CANNES – A trio of well-known Irish technology entrepreneurs are backing a new €5m fund for early-stage Irish information and communications technology (ICT) companies, it emerged at the GSM World Congress yesterday.
The fund is being launched by new VC (venture capital) firm Executive Venture Partners (EVP), which is headed up by Gerry Jones, founder and former chief executive of International Test Technologies, a software testing equipment maker based in Donegal. Jones is also a former chairman of the Irish Software Association.
The other backers of the fund are John Shiel, a former vice-president of SmartForce whose e-learning software development company, AES Systems, was acquired by SmartForce in 2000 for a reported US$4m. The third partner with a software background is Bernard Donnelly, founder and managing director of Apex Software, a Dun Laoghaire-based accountancy systems specialist that was sold to Sage.
Joining these three is another industry heavyweight, Tom Byrne, former head of corporate finance of Davy Stockbrokers, who specialised in technology deals and famously advised Denis O’Brien during the landmark acquisition of Esat by BT.
Speaking to siliconrepublic.com, Jones said EVP is already cooking its first deals. It has signed heads of agreement with two software firms – one an early-stage company, the other a complete start-up – and he expects the deals to be closed within the next two weeks. The combined value of the investments would be €870,000, he said.
Jones added that EVP had set itself a target of making four investments in 2003 but this target was now being revised upwards. He said the company planned to launch a follow-on fund sometime in 2004 involving the same partners, plus some new ones.
EVP is initially concentrating its investments on software firms developing wireless applications for mobile operators – particularly those that can improve a network’s average revenue per user (ARPU) figures. “My sense is that where operators are spending money is on applications that can increase subscriber revenues,” said Jones, adding that applications that reduce a network’s operating costs are another area with potential being explored by EVP. He emphasised that he was in no rush to make investments: “We could have raised more than €5m but we would have felt under pressure to invest it quickly. We think it’s more important to wait for the right investment to come along. As someone said, it’s easy to invest; it’s harder to make a good investment.”
EVP specialises in first-round funding, a sector that many established VCs have shied away from in recent months, deeming it too risky. Jones believes that the combined commercial experience of the fund partners should help offset much of that risk, however. As well as injecting funds, one of the partners will sit on the board of client companies and offer their expertise in the day-to-day running of the company.
Anne Fitzpatrick of the wireless software sector within Enterprise Ireland, which has facilitated the appearance of a large cluster of Irish software companies at the GSM World Congress, believes that it is a good model: “It’s great to see experienced technology professionals such as Gerry Jones offering their expertise to start-up companies.”
By Brian Skelly