A new investment fund for the TMT sector brings PE-style backing to smaller firms with big ambitions.
The fund is backed by Knight Corporate Finance which is working with independent fund manager SPARK Impact to plug the investment gap for TMT businesses with the capacity and strong will to scale up.
Investment opportunities are already being reviewed and the investors expect to announce its first investment early in January.
Called >_fund:tmt, the fund will be managed by SPARK and offers investment solutions of between £0.5m and £2m, available as partial cash outs, shareholder consolidation, MBOs and acquisitions, as well as development capital - mirroring the private equity model but for smaller businesses with high potential.
"The funding is provided by entrepreneurs with roots in the TMT sector," stated Adam Zoldan, co-founder at Knight. "They have experienced first-hand the challenges faced by business owners in raising funds, particularly when they are established but considered too small by more traditional institutions such as banks or private equity."
The fund's Advisory Board includes the founders of Knight, tech expert David Walters and Edward Spurrier, the former CEO of Alternative Networks. An Investment Committee includes corporate financier Steve Stuart, former Equistone founding partner John Walker and Enterprise Ventures founder Richard Bamford.
Heading up the fund is Director Mark Borzomato, supported by Investment Manager Matt Mawdesley who joins the firm from NatWest's TMT Corporate Banking team.
Borzomato commented: "The TMT sector remains incredibly buoyant and presents a fantastic range of investment opportunities in businesses that have significant growth potential with the right level of funding in place.
"We have raised a fund from individuals who are keen to invest in people and businesses that they understand. As well as offering investment, the fund will provide investees with access to some of the most successful entrepreneurs in the sector.
"The team have also made a significant investment in the fund themselves and are open to additional investment up to a final close in May 2018."
Knight co-founder Paul Billingham added: "We see a significant number of growth companies that are unable to raise finance due to the inflexible and in many instances uncommercial funding criteria set down by traditional institutions. The new investment fund will open a door for those businesses to achieve their full potential."