ACT Venture Capital announced that it has established a new seed fund, AIB Start-up Accelerator Fund 2. The Fund is backed by Enterprise Ireland and ACT’s main expansion fund which includes investment from AIB and other private investors. The investments made by the new Fund will focus on developing high-growth, export-oriented companies in sectors such as Software, Internet, Digital Media, Communications and Mobile.
The Fund is a successor to the ACT managed AIB Start-up Accelerator Fund 1 which backed 39 companies over the past five years and has already had a number of successful exits including the sale of Storyful to Newscorp, FeedHenry to Red Hat, Embo to Baird, Trustev to TransUnion and Soundwave to Spotify.
The objective of the fund is to assist promising early stage companies getting ready for scaling. Examples from Fund 1 include Cubic, Swrve, Endeco and Silvercloud, which together with other portfolio companies have collectively raised over €140m of expansion capital.
The new fund aims to back 25 new companies over the next four years and will invest up to €1m into each company. ACT can further invest up to €7m from its main fund into successful companies which require further expansion capital and specialises in syndication with international investors for larger amounts having completed over 50 such deals.
John Flynn, Managing Director of ACT Venture Capital, said “This fund will help to sustain Ireland as one of Europe’s most active locations for seed funding and will create a strong pipeline of expansion companies and funding opportunities over the coming years”. Mr Flynn added that “ACT is particularly keen to partner with entrepreneurs where we can exploit our international network to help them expand”.
Making the announcement today, the Minister for Jobs, Enterprise and Innovation Mary Mitchell O’Connor TD said:
“The Government’s Action Plan for Jobs 2017 targets sectors in which Irish companies have the capacity to break into export markets, grow quickly, and create jobs. Ireland has a long track record of success in attracting multinational companies, and is now actively seeking to replicate that success in entrepreneurial companies grown in Ireland. Today’s announcement confirms that this approach is bearing fruit. My aim is that, with the right Government policies in place, companies like these can succeed, grow, and continue to create a large number of jobs.”
Welcoming the announcement, Walter Hobbs, Executive Director, Investment and Finance, Enterprise Ireland said, “A key role of Enterprise Ireland is to support early stage companies to start, innovate and scale their business in international markets. Creating a funding ecosystem for start-ups to thrive is of critical importance to the success of our client companies and as part of this mandate we recognise the value of venture capital funding to support high potential growth companies in the ICT sector. We are delighted to support ACT to drive the growth of this key sector in global markets.”
Mr Ray Fitzpatrick, Head of Equity Investments at AIB said “The first AIB Start Up Accelerator Fund has been very successful in growing and supporting the growth of Irish SMEs and created over 1,000 jobs. It is good to see a second fund now that will support the early stage development of the next generation of Irish SMEs.”