VC firm plans further moves after €5.5m investment

1st April 2007

Enterprise Equity, a venture capital firm that backs companies in he regions, plans to step up its activity after investing €5.5 million in 14 companies in the past 18 months.

Conor O’Connor, the chief executive of Enterprise Equity, said the firm saw good opportunities to invest, particularly in companies set up by people who previously worked in multinationals.

‘‘There are people with the capability and skills out there who need funding and a guiding hand,” said O’Connor, who runs a €22 million fund. It has invested about €10 million of the fund to date and has ring-fenced some of the remainder for follow-on investments in its portfolio companies. However, unlike several of the major venture capital companies in Ireland, it still has money for new investments.

O’Connor said the firm expected to ‘‘invest in the next 18 months what we did in the past 18 months’’. The firm only invests in companies outside of Dublin, but O’Connor said that had not limited its opportunities greatly. ‘‘There is no shortage of knowledge-based companies outside of Dublin,” he said. ‘‘Our task is to find them and support them.”

The firm has two investment staff in Dundalk in Louth, two in Galway and one in Cork.

“There is a cluster of medical devices firms in Galway and we have also done quite a lot of IT investments there,” O’Connor said. “On the other hand, Cork has a strong pharmaceutical base.”

Enterprise Equity’s most recent deals include a €500,000 investment in Vysera Biomedical in Galway and a €550,000 investment in TopChem Laboratories, which is setting up an operation in Sligo. It also invested almost €500,000 in Redmere Technology, a chip-design firm based in Drogheda, Co Louth.

O’Connor said Vysera was an early-stage company developing products to treat throat illnesses. ‘‘They are at proof of concept phase with a number of solutions, but they have made good progress and we have every expectation they will do well in the future,” he said.

€5.5 million in 14 companies in the past 18 months

He said the firm was a good example of an indigenous company set up by people who had international experience in the sector. Donal Devery, the chief executive of Vysera, worked on drug delivery projects for several multinational companies.

TopChem, which is headed by managing director Donal Coveney, expects to hire 35 people in Sligo to make active pharmaceutical ingredients.

O’Connor said the company would make ‘‘small amounts of very high-value pharmaceutical compound’’ in Sligo. TopChem raised about €1.2 million in total, with Enterprise Ireland and private investor s backing the firm, alongside Enterprise Equity.

Donald Fitzmaurice, professor of nanochemistry at University College Dublin, is on the board of the company.

Enterprise Equity invested in Redmere as part of a funding round of almost €6.5m ill ion. One of the biggest funding deals last year, it was led by Celtic House Ventures in Canada; it included investment from 4th Level Ventures in Dublin.

Enterprise Equity also invested €500,000 in Zerusa, a Galway medical devices firm. Zerusa also attracted investment from the Western Development Commission (WDC), raising a total of €1.4 million for development and marketing. The firm’s haemostasis valve – which makes it easier to access blood vessels during surgery – is on the market in Europe and the United States.

Ger Brett, the founder and chief executive of Zerusa, and Liam Mulloy, the chief financial officer of the firm, previously worked in Boston Scientific.

Enterprise Equity and the WDC also invested a total of €1.1million in Instinct Technology, a Donegal firm that has developed software for computer and video game developers.

O’Connor said Enterprise Equity had provided €400,000 of the funding and believed that Instinct could do well in the international game sector.

‘‘We are busy with our existing portfolio and we have a couple of other deals in process at the moment,” he said.

‘‘There are plenty of interesting companies out there and the opportunities exist to build a strong base of indigenous companies in the regions.

1st April 2007 – By Gavin Daly, Sunday Business Post