Strictly private and confidential and not to be shared.

Document prepared for Le Goff, Yves on 29 Jun 2022

Investment proposal
IQ Capital Fund IV
A fund focused on investing at Seed and Series A stages in deeptech
companies, with $1bn plus value potential, providing B2B business
solutions in areas such as cyber and data security, high performance
engineering, data analytics, fintech, healthtech and insurtech.

Private Equity Target net return Invest in multiples of Target completion

Private Debt
Alternative Funds c2.5x £25k June 22
Commercial Property potential for upside

Private & Confidential • IQ Capital Partners LLP (‘IQ’) has a strong reputation within the UK
and European deeptech eco-systems, particularly Cambridge where
IQ is based.
The Company
• Differentiated venture strategy seeking to identify and invest at Seed
and Series A stages in category leaders serving massive markets with
$1bn plus enterprise value potential.

• Portfolio companies have transformative, hard to replicate/copy

intellectual property and can scale quickly both in size and value.

• Strong track record in its specialist field.

• Allocation to the Fund secured through Connection Capital’s

relationship with the IQ team – Connection Capital clients committed
to IQ’s maiden Growth Fund in July 2020 and £3.2m to this fund in
January 2022.

Want to participate? • £175m target fund size including a manager commitment.

• Raised £130m to date with British Patient Capital a key anchor investor.
Call Claire Madden on
07764 241476 • Target net returns of c2.5x with potential for upside.

or email claire.madden@ • Minimum investment in the Fund is £1m but Connection Capital clients
connectioncapital.co.uk can invest in the usual multiples of £25k.
www.connectioncapital.co.uk • Sterling fund with returns capital in nature.

Connection Capital LLP is authorised

and regulated by the Financial Conduct
Authority No. 705640
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Document prepared for Le Goff, Yves on 29 Jun 2022

Contents
EXECUTIVE SUMMARY
i. Fund Overview 4
ii. Key Fund Terms 8
iii. Investment Classification  9

DETAILED ANALYSIS
1. Investment Strategy 10
2. The Fund Manager 17
3. Track Record and Target Returns 21
4. IQCIV Current Portfolio 22
5. Fund Structure and Fees 26

