Acquisition
European venture capital firm DFJ Esprit has teamed up with Coller Capital and HarbourVest Partners to acquire part of 3i plc’s European venture portfolio.
The acquisition includes some of Europe’s fastest-growing companies in technology, media, telecoms and healthcare, including Icera Semiconductors, a wireless soft modem company; Light Blue Optics, a developer of miniature laser projector systems; ApaTech, a specialist in orthobiologics; The Cloud, a wireless broadband network operator; CamSemi, a provider of energy-efficient power technologies; and FastBooking, which provides direct bookings on hotel websites.
DFJ said significant follow-on capital will be provided to support and further accelerate the growth of these companies over the next few years.
At the same time, DFJ Esprit announced the formation of two new funds totalling $495m, Encore Ventures I, a secondary vehicle through which the 3i portfolio will be acquired, and DFJ Esprit III, a new venture capital fund focused on Europe.
DFJ Esprit III, which has a target of €150 million, has held its first closing at €70 million, with commitments from institutional and public investors including the European Investment Fund, Finnish Industry Investors, Partners Group, JP Morgan, LGT Group and Harbourvest. Meanwhile Encore Ventures I closed at €170 million.
Simon Cook, CEO of DFJ Esprit, said, “We are delighted to be able to announce two new funds in the current economic climate with the backing of leading [investors]. DFJ Esprit III will continue to support the best entrepreneurs from all over the UK and Europe, just as our partner DFJ network funds do in Silicon Valley, China, India, Israel and around the world. In addition, we are excited to be the first mainstream venture firm to establish a dedicated secondary team where the opportunities to acquire stakes in fast growing businesses are significant.”
The 3i portfolio will be managed by DFJ Esprit through Encore Ventures, a new division which will focus on acquiring and managing secondary venture portfolios.
Jeremy Coller, Chief Investment Officer of Coller Capital, said, “This portfolio of exciting young European technology companies has benefited from 3i’s very able stewardship.
Peter Wilson, Managing Director at HarbourVest Partners, agreed. “This transaction presented a rare opportunity to acquire high quality European-based venture assets.”
Encore Ventures will be headed by Charles Cameron and Brian Robertson, whose backgrounds include operational management, M&A and capital-raising for European technology companies. Some of 3i’s venture portfolio team will also join Encore as partners.
Ian Lobley, 3i Partner and Head of 3i’s Venture Portfolio team said, “Given 3i’s strategy to divest our venture portfolio at good valuations, we are very pleased with this latest sale. With Encore as new partners and continuity provided by 3i venture portfolio team members joining Encore, this high quality portfolio will have in its new partners a very good platform for building value in the future.”
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