London-based VC IQ Capital raises $400 million to invest in deep tech

Thought Machine’s Paul Taylor commended the fund’s launch  (thought macine)

Thought Machine’s Paul Taylor commended the fund’s launch (thought macine)

The UK’s tech sector was given a boost today after London-based private equity firm IQ Capital said it had raised $400 million (£320 million) to invest in deep tech businesses.

The two $200 million funds raised are aimed at investing into early-stage rounds in UK and European startups to back founders with the ambition to scale globally in areas like generative AI, space-tech and data security.

IQ, which has invested in a suite of major tech firms in recent years, including fintech unicorn Thought Machine and AI business Bloomsbury, which was acquired by Facebook, said the new funding takes its total assets under management to over $1 billion.

Paul Taylor, founder of Thought Machine, said: “At Thought Machine, we are delighted to see IQ Capital closing their fourth fund. Their experience in every aspect of deep tech development and commercialisation is unrivalled and they fully stand behind founders through good times and bad.”

Fund IV has already made investments including DreamFold, which uses Generative AI algorithms to predict the properties of therapeutic proteins and Secretarium, which has pioneered confidential computing, developing the world’s first ‘trustless’ cloud computing infrastructure, based on advanced cryptography using only standard hardware components.

IQ Capital managing partner Max Bautin told the Standard: “The deal flow is a strong as we’ve ever seen. In fact, downturns are often great times to start a company because it’s easier to recruit and senior execs from big corporates who aren’t getting a bonus this year think ‘why don’t I leave my job and start my own business like I’ve always wanted.’

“We’re seeing some really talented companies coming to the market. The UK is 30-50% of European deep tech at the moment, and it’s always been a disproportionate part, partly because of Cambridge and London and Oxford.”