APPENDICES
A. Case Studies 29

Investment Proposal: IQ Capital Fund IV LP 2

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Important note
This document is issued by Connection Capital LLP
(incorporated in England and Wales, Registered number
OC349617), which is authorised and regulated by the
Financial Conduct Authority (‘FCA’). The contents of
this document are for information purposes only as
Connection Capital LLP does not provide advice.
Connection Capital LLP has approved the contents of this
document for the purposes of section 21 of the Financial
Services and Markets Act 2000. This information is
provided to investor clients on a confidential basis and
is not intended for retail clients. You are not authorised
to disclose it, or its contents, to any third party without
Connection Capital LLP’s prior written approval, unless
required to do so by law. This document may not be
copied or reproduced without Connection Capital LLP’s
written permission. It is an invitation for investment only
by investor clients of Connection Capital LLP who have
been classified as ‘professional clients’. As a professional
client, you are considered to have sufficient experience,
expertise, capacity and knowledge to make your own
investment decisions and to understand the high risks
involved, and you should be aware that you will not
benefit from the protections given exclusively to retail
clients under FCA Rules.
This document has been prepared with the assistance
of IQ Capital Partners LLP which has provided the fund
data contained within this document. Where information
has been confirmed by or sourced from third parties this
has been identified by way of note. No representation or
warranty is made by Connection Capital LLP (or any of its
respective members, officers, employees, or agents) as to
the information and opinions contained in this document,
which are given for your assistance but are not to be
relied upon as authoritative, or as the basis of any contract
or commitment.
In general, tranches in investment opportunities offered
by Connection Capital LLP are made available on a
first come, first served basis, but we reserve the right to
allocate tranches at our absolute discretion. Your attention
is drawn to the following: (i) the investment is high risk
– the price, value or income of or from securities is not
guaranteed and may fall against your interests and you
may get back less than you invested; (ii) past performance
is not an indicator of future returns; (iii) no personal
recommendation is being made to you by Connection
Capital LLP - you are investing on an execution only (i.e.
non advised) basis; (iv) the securities referred to may
Investment Proposal: IQ Capital Fund IV LP
not be suitable for your circumstances and if you have
any doubts, you should seek regulated advice from your
investment/financial adviser; (v) investments of this nature
may not be readily realisable or transferable and you
may not be able to realise your investment at short notice.
Connection Capital LLP will try to accommodate transfer
requests wherever possible, but we reserve the right to
charge an administration fee at our absolute discretion. IQ
Capital Fund IV A LP is an unregulated investment.
In certain circumstances, Connection Capital LLP or the
vehicle into which your investment is made (‘the Investment
Vehicle’) may apply a different or lower fee structure or
pay a fee (whether in cash or otherwise) (‘the Fee’) to an
investor client. The Fee payable by any investment vehicle
will not be material in the context of the investment and will
be included in the calculation of the potential returns set out
in this Investment Proposal or any subsequent update. You
should be aware that Connection Capital LLP will receive
fees from equity placed in this round, which are contingent
upon a successful introduction of funds.
The responsibility of Connection Capital LLP in relation
to the investment ends when the investment exits. In
particular, Connection Capital LLP is not responsible for
generating any liquidity in securities after exit. Where
an exit from any investment is made via listing on any
regulated exchange, Connection Capital Investments II
LP will generally sell any shares it holds in the investment
immediately on exit. It should be noted that the partners
and staff of Connection Capital LLP (or their named
investment vehicles) are entitled to participate in deals
alongside clients, subject to a lower minimum individual
pledge amount and, at Connection Capital LLP’s
discretion, may be exempt from the deduction of carried
interest and fees charged by Connection Capital LLP or
any feeder vehicles established to make the investment. In
the event that an investment is being made as a short-
term bridge/underwrite to allow the deal to proceed,
Connection Capital LLP may, at its discretion, apply
different terms and fees commensurate with the risk being
taken by that investor.
Connection Capital LLP is not qualified to provide tax
advice and clients should seek independent advice on
their own tax position in the proposed investment vehicle
from a qualified tax specialist. Clients should disclose
all of their tax affairs to Her Majesty’s Revenue and
Customs (HMRC)/their applicable tax authorities.
3
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Executive Summary
i. Fund Overview
Fund Strategy
IQ Capital Fund IV A LP (‘IQ Capital Fund IV’ or ‘IQCIV’ or ‘the Fund’) will seek to build a portfolio of B2B companies
with protected, hard to replicate, intellectual property (‘deeptech’) which has the potential to be rapidly adopted in
large global markets. This can be through creating new products/services, driving efficiencies and reducing costs, and/
or providing invaluable market and business insights. Target companies will have the potential over funding rounds, if
successful, to be valued at $1bn plus.

Target sectors are:

Cyber and Data Security Data Analytics – Machine Comms and Internet
New forms of cryptography Learning/Artificial Intelligence of Things (‘IoT’)
Privacy engineering Application-driven ML/AI Industrial: optimisation, diagnostics
Non-intrusive user experience Smarter algorithms and prognostics

Diagnostic algorithms Unstructured Data Discovery and Smart home: software-driven

and defences Analytics functionality
Platforms and market places Data management and analytics
Agri-tech

Fintech and Insurtech

High Performance
Tech-driven fintech:
Engineering Human-Machine
Block-chain and smart contracts
Robotics Interface
Novel analytics and optimisation
algorithms Advanced engineering Visualisation
Disruptive platforms Devices Augmented reality
InsurTech Novel materials Natural language processing
Body and brain interfaces
Future of work

Health Tech
eHealth
Bioinformatics
Epigenetics
Biomics

The portfolio will consist of a diversified pool of 25-40 seed and Series A investments with top performers supported at
Series B and beyond. Acquiring a significant stake at an early stage allows the IQ team to help each company develop
and commercialise its tech offering through iterative product-market fit, upskill the team and drive operational resilience,
while also supporting fundraising through to ultimate exit. The Fund has completed five investments to date.

The Fund strategy, combined with IQ’s experience, access to deal flow and portfolio diversification, provide the potential
for high investor returns.

