German venture capital manager PolyTechnos Venture Partners has held a final close of its second fund targeting investment in information technology, communications and life sciences on E130m.
PolyTechnos Venture Fund II has received commitments from a diverse range of blue chip investors, including Access Capital Partners, Bank of America Equity Partners, Commonfund, Eastman Chemical Company, Knight Foundation, University of Notre Dame, Vanderbilt University, Wilshire Associates Europe, two Asian government investment units, Kreditanstalt fuer Wiederaufbau and the European Investment Fund, which said that it committed E18m to the fund.
“We decided to close the fund in line with current market conditions,” states Dirk Kanngiesser, founder and managing partner of PolyTechnos, “despite the fact that some investors continued to show strong interest in investing with us.”
“Now, especially given the economic situation, the time is right to invest in promising technology companies. The market offers great opportunities to invest as valuations have been reduced significantly and there is less capital available from professional VCs. In addition, although there are clearly fewer company foundations, the overall quality has increased,” added Dirk Lupberger, managing partner at PolyTechnos.
As a result of the drop in company valuations across the technology market, the firm has lowered its maximum investment from E10m to E7.5m. “The fund will be invested across the European Union, with a specific focus on German-speaking countries,” added a PolyTechnos spokesperson.
To date, PolyTechnos has completed 23 investments, including four from PTVF II, including them Plastic Logic, a developer of plastic electronics technology, and Jerini, a German drug discovery company. PTVF II will invest in early-stage technology companies in IT and communications, materials, energy, and life sciences.
German venture capital firms have had mixed fortunes in raising capital over the past year. Techno Venture Management closed its fifth fund 50 per cent below target at E128m in October. Deutsche Beteiligungs held a first close on E120m in October, saying it was ‘very confident’ of reaching the fund’s E250m target.