Estonian government-held fund SmartCap is launching a new deep tech fund and seeking a manager to run it with patience. The firm will make the initial cornerstone investment of €15 million, and the fund manager is expected to raise more from private investors.
Outside of software, the sector is largely underfunded because of high capital needs and long development cycles, says the firm in a press release. High risk and delayed profitability are unattractive to investors who often lack experience in research-intensive fields.
“The presence of local patient capital is crucial for starting deep tech companies, since this determines whether they go from research projects to scalable global businesses,” said Sille Pettai of SmartCap.
In its open call for a private fund manager, the Tallin-based 'fund of funds' is encouraging both first-time teams as well as existing fund managers from Estonia and abroad to apply. The selection process will consider the fund manager’s team composition, competence and experience, as well as their envisioned investment strategy.
Interested parties can apply until 1 March 2021, and the manager will likely be announced in Q3.
Photo courtesy of SmartCap