Investment Proposal: IQ Capital Fund IV LP 4

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Why Deeptech?
Large industries are increasingly open to tech adoption, with businesses more willing to collaborate with compelling
deeptech start-ups and/or establish new business models driven by new applications of technology. Changes can be so
transformative that companies can open up massive markets, often very rapidly, and thus scale quickly both in terms of
size and value. This can also provide a wide range of potential routes for investor liquidity (follow-on investors, strategics,
listing etc) and create competitive situations which can result in significant valuations. Thought Machine Group, an IQ
investment which now has a value of $2.7bn and significant remaining potential, is an example of this.

Case Study 1: Thought Machine Group

Sector
Fintech

Development Stage
Cloud-native core banking platform
Scale/Internationalisation

Investment Size: Raised to date Current valuation

£44m total £366m £2,110m
£2.0m of £4.3m Q2/3’16
£1.8m of £5.5m H2’17
£0.6m of £13.7m H2’18 Vision
£15m of £97m May’20 • Building the foundations for a new era in banking for large, global
£25m of £150m Oct’21 and challenger banks.
Ser D £100m Mar’22 • A full-stack cloud-native platform for “bank-out-of-the-box”.
• Replacing legacy banking and payment systems globally.
Realised:
£23m total Progress since Investment
• 25+ clients (including 7+ Tier 1 s), 12 live deployments, $1bn+ TCV potential.
Ownership: • $32m revenue, cumulative forward bookings $173m 2021 (A).
13% total • £100m Ser D (+£35m secondary) in Mar’ 22 (incl Temasek, Intesa Sanpaolo etc).
7% £4.6m Fund II • Rapid scale-up: currently 500+ team members across London, Singapore,
4% £25m Growth Fund Sydney, NY.
2% £15m SPV
Investment Rationale
Board Representation • Founded by Paul Taylor (Phonetic Arts/IQCF1, acq by Google) and core
Max Bautin ex-Google team.
Alex Wilson • Banking IT is a $150bn+ pa market in EU & US only ($300bn+ globally).
• SOM (core banking software) -$40bn+ pa expandable to $285bn with
Locations card/payment processing application in development.
London (HQ), New York, • Most banks progressing with migrating banking infrastructure to the Cloud.
Singapore, Sydney • Highly innovative tech, significantly ahead of competition: an engineering led,
agile, continuous deployment, product-only company with a great team.
Co-investors • Launched Product 2: a cloud-native card issuer and payment processing
JPMC, Temasek, Eurazeo platform, integrated with Vault or stand-alone.
Growth, Intesa Sanpaolo,
Molten, Lloyds, BackedVC, Exit Potential
Playfair, British Business • Leading the market $50bn+ EV potential, strong IPO candidate.
Bank, NYCA, SEB, ING

