NESTA reveals £50m early-stage investment fund
23/10/2006
"The very element of this new approach is to leverage private capital into the riskiest stages of innovative start-ups."
NESTA, the largest UK endowment exclusively devoted to innovation, will formally open the fund, worth around £10m a year, in early 2007. NESTA will seek to build on the success of its investment portfolio by targeting promising, early stage innovative companies that so often struggle to attract seed finance.
Crucially, NESTA provides much-needed mentoring support to its investees, significantly increasing the rate of commercial success.
NESTA's fund will play a distinctive role in the early-stage investment community - not only looking for returns, but also for leveraging co-investment relationships with private funds.
NESTA will create investment packages and encourage other funders into this early-stage space to stimulate greater investment.
In another investment innovation, NESTA will for the first time, invest money in other funds as well as its direct investment in new ventures. This new approach will greatly enhance NESTA's capacity to support innovation at the very earliest stage and will help encourage further investment into this crucial stage of the cycle.
NESTA investments have already helped attract private finance into new ventures. Since 2003 every £1 NESTA has invested has attracted £5 of private capital. We will aim to maintain this ratio as the size and number of our investments increase.
NESTA Chief Executive, Jonathan Kestenbaum said:
"The very element of this new approach is to leverage private capital into the riskiest stages of innovative start-ups."
1. Soft support is providing mentoring for early stage businesses so they have all essential skills to be commercially successful.
2. NESTA case studies: Light Blue Optics is developing a compact projection unit that can be attached or inserted into MP3 players, mobile phones and laptops. The units direct light through miniature lasers to project A3-sized video images. They are powered using the company's patented PVProT technology. The projectors, which are pocket-sized, will have countless applications, taking mobile technology to the next level. NESTA's initial funding of £150,000 in 2006 helped Light Blue Optics secure US$2.5 million in a seed funding round led by 3i plc. They are now able to accelerate their development and build new relationships with strategic customers and partners. Starbridge Systems have developed a revolutionary new medical micro-pump which could result in millions of diabetes sufferers leading safer lives without the need for regular injections. Their Starlet pump - which is smaller than a 1p piece - is worn painlessly anywhere on the body and can dispenses insulin continuously for up to three days. There are 175 million diabetics in the Western world alone - a fifth of who are dependent on insulin - and so the potential market for the micro-pump is huge. It also has potential for use across a range of other medical disciplines, from cancer research to fertility treatment
3. NESTA is the National Endowment for Science, Technology & the Arts
4. NESTA is the largest endowment exclusively devoted to innovation in the UK.NESTA uses this unique funding to invest in early stage companies, inform innovation policy and encourage a culture of entrepreneurship. The aim is to transform the UK's capacity for innovation.
5. NESTA Spokespeople are available for comment and interview please contact our press office on 020 7645 9583 or 07957 156759