IQ Capital lines up next fundraise

Greg Gille
06 September 2021

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UK-based early-stage venture investor IQ Capital is preparing the launch of its fourth flagship vehicle, IQ Capital IV.

IQ Capital filed a registration document for the vehicle with Luxembourg's Registre de Commerce et des Sociétés in early September; the fund was incorporated in mid-August.

The firm is currently setting up the legal structures for the fund and is expecting to launch within the next few weeks, according to a source close to the situation.

IQ Capital declined to comment when contacted by Unquote.

The fund's predecessor, IQ Capital III, held a USD 175m final close in July 2019 against its USD 130m target. The fund originally had a USD 150m hard-cap, but as the fund was oversubscribed, the firm decided to take in more capital to reach USD 175m, according to Unquote coverage at the time. The third vehicle has backed 30 companies to date.

Prior to IQ Capital III, the VC raised GBP 42m in 2014 for its second flagship fund. The vehicle raised GBP 25m from the British Business Bank and a further GBP 17m from private investors, according to Unquote Data. This fund went on to back 22 companies.

IQ Capital IV will continue its strategy of focusing on early-stage funding for UK "deep-tech" companies, meaning companies that are based on substantial scientific advances and high-tech engineering innovation. This includes startups operating in the AI, data science and Internet-of-Things sectors, among others.

The firm is UK-focused in its investments, but IQ Capital III had the scope to invest in European entities where necessary.

The VC is likely to aim for a larger target compared to its predecessor in order to scale up its support for UK deep-tech businesses and meet increased demand from more institutional investors eager to gain exposure to that space, a source said.

IQ Capital has had a busy first half of 2021, deploying GBP 28m across a number of investments. Most recently, the firm took part in a GBP 6.2m round for NanoSyrinx, a biotech company developing a new cell engineering tool for novel targeted therapeutic modalities. It also co-led a USD 3m round for secure communication platform Worldr.