A new fund created to tackle the gap in investment for scalable tech companies is on the verge of announcing its first two deals.
The founders of TMT corporate finance boutique Knight Corporate Finance teamed up with independent fund manager SPARK Impact to create fund:tmt at the end of 2017.
BusinessCloud understands that fund:tmt, which will provide flexible funding solutions of between £500,000 and £2m, expects to announce its first two investments in the first quarter of 2018.
One of its selling points is that most of its investors are successful entrepreneurs from the TMT sector who have experienced first-hand the challenges faced by business owners in raising funds, particularly when they are established but still considered too small by more traditional institutions such as banks or private equity.
Adam Zoldan, co-founder at Knight, said: “fund:tmt is specifically geared to facilitate a flexible range of uses including partial cash outs, shareholder consolidation, MBOs and acquisitions, in addition to development capital. The fund is simply applying a private equity model for smaller but ambitious businesses.”
Fellow Knight co-founder Paul Billingham added: “At Knight 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. fund:tmt will open a new door for those businesses to achieve their full potential.”
fund:tmt is managed by the team at SPARK, led by director Mark Borzomato and supported by investment manager Matt Mawdesley, who joined the firm from NatWest’s TMT Corporate Banking team.
The fund is complemented by an advisory board including the founders of Knight, private equity tech and digital professional David Walters and Edward Spurrier, formerly CEO of Alternative Networks PLC, and an investment committee featuring corporate financier Steve Stuart, former Equistone founding partner John Walker, and Enterprise Ventures founder Richard Bamford.
Mark Borzomato of SPARK heralded the launch of the new fund: “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 are excited to 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.”