First UK ‘Knowledge Intensive’ deeptech university fund
UK venture capital fund Parkwalk has launched one of the first Knowledge Intensive Funds to be approved by the UK government to invest in deeptech startups.
The fund will invest in ground-breaking deeptech businesses spun out of UK universities, but with a facility to carry back income tax relief to the previous tax year and reduced administration for investors. Launching in early January 2021, the Fund will close at the end of the tax year in April 2021, and the size depends on the participation of investors.
Parkwalk has been the largest operator of these tax efficient ‘EIS’ funds in the UK for the last couple of tax years, raising around £50m per year.
The Parkwalk EIS Knowledge Intensive Fund will co-invest alongside its Opportunities EIS Fund that invests in over 100 startups out of Oxford, Cambridge, Bristol and Imperial University. Previous investments include Paragraf, Nu Quantum, Cambridge Photon Technology, Cambridge GaN Devices, Lumenisity, Flusso, Lime Microsystems and Oxford Quantum Circuits.
The Fund typically makes an initial investment of up to £5m and will make further follow on investments into existing portfolio companies. In most EIS funds currently in the market, investors can claim income tax relief when the funds are deployed, which is unknown but normally over a 12-18 month period. The difference with the Knowledge Intensive EIS Funds is that the relief is dated when the fund closes.
Parkwalk invest in key sectors for UK development, such as AI, big data, life science, materials, cleantech, future of mobility, medtech and quantum computing.
“The fund will sit alongside our evergreen Parkwalk Opportunities EIS Fund, and follows the successful close early this year of our latest university specific EIS funds, the Imperial College Innovation Fund I and University of Cambridge Fund VII. The Parkwalk EIS Knowledge Intensive Fund takes advantage not only of the UK’s word leading position in R&D and our position as the most active investor into UK university spinouts, but also the government’s support for this sector to allow a simpler EIS investment,” said Moray Wright, CEO of Parkwalk.
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