Cambridge Innovation Capital raises £50m

The investor aims to commit its initial capital over a period of two to three years. The ultimate intention is to raise further capital through an IPO, CIC non-executive chairman Edward Benthall told unquote".

Investments will help companies bridge the middle stage of commercial development, evading the so-called "valley of death". "The angel community is thriving in Cambridge," Benthall said. "There are lots of repeat entrepreneurs who return to back start-ups. But the venture capital fund market is not going so well. We couldn't rely on the VC market to provide follow-on funding."

CIC opted for an evergreen fund in order to provide more long-term support to portfolio companies. Speaking of the pitfalls of a traditional fund structure, Benthall told unquote": "The VC industry has struggled to get high returns, which has made LPs reluctant to commit. Cambridge companies traditionally take a long time to grow, as they are based on disruptive technology and deep science. We felt we needed a business capable of investing over the long-term."

Investors
Cornerstone investors are Invesco Perpetual and Landsdowne Partners. Further commitments came from the University of Cambridge Endowment Fund, ARM Holdings and IP Group, which has an 8% stake in the vehicle.

IP Group will share investment and co-investment opportunities with CIC.

Investments
CIC will back companies based in the Cambridge Cluster across a wide range of technologies and development stages.

"It will be around £3-5m per investment, but we will do some much smaller deals too. We won't just commit to early-stage, some portfolio companies will be far more mature than post-seed," Benthall said. "And there will be co-investment opportunities. Several investors in the fund have expressed an interest in co-investing with CIC."

People
CIC's management team is led by executive and investor Peter Keen. The board is led by non-executive chairman Edward Benthall, a former partner at Charterhouse Capital Partners.

Advisers
Barclays Bank, Numis and Taylor Wessing provided advice on the launch of CIC.

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