LONDON – With plans to launch its first dedicated third-party technology fund this year, 3i will be going to market without Jim Martin, its director of technology investment for the last two years.
Instead, Martin will be in the market himself as head of Add Partners, a new independent venture firm seeking to raise between $75 million and $150 million for European technology companies with global aspirations.
Already in the process of obtaining – IMRO registration. Martin expects the fund will reach a first close in the first quarter and conclude fund raising by the summer.
Even in the current booming venture market, Add Partners’ aspirations are ambitious. Martin said he aims to position the firm as “the pre-eminent information technology fund in Europe.” To achieve this status, Add Partners will have to compete directly not only with Martin’s former employer, 3i, but with established groups like Apax Partners and Atlas Venture and a host of smaller – but experienced and successful – firms.
Two partners have joined Jim Martin as co-founders of Add Partners. Maisie Ng moves from Singapore-based Vertex, where she was responsible for European technology investments. Sebastian de la Fond previously was a member of Montgomery Securities European technology investment banking division. Add Partners plans to sign three additional senior executives to form the investment team for the firm’s maiden fund. Martin says the vehicle will seek to back around 20 young IT companies – a number commensurate with the team’s management resources.
Discussing the competition, Martin pointed out that in contrast with today’s major pan-European players, which cover both biotechnology and the IT sector, Add Ventures will restrict itself solely to the IT sector. He also maintains that smaller specialists tend to serve primarily their own national markets rather than provide genuinely regional coverage.
“During the last two years running 3i’s technology investment business in Europe, I have seen many dramatic changes in the market and am confident that opportunities for creating global technology businesses stemming from Europe will continue to increase,” Martin said.
Add Ventures will try to help young IT companies “grow bigger and faster than they would have done otherwise, working proactively towards their goals.” Although few venture firms claim to adopt a passive approach and many talk a lot about forming partnerships with their portfolio companies, very few firms actually make a difference, Martin observered.
To provide full support for its investees in the global market place, Add Ventures will need to form high-quality strategic relationships in both the U.S. and the Far East. Crescendo Venture Management L.L.C. already has agreed to be a strategic partner to the Add Partners fund, and the new firm will have access to Crescendo’s databases and contact networks. Martin also was in discussions with a potential Asian strategic investor that would enable Add Partners to leverage that investor’s regional trading networks.
Add Partners will undertake investments in very early-stage companies – a market sector Martin thinks remains under-served by the European venture community – as well as enterprises with an established revenue stream, Martin said.