- New fund targeting institutional capital builds on the strength of the UK’s world leading research and universities
- The fund is backing technology essential for a sustainable planet and supporting levelling up ambitions
Octopus Investments (Octopus), part of the Octopus Group, an investment company for investors who believe their money can be a force for good, has today announced it has launched a Pre-Seed Deep Tech Fund (‘the fund’). The UK-domiciled fund is targeting a fundraise of £40m.
The fund is designed to give the most promising deep tech founders the capital and skills they need to take breakthrough technologies to market. The fund will act as a lead investor, supporting deep tech hardware and software with capital and effective customer discovery.
Specifically, the fund will invest in technology emerging from the UK and Europe’s most forward-looking research centres and university hubs that is essential for establishing a sustainable planet. These technologies include the likes of quantum solutions, photonics and electronics, advanced materials, robotics, agtech, and artificial intelligence. Without investment, global challenges, such as climate change, resource scarcity and the need for energy security, will remain unresolved.
The fund provides an opportunity for global institutional investors looking to back some of the most exciting businesses on the journey to building a sustainable planet. The fund is looking to raise capital from a range of national and international institutional investors, including family offices, that can see the enabling power of deep tech; corporates, that are looking to invest early in the sector to gain competitive advantage in the long-term; and local government pension schemes, that are looking to grow their local economies.
Zoe Reich and Rubina Singh are the General Partners for the fund. Octopus Investments, through its Octopus Ventures team, is one of the largest and most active venture capital investors across the UK and Europe and has been backing UK deep tech businesses for more than a decade. The team has invested in some of the region’s most successful deep tech businesses, from UltraSoc, which was sold to Siemens, to WaveOptics, Europe’s largest deep tech hardware exit when it was sold to Snap.
The team supporting Zoe and Rubina is made up of former researchers and founders, such as Venture Partner Richard Anson. The team have both operational and investment experience of effectively supporting deep tech hardware and software through efficient customer discovery, portfolio talent support, and resource and role distribution.
Zoe Reich commented:
“Building a sustainable planet will require much greater investment in atoms and less investment in bytes. Only the combination of hardware and software innovation will tackle this global challenge. We see a real opportunity in the market to be the go-to lead investor for deep tech hardware.
“We’re excited to be launching a fund that tackles one of the greatest challenges of deep tech commercialisation – customer discovery – and underwrite the technology validation pathway, while providing founders with meaningful capital to hit value inflection points.”
Rubina Singh commented:
“We are in the midst of multiple global crises, with climate change being one of the biggest challenges of our generation. We believe that the companies we are investing in, and the innovation they are bringing, are what is needed to create the next paradigm shift in how we tackle these challenges. Greater innovation requires greater diversity of thought, and we are passionate about supporting diverse teams working on novel technologies. For a recent customer discovery programme we ran for deep tech start-ups, nearly 50% of the applications we received were from teams with a female founding member and more than 60% had a founding member from an ethnic minority background. Our ambition with this fund is to tackle both the funding gap faced by deep tech businesses and support diverse founders to create a truly inclusive net-zero future.”
Jennifer Ockwell, Head of Institutional, commented:
“Our fund is investing in novel, protectable technologies at the most critical time, to spur them into commercialisation, and to enable wide-scale adoption. Investing at this point in a company’s life cycle is also the most capital efficient time, so there is a compelling investment opportunity.
“The investors we’ve spoken to so far have been attracted by the levelling up opportunity this fund presents. Our universities represent centres of excellence and innovation right across the UK. By investing in the research and innovation coming out of these centres, we can ensure that they become engine rooms of levelling up – maximising the regional potential across the country. With our fund and the team’s expertise, we can provide support to get these exciting companies to their next stage of growth, stimulating regional economies while addressing pressing socio-environmental challenges.”
For journalists in their professional capacity only. Issued by Octopus Group June 2023