Edinburgh-based investor Par Equity is today announcing the £67m first close of a fund to focus exclusively on backing startups in northern England, Northern Ireland and Scotland.
The fund is targeting a final close of £100m — which it aims to reach sometime in the second quarter of 2024.
Par Equity is focused on backing B2B companies and is looking to nip away at the huge funding gap between the “golden triangle” of London, Cambridge and Oxford and the rest of the country.
In 2021 and 2022, those three cities brought in $55.8bn in VC cash — more than three times the figure raised by startups in the rest of the UK, according to Dealroom.
But despite being underserved by VCs, the region has huge potential, says partner Andrew Noble.
“People often forget that the North of the UK is a big market in its own right. Worth around $1tn GDP, it would be the eighth largest economy in Europe, but is still largely overlooked by investors.”
Money, money, money
Par Equity will write tickets of between £5m-20m in Series A rounds. It’ll invest in between 12-15 deals, taking a lead or support role, says managing partner Paul Munn.
The fund will be particularly focused on healthtech, climate tech and industrial tech, driven by tech like robotics, photonics, advanced materials and artificial intelligence.
LPs include Scottish National Investment Bank and British Business Investments, alongside the Strathclyde Pension Fund. The remainder of the fund will be raised from institutional investors, universities and family offices, says Munn.
After completing the initial close in September, Par Equity expects its first two investments to close in the coming weeks, Munn tells Sifted.
Par Equity’s track record
Launched in 2008, Par Equity has invested more than £160m into 77 early-stage tech companies to date.
It has had 30 exits, including Edinburgh-based Current Health, which was Europe’s second-largest digital health exit — the biggest being Babylon’s $4.2bn IPO — following its sale to Best Buy in 2021 for £300m.
