EQT Ventures eyes UK investment spree with £970m fund

Sweden’s EQT Ventures said it was eyeing up a UK investment spree today after it bucked a downturn in the market to raise $1.1bn (£970m) to pump into early-stage tech firms across Europe.

EQT, which has now raised over $2.3bn since launching in 2016, said it is looking to fuel growth of firms across the continent and take advantage of subdued prices as the market is buffeted by headwinds this year.

Venture capital has dropped off in the third quarter of the year as rising interest rates and a looming recession make cash harder to come by for investors and startups. Analysts are predicting a sustained slide in investment levels as recession grips the UK and beyond.

But speaking with City A.M., EQT co-fund lead Ali Mitchell said opportunities in the UK and beyond were still rife and the fund was looking to spur growth across tech sectors including gaming, so-called deep-tech and climate tech. 

“We’re still seeing a lot of startups coming through at the very early stage. Actually, there’s been a rise in startup founders,” he told City A.M.

“The legend goes that some of the greatest companies of our time were all started in the last big downturn, and that’s totally true. And we’ll see the same thing again.”

He added that the UK was likely to lean into its traditional industries in the years ahead and continue producing AI and deeptech start-ups out of its universities, as well maritime and automotive firms. UK firms had been hampered by a lack of growth capital in the past however, he said.

“What we need is the money to support these companies to help them grow on a global stage,” he added.

“And that’s one of the reasons I’m very proud to be back here, as a Londoner back in London – back from the Valley – to back these companies with a lot of money, because one of the things that Europe has lacked has been large, homegrown funds to build global winners.”

EQT has got the backing of a host of institutional investors, foundations and endowments across Europe, the Americas and APAC with the new fund.

EQT has already acted as the lead-investor to 13 start-ups with Fund III, and said it was now looking to ramp up its investment in firms using technology to “solve some of the biggest challenges facing society”. 

In the UK, the firm has previously backed a number of fast-growing tech firms with its past funds including phone-maker Nothing, fibre firm Supplant,  AI voice platform Sonatic – which was acquired by Spotify – and talent management tool Beamery.