A new fund, called Innovation Industries, launched last week, might be a boon for hightech companies. The fund of 75 million euros will be used to invest in around 20 promising hightech startups over a period of 10 years. The round was led by the pension fund PME and the European Investment Fund (EIF). PME invested 25 million euros in the fund.
Innovation Industries aims to accelerate the capitalisation of the world-class education and research done at the Dutch technological universities, the research organisations TNO and ECN and to help already established hightech companies scale faster. “Innovation Industries is a specialist fund interested in companies that are developing commercially promising products and technologies in attractive technology fields”, says Harm de Vries, General Partner at the fund to StartupJuncture. Adding: “Attractive technology fields are nano/microtechnologies, semiconductors & integrated photonics, ICT and (cyber) security, clean technology, food and agriculture technology and medical technology (medical devices and diagnostics).”
Joining Forces
Not surprisingly these are fields of study where the Dutch universities of technology and Wageningen University are among the best in the world. However, though there is some cooperation between the universities, there hasn’t been much coordination on the investment side.
Up until now most universities have their own investment arm and way working. The idea behind joining forces under de umbrella of Innovation Industries is to coordinate efforts better, enable the cross fertilisation of ideas and opportunities. And creating the financial bandwidth to be able to double down on scaling promising startups. Therefore the universities Eindhoven University of Technology, University Twente, Wageningen University and TNO also participated in this round of investment.
Innovation Industries doesn’t invest in any particular stage. It ‘typically’ invests €1-5 million in a single portfolio company, but can provide follow-on funding of up to € 10 million per company. In addition, the fund can invest in very early stage companies with initial investments typically in the range of €100-250k. De Vries: “We focus primarily on start-ups, but will also be able to invest into scale-ups. With this relatively broad spectrum of funding capabilities I think we will be able to optimise the chances of success of emerging breakthroughs in research and technology and ultimately provide returns to the fund’s investors.”
45 billion euros
Other investors in the fund are ECN and the regional development organisations and funds PPM Oost, Topfonds Gelderland and Innovatiefonds Overijsel and number of Twente-based informal investors.
The management team of Innovation Industries comprises besides De Vries investment veterans Nard Sintenie, Tom Schwarz and Chris Sonnenberg. De Vries previously served as a General Partner and Erasmus University biomedical fund and is currently also a General Manager at the Twente Technology Fund. Tom Schwarz was previously CEO of the biotech/clinical research contract organisation U-Gene Research. And Chris Sonnenberg hails from Parcom Capital.
The participation of technology sector pension fund PME fits in the trend that Dutch pension funds that previously were solely focused on returns now also invest in the Dutch economy. Last year one of the largest pension funds in the world, ABP, poured in an additional 300 million euros in Inkef Capital, making it the largest VC fund in the Netherlands with 500 million in assets under management.
PME is the sixth largest pension fund in the Netherlands. It manages the pension of 625.000 employees in the technology sector and has 45 billion euros under management. Eric Uijen, the chief executive of the fund says investing in emerging technologies actually means that the fund is investing in it’s own sector. “The fund is a boon because it enables us to use the world-class knowledge and technology created in our industry to combat the challenges of our time.”
Photo Credit: NASA