Irish venture capital company, ACT Venture Captial has raised €170m that it plans to invest in Irish technology companies over the next three to five years. The amount invested per company will range between €3m to €15m and ACT said it is looking for indigenous Irish companies with strong technologies aimed at international markets.
Niall Carroll, managing director of ACT, said: "Ireland is being increasingly recognised as one of Europe's most successful high technology cluster locations and we are naturally pleased to have had our performance and investment strategy endorsed by leading domestic and international investment institutions."
The company, formed in 1994 by former management at AIB's venture capital subsidiary Allied Combined Trust, is already an investor in companies including software house Am-Beo, chip designer Massana and laser communications company Eblana. During 2002, the company invested €25m in new companies and as follow-on investments in existing portfolio companies.
"Since 2000 the technology sector world-wide has been experiencing a sharp reduction in demand and it is taking longer for companies to build revenues in the global market place. To succeed internationally early-stage companies need access to relevant experience and connections and require larger amounts of capital to fund their growth to the stage that they become financially self-funding," said Carroll.
"As with public companies, valuations of private companies have declined as a reflection of the downturn in world economic growth, political uncertainty and of general investment conditions. Nevertheless, companies with innovative technologies addressing real market needs will be able to raise the necessary venture capital to realise their potential."
ACT usually invests in follow-on rounds if further funding is needed for expansion and this is provided in syndication with overseas venture capital funds from either the US, Europe or the UK depending on the market focus of the start-up, according to the company. During the last three years, over €150m has been invested by overseas investors in companies that were initially funded by ACT.
"Ireland needs more international successes in the technology sector and we are particularly pleased to have attracted the support of prestigious overseas investors, who are expected to contribute significantly to our strategy for the international development of companies backed by the Fund," said Carroll.
The Fund's Irish investors include Bank of Ireland Asset Management, KBC Asset Management, AIB Group Irish Pension Scheme and Eircom Superannuation Fund. It's international investors include JP Morgan Fleming and Merrill Lynch from the U.S., Partners Group from Switzerland, Access Capital Partners from France, Extorel and VCM from Germany, and the European Investment Fund from Luxembourg.