Key Customers Founder

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The UK has an established and strengthening reputation
as the best place in Europe to build a deeptech business.
Cambridge is seen as the core UK deeptech centre with
other hubs being London, Oxford, Bristol, Southampton,
Edinburgh, Belfast and Sheffield. IQ, which is based in
Cambridge, is at the heart of Europe’s deeptech ecosystem.
Manager
IQCIV is managed by IQ Capital Partners LLP (‘IQ’ or ‘the
Manager’), one of the most highly regarded deeptech
venture investors in the UK. Its partners have raised over
£300m across its four funds to date and have achieved
20 exits over their 25 years of investing in early-stage
companies. IQ is well known to Connection Capital (‘CC’)
– our clients committed £4.75m to IQ’s maiden Growth
Fund in July 2020. This fund is already showing a TVPI of
2.3x and, although still early in its life, has the potential to
generate returns for CC clients’ of more than 3x. CC Clients
committed £3.2m to IQCIV in January 2022 and this is the
final opportunity for clients to participate in the Fund.
Track Record and Target Return
As at 31 March 2022, IQ Fund I (2007) generated a 3.6x
realised return for its investors with Fund II (2014) having
an investor TVPI of 7.6x and expected to go higher on full
realisation. Both benefited from an Enterprise Capital
Fund (‘ECF’) structure where the British Business Bank has
a priority return with more of the upside flowing to other
investors. Removing the benefit of this structure for Fund
II provides a 4.4x net TVPI which is expected to increase
as the balance of the fund is realised (Fund I 2.2x). Fund III
(2018), which is still early in its life cycle, has a TVPI of 1.6x
with a portfolio showing material potential.
Overall, we believe a 2.5x net return for clients (after all
fees, expenses and carried interest) investing via CC is a
reasonable target, with the potential for upside beyond this.
Why do we like this investment?
• IQ is well known to CC: we have known IQ since 2014
and CC clients invested in IQ’s maiden Growth Fund,
which supports the winners from its venture funds at
Series B and beyond, in July 2020. This fund is already at
a TVPI of 2.3x (MOIC 2.6x).
• Clearly identified strategy: deeptech is a specific subset
of venture investing – companies operate in B2B markets
where its products become entrenched in their customers’
businesses, leading to sticky high-quality earnings.
• Access to strong deal flow: IQ is based in Cambridge
which is a key deeptech hub for Europe. It is embedded
in the deeptech ecosystem and has a strong reputation
Investment Proposal: IQ Capital Fund IV LP
amongst founders as a skilled, trusted and value-
additive partner. As such, the firm’s deal flow is strong.
• Attractive potential returns: due to the nature of the
markets they serve, portfolio companies in deeptech can
scale quickly in terms of revenue and value.
• Strong track record: this is IQ’s fourth venture fund. Its
previous funds show a MOIC of 2.6x, 5.4x, 2.0x (funds
I, II and the relatively immature III respectively). The
team has proven its capability in identifying and backing
category leaders in the deeptech sector.
• Sterling denominated fund with returns capital in nature.
• The Fund has a minimum investment of £1m but CC
clients can participate in the usual multiples of £25k.
What are the key risks?
• Venture strategy: investing in start-up and early-stage
businesses is inherently risky and requires a long-term
approach. We believe that exposure to venture as an
asset class is best done via specialist funds like IQCIV.
• Market dynamics: the first quarter of 2022 into the second
quarter has seen significant turbulence in the quoted tech
markets. There are indicators of a pull back in late stage
venture valuations in the US. IQ expects some short-mid term
impact on valuations across the venture industry. However,
IQ believes deeptech investments deliver fundamental
returns of value at any part of the economic cycle.
• Further rounds of investment: venture investments
typically require numerous rounds of investment.
Changes in market dynamics, or slower than predicted
growth in a portfolio company, may make future
rounds funding challenging and only achievable at
lower valuations.
• Ability to exit investments: private company investments
are illiquid and exit timing can be unpredictable.
This is not an exhaustive list of risks and clients should also
refer to the risk factors highlighted in the Fund’s Information
Memorandum (‘IM’) before investing: a copy will be sent as a
matter of course to all clients wishing to invest.
Conclusion
The Fund provides an opportunity to gain exposure to
a compelling sub-set of the venture asset class. IQ is an
experienced deeptech investor, well regarded within the
sector by both founders and other venture investors. It has a
proven track record of identifying potential category leaders
and historic fund returns have been strong. The IQ Growth
Fund CC clients invested in last year is already at 2.3x
TVPI. Target net returns for clients are c2.5x with potential
beyond and returns are expected to be capital in nature.
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ii. Key Fund Terms

The Fund: IQ Capital Fund IV A LP (‘IQCIV’).
Investment Focus: To generate a capital return by investing mainly in UK-based deeptech B2B companies
at Seed and Series A stage.
Structure: English Limited Partnership.
Fund Size: £175m.
CC Client Allocation: £5m (£3.2m committed in January 2022).
Fund Term: 10 years from First Close (September 2021) extendible by two years. Investment Period
is five years.
Manager Commitment: Minimum of 1% of commitments.
Manager Track Record: Fund I – £25m 2007 – 1 asset left, MOIC 2.6x, TVPI 3.6x*, DPI 3.5x
Fund II – £50m 2014 – MOIC 5.4x, TVPI 7.6x*, DPI 0.7x
Fund III – £137m 2018 – MOIC 2.0x, TVPI 1.6x, DPI 0.0x
Growth Fund I – £100m 2019 – MOIC 2.6x, TVPI 2.3x, DPI 0.0x
CC Client Investment Via a CC established and operated Scottish Limited Partnership, Connection Feeder IX LP.
Method:
Drawdown Schedule: 20% drawn on completion with subsequent drawdowns expected to be over the following
five years but subject to the rate of investment.
Target Net CC Client c2.5x with potential for upside.
Returns:
Website: www.iqcapital.vc
Target Completion: June 2022

Please note that fees and expenses are outlined in section 5 of the Detailed Analysis.
*
Investors should note that Funds 1-3 were structured as Enterprise Capital Funds (‘ECFs’). In these structures, the British Business Bank is entitled to a priority
return but capped upside. This is why the MOIC is less than the TVPI. This is commented on further in the section on track record.

