Pentech has announced the closing of Pentech Fund III at an oversubscribed £88 million, exceeding the original target fund size of £70 million. The new fund, double the size of Pentech’s previous fund, will invest in early stage software companies across the UK.
Pentech, which has offices in Edinburgh and London, invests at series A and pre-series A. The Pentech team have a strong track record of working closely with founders to support them building and developing their businesses. Pentech’s main area of interest is discovering where new disruptive technologies, such as Artificial Intelligence, Machine Learning, Big Data and Infrastructure such as Blockchain and Microservices, can create category leading software companies in large industries, such as FinTech, health and wellness, and enterprise transformation.
Pentech has led investments in over 20 software companies, typically as the first institutional investor. The approach of providing both capital and support has helped FanDuel become the category leader in fantasy sports; Nutmeg to develop the leading wealth management platform in Europe; Outplay to create a leading mobile game development studio; and enabled Maxymiser to flourish from a UK focused business to an international success story with headquarters in New York before being acquired by Oracle. Other examples of successful outcomes include the sales of Acunu and Semetric to Apple and Struq to Quantcast. In each case, Pentech is proud to have worked with the founders and their management teams to help them achieve their ambitions.
Fund III investors include the British Business Bank – which is making a significant contribution under its Enterprise Capital Funds (ECF) programme – and existing Pentech investors, together with new European family office investors and UK pension and endowment funds.
Pentech plans to construct a portfolio of around 20 companies over the next five years out of its new fund.
Eddie Anderson, General Partner, Pentech, said: “We are passionate about working with entrepreneurial founders and teams to help them build category leading businesses. We love to work with founders who have a combination of global ambition, complete dedication to their mission and a true grasp of the realities of how to build businesses in a capital efficient manner. Working with software companies at an early stage is our sole focus, directly supporting teams in each aspect of their business. We are excited to continue our journey and are grateful to the existing and new investors who have supported us.”
Nick Hungerford, Founder of Nutmeg, said: “Pentech is a rare breed of VC, no fuss, no credit required; just all action and steady support. Every start-up has ups and downs and the Pentech team’s unwavering encouragement, clear direction and, most importantly, faith in the entrepreneurs they back is empowering, enabling and clear for all to see. Pentech is most definitely “smart money”, the teams they champion tend to grow into successes, and that they are involved is no coincidence.”
Keith Morgan, CEO, British Business Bank, said: “The new Pentech Fund III will provide welcome new equity funding to early stage software companies in the UK. Helping innovative businesses like these to scale up is important for the continued development of the UK tech sector and we are therefore pleased to be supporting Fund III as part of our ECF programme, which now has a total investment capacity of £950m.”
Pentech is a leading UK VC investor, having been actively investing in early stage software companies since 2001. Its latest fund, Pentech Fund III, was launched in May 2017 and will invest in early stage software companies throughout the UK. The Pentech partners have gained considerable experience in founding, developing and exiting software businesses, both in Europe and in the US. Pentech utilises the experience of its team to identify early stage software opportunities with global potential, and to work with these companies to prove the value of their offering, and then grow them into market leadership positions. Pentech is authorised and regulated by the Financial Conduct Authority. For further information, see www.pentechvc.com.