UK venture capital investor MTI has raised £104m in the third and final closing of its fourth fund, MTI4. The original target for the fund was £50m-£75m.
Commitments have mainly come from UK institutions and pension funds. MTI4 is the first venture capital fund to receive sponsorship from the government backed UK Technology Fund, which was launched last year to encourage UK institutions to invest in early-stage technology companies. 17 per cent of commitments have come from US funds of funds. A significant number of investors in earlier MTI funds have returned. Investments will typically be up to £5m, although larger amounts will be considered.
Dr. Paul Castle, chief executive and founder of MTI, said: “Since MTI was founded in 1983 it has demonstrated a consistent track record of successful investments and best of breed returns to investors. With many venture capitalists looking to raise funds to invest in technology, and with technology stocks remaining out of favour with investors, there is no doubt that MTI's long and prestigious track record has assisted us in this latest successful fund raising.”
The fund will focus on UK-based, start-up and early-stage technology businesses in: software and communications (including internet enabling technologies), materials technology and life sciences, and industrial products. MTI4 has already invested £20m in nine deals.
MTI3 is fully invested in a portfolio of 17 companies. It has an IRR of over 58 per cent per annum as at 31 December 2000. Successful exits include the IPO of Dataflex in March 2000, and the acquisitions of Taxi Interactive by Affinity Internet Holdings plc and of VegaStream by Pace Micro Technology plc.
MTI was founded in 1983 and has invested in more than 45 early-stage and start-up technology business throughout the UK. It does not invest in dotcoms or e-commerce businesses.