Investment Proposal: IQ Capital Fund IV LP 7

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iii. Investment Classification

IQ Capital Fund IV A LP: An opportunity to invest in a fund investing in UK deeptech B2B companies with hard to
replicate intellectual property (‘IP’) serving substantial, often global, markets.

Alternative Private Equity Real Estates

Connection Capital Debt and Niche
exposure to and Venture and Real
designation Financing Investments
Liquid Markets Capital Assets

Investment exposure
Direct Fund
and method

Return expectations High Medium Low

Market correlation High Medium Low

Return volatility High Medium Low

Concentration High Medium Low

Investment life 10 years+ 7-10 years 4-7 years 1-4 years <1 year

Expected income/
10 years+ 7-10 years 4-7 years 1-4 years <1 year
distributions

Likely tax treatment

Capital Income
(UK individual)

• Early-stage investing is inherently risky and long-term.

• Realisations may take longer than anticipated.
Key exposures
• Exit markets may not be as buoyant as they are now.
• Portfolio companies may not be able to raise further capital when it is needed.

To make an investment in this fund

call Claire Madden on 07764 241476 or email claire.madden@connectioncapital.co.uk

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Detailed Analysis
1. Investment Strategy
1.1 Introduction
IQ Capital has been known to the CC team since 2014 and we have been tracking its performance since that time. CC
clients invested £4.75m in IQ’s first Growth Fund in July 2020 – this is performing well, mainly driven by a steep value
increase in Thought Machine, and currently stands at 2.3x TVPI. The firm is continuing to build a strong track record in its
niche with a loyal base of LPs/VC partners.

Whereas IQ’s earliest venture funds (Funds I and II) were structured as Enterprise Capital Funds (‘ECFs’), IQCIV (similar to
Fund III) is a more conventional structure giving the team more flexibility when investing. The firm’s track record is now
well enough established that it does not need the benefits of an ECF structure to raise capital. It should be noted that
British Patient Capital is a cornerstone investor in IQCIV and committed £30m in the Fund’s first close in September 2021.
The Fund has closed commitments of £130m to date including £3.2m from Connection Feeder IX LP in January 2022. This
will be the final opportunity for CC Clients to participate in the Fund.

1.2 Strategy and Investment Criteria

IQ focuses on deeptech B2B investments which have the potential to be scaled in very large international markets within
the following sectors:

Cyber and Data Security Data Analytics – Machine Comms and Internet
New forms of cryptography Learning/Artificial Intelligence of Things (‘IoT’)
Privacy engineering Application-driven ML/AI Industrial: optimisation, diagnostics
Non-intrusive user experience Smarter algorithms and prognostics

Diagnostic algorithms Unstructured Data Discovery and Smart home: software-driven

and defences Analytics functionality
Platforms and market places Data management and analytics
Agri-tech

Fintech and Insurtech

High Performance
Tech-driven fintech:
Engineering Human-Machine
Block-chain and smart contracts
Robotics Interface
Novel analytics and optimisation
algorithms Advanced engineering Visualisation
Disruptive platforms Devices Augmented reality
InsurTech Novel materials Natural language processing
Body and brain interfaces
Future of work

Health Tech
eHealth
Bioinformatics
Epigenetics
Biomics

This will normally mean identifying companies which have the potential over time, if successful, to be worth $1bn plus.

