 1 Ky in 1999 (raised from Holtron partners and their families) and Holtron Capital Fund 1Ky in 2000 (investors included investment banks Conventum plc and Ice Capital Securities, and the shareholders of Eficor). Of the e10 million total raised, the company’s partners committed 20 per cent to 25 per cent. Both funds invested capital of e0.5 million to e1 million in Finnish information, communication and technology start-ups. The average size of commitments from the new fund will be larger than this, around e1.5 million, and it will also have the capacity to make follow-on investments.

In October, Holtron Capital Fund 1Ky completed two new investments in MySQL, an Swedish open-source database company and Printeurope, which develops collaboration software for the printing industry. Henriksson expects this fund has a further two to three investments to make before it is fully committed.