New €26-million seed equity fund for Irish university spin-outs

9 Nov 2009

Bank of Ireland has launched a new Seed and Early Stage Equity Fund supported by Enterprise Ireland and the University of Limerick that will focus on start-up companies and patent-pending projects in Irish universities.

The fund will target opportunities in the areas of food, ICT, green tech, and financial services.

The fund is the eighth new fund supported by Government through Enterprise Ireland’s Seed and Venture Capital Programme 2007-2012. It comprises an investment by Bank of Ireland of €17 million, €8 million from Enterprise Ireland, and €1 million by the University of Limerick Foundation (ULF).

The latest fund will increase the funds under management by Kernel Capital and its life science associate firm Seroba Kernel to €190 million.

Growth stimulation

“A healthy seed and venture-capital environment is absolutely essential for stimulating the growth of new and innovative businesses that have real potential to grow and expand into export markets,” Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan TD, said.

“This fund underpins Enterprise Ireland’s strategy to stimulate entrepreneurship and increase the flow of new high-potential start-ups which are the life blood of a thriving indigenous business sector,” Coughlan continued.

“Funding is critical, and Enterprise Ireland is working closely with the banks, the venture-capital sector and the European Investment Bank to secure finance for Irish businesses,” she said.

The group chief executive of Bank of Ireland, Richie Boucher, said the new fund will target investments in the range of €100,000 and €500,000.

“In the current economic climate, supporting new high-potential start-ups, university spin-outs and more developed companies is central to Ireland’s economic recovery and growth,” Boucher said. “This fund demonstrates our commitment and support to early stage companies with significant growth prospects.”

Fund addresses gap

The significance of the fund is that it addresses a gap in the market for investments of €500,000 and below, said Niall Olden, managing partner of Kernel Capital.

“The fund will operate synergistically with our existing Bank of Ireland venture-capital funds that currently target investments in the €500,000 to €5-million range.”

Prof Don Barry, president of the University of Limerick, said the fund will act as a catalyst for third- and fourth-level research contributing to the growth of the Irish Smart Economy.

By John Kennedy

Photo: A new Seed and Early Stage Equity Fund launched by the Bank of Ireland will target opportunities in the areas of food, ICT, green tech, and financial services.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years