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1.2.1 Deeptech – thought leadership and
protected intellectual property in massive
markets
Deeptech typically means intellectual property (‘IP’)
which has been developed over many years by visionary
founders, is highly differentiated, and cannot be easily
replicated. This creates an immediate competitive
advantage for companies with a core IP portfolio to
establish the right business strategy to develop their
businesses, and then to scale rapidly to become category
leaders. Deeptech is so transformative that companies can
open up massive markets, often very rapidly, accelerated
by the adoption of digital technologies. This underpins its
importance to the global economy with the ascendance of
some of the biggest companies in the world (the “FAMGA
+ BAT”, i.e. Facebook, Apple, Microsoft, Google, Amazon,
Baidu, Alibaba, Tencent), and some of the world’s largest
technology companies are increasingly demonstrating an
appetite to acquire deeptech companies.
IQ’s five-part strategy looks to:
• Identify and invest in deeptech companies established
by founders who have developed hard to replicate,
world-changing IP – with the potential to become
category leaders in massive markets.
• Exploit its strong position in the UK, and in particular in
Cambridge which, alongside other UK tech centres, is
Tech is entering a new era
Personal The Mobile Cloud
computing Web computing computing
“Software eating the world”
$17 trillion value created on NASDAQ
alone
NASDAQ Composite
1980s 1990s 2000s 2010s
Source: 2021: the year of Deep Tech by Sifted and Deal Room.
Investment Proposal: IQ Capital Fund IV LP
the best in Europe at building deeptech companies; and
exploit its reputation in the UK & Europe as the leading
deeptech VC.
• Leverage the skills, experience and capacity of the IQ
team members, who are tech-savvy, ambitious, quick to
earn founder trust, and focused on establishing the most
effective product-market fit for investee companies
and on helping them on the path to scalability. Through
25 years of investing, IQ’s team members have built
strong, mature and wide-reaching connections within
the Cambridge ecosystem, to the extent that IQ is now
the first port of call for many deeptech start-ups out of
Cambridge and beyond.
• Achieve significant percentage ownership at Seed and
Series A in deeptech companies – to shape the business,
and to build significant ownership in investees through
follow-on rounds – applying a disciplined approach to
both investment and exit to gain upside exposure through
portfolio diversification and reduce downside risk.
• Seek to realise outsized returns from such investments,
underpinned by IQ’s reputation in its markets which
it perceives as growing; by the availability in
the deeptech ecosystem of founders and other
management team executives whose experience of
fast-growth companies has grown and continues to
grow; and by the scale of markets addressable by
deeptech, which are likewise growing.
The last decade has created $17 trillion
of value on the NASDAQ alone, mainly
Deep
Tech driven by enterprise cloud and consumer
internet. In the decade we’re now entering,
tech’s impact on our lives might become
much more profound. Major technological
breakthroughs have been accumulating at
an accelerated pace.
Deep Tech is starting to become
much more visible and impactful to a
wider audience. We can expect more
breakthroughs in 2021, dominating several
headlines, becoming much more tangible,
and directly solving global social and
business challenges.
2020s
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The UK is fully-integrated at the core of European tech centres with an established and strengthening reputation as the
best place in Europe to build a deeptech company. In 2019 the UK attracted more than 50% of all deeptech VC investment
in Europe and UK deeptech investment grew strongly in 2020:

% change in deep tech investment by country/region (2019-2020)

30

20 17.4

9.9
10
5.4
% Change in Investment

0
-2.0
-10

-20
-18.0

-30
-29.2 -30.5
-40
-38.4

-50
United Kingdom Germany France Europe USA and Canada Asia Israel Nordics

Country/Region

Source: Tech Nation, Dealroom 2021

1.2.2 Deal Origination

Sources of Deal Flow
Deal Size
Rank Company Date HQ (€m) Series

1 Aug 19 491 C

2 Sep 19 218 C

Nordics 3 June 10 205 C

€302m

16
4 Dec 18 176 D
United Kingdom
€2,746m Later
Germany 5 Sep 18 89
68 €466m VC
25
Later
11 6 Aug 18 89
VC
Benelux Switzerland
€205m €475m 7 Jun 18 85 B
28 18
Cambridge (13)
France
€774m 8 Jul 19 83 D

London (18) Spain 7 Later

9 Apr 19 76
€210m VC
Later
10 Jun 19 70
VC
Total number of Deep Tech funding rounds Total value of Deep Tech rounds

Source: Pitchbook, State of European Tech 2019.

