Family fund nets '9m from UK government bank for European tech investments
Family-backed fund Frog Capital has attracted €9 million ($10.1 million) from British Business Bank Investments as it looks to invest in more high-growth technology businesses.
Several families are among the 14 investors in Frog Capital II, a €90 million fund run by London-based Frog Capital that has already invested in two digital businesses.
Frog Capital II followed on from Frog Capital I, formed to manage investments of the German-Spanish Engelhorn family, whose multibillion euro fortune was made in the pharmaceutical industry. The first fund has already had three successful exits.
British Business Bank Investments, the commercial arm of British Business Bank, has put £71 million ($103 million) into eight venture capital funds through its VC Catalyst Fund.
British Business Bank is 100% owned by the UK government, but independently managed, and provides finance to smaller UK businesses via a network of 80 partners.
Mike Reid, Frog Capital's managing partner, said a mix of European families and international families have invested in Frog Capital II.
“The common theme is they're all interested in being involved in innovative, growing companies,” he said.
“Innovation and technology is something at the heart of a lot of these families; it's how they built their own companies.
“They don't want to do extreme start-up stuff. They really like the idea of catching hold of the ones coming through.”
Companies at this stage offer “a slightly higher price for a lot lower risk”, he added. The European tech sector is said to offer good growth opportunities, but has suffered from shortfall in capital.
For families looking to invest, Frog Capital II represented an alternative to “doing it themselves or putting their money into a larger firm where they're just a rounding error”, said Reid.
The two investments Frog Capital II has made so far are in digital marketing and data firm Skimlinks and digital money remittance business Azimo, which Reid said was “really disrupting” its sector in Europe.
The fund is likely to make investments in eight to 10 firms in total based in the UK, Germany, the Nordic countries, or the Benelux states.
Individual investments are for up to €20 million.