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The IQ team has developed a reputation and level of
trust in the UK deeptech ecosystem which positions it as
the go-to deeptech VC fund in the UK – the team that
people want to bring investment opportunities to before
other VCs see them. In today’s market, the opportunity
to form a personal connection with deeptech founders,
even a few days before a potential deal becomes more
widely known in the market, positions IQ to make better
investments more frequently, with greater opportunity for
outsized returns.
IQ has access to all UK sources of deeptech deal flow,
drawing on deep relationships in the ecosystem which
have taken many years to develop, working closely with
the academics, entrepreneurs and investors who create
new opportunities and determine which VCs to work with.
IQ’s reputation was established first in Cambridge, where
it remains strongly connected into the key participants
of the Cambridge tech hub and expects a significant
proportion of IQCIV’s deal flow to continue to originate
from here.
The UK ecosystem, centred on Cambridge, continues to
attract world-class technology talent and is a growing
source of technology innovation, with many successful
technology start-ups. Most of the exits from IQ’s previous
funds, including to Google and Apple, were companies
based in Cambridge. IQ’s partners have run investment
funds in Cambridge for 25 years, backing over 50 local
companies alongside local angels, entrepreneurs, the
University of Cambridge and tech corporates.
• Its extensive network of technology founders: IQ is
often approached first when founders are establishing
their businesses and so it ensures that it is known and
trusted by them. Historically this group has referred
many high-quality deals, and in many cases IQCP is
their preferred VC fund partner of choice. As well as a
prime source of deal flow, technology founders often
have the same founder-emphasis as IQ and make ideal
co-investors, as they are frequently hands-on investors
and will often look to bring their sector knowledge,
investment expertise, connections, and life experience
to help further the founder team and the early-stage
business.
• Thesis-driven targeting of its sectors: for example,
focusing on the most important developments in
Epigenetics or Auto-ML, and the network of people
working on them in the most important deeptech
centres.
• Referrals from its existing investors: many of IQ’s
existing LPs are entrepreneurs themselves and have
excellent deal flow in their respective sectors.
• Speaking and attending at key tech conferences and
events. One of IQ’s founding Partners, Kerry Baldwin, is
outgoing Chair of the BVCA and Board member.
• Referrals from founders/CEOs who have worked with
IQ before.

IQ aims to continue expanding its brand as the go-to

deeptech VC fund in the UK, and to keep its deal flow
sources current and targeted through:

• Links into the main deeptech hubs: originally from its

deep roots in Cambridge (university, innovation centres,
Cambridge Angels etc), rapidly growing to other centres
outside Cambridge (other universities, innovation
centres, incubators and technology founder groups).

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Founder connection is central to IQ Capital’s investments

Founders are insightful and ambitious

• at the cutting edge of their tech
• global visionaries
• charismatic leaders

We earn their trust from the start

• we really understand their tech
• understand how they think about their vision
• iterating product market fit
• building an effective team and inclusive culture
• scaling marketing and sales

Strong founder network effect

• powerful champions of IQ Capital
• sharing best practice between founder cohorts
• lifetime relationship

Source: IQ Capital.

1.2.3 Portfolio Construction

IQCIV’s portfolio is intended to comprise 22-25 companies investing at Series A (more at Seed) with follow on rounds into
the winners. The portfolio currently has five investments. Investing at seed/Series A enables IQ to maintain a disciplined
investment approach – the Fund will take a significant equity % at the outset enabling it to work at the heart of portfolio
companies during their formative years to shape their product market fit and strategy and build its operating and
governance teams. This upfront influential investing also protects IQ’s interests going forward when new backers come in.
The Fund will focus on making investments in UK based companies operating in the business software space as well as in
transformative hardware innovations.

The capital deployment table below illustrates potential allocations of IQCIV to each of the investment stages:

Fund's total
Number of Fund’s initial Target Typical initial investment
investments Revenue investment size ownership round size over life
Early/Seed Pre-and early
Up to 25 initial £0.5m-£2m 15%+ £2m-£5m 25%
stage revenue

22-25
Early Growth Scaling
12-15 follow-on £5m-£7.5m 15-25%+ £7m-£15m 45%
(Series A/A+) revenues
6-9 initial

Follow-on Aiming to
Growth Stage
into strong £5m+ N/A maintain 10%+ £20m+ 30%+
(Series B+)
performers by exit

Source: IQ Capital.

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These allocations reflect the importance that IQ places on disciplined portfolio construction, as well as its successful
experience with the allocation strategy applied to date in IQ’s funds II and III which achieves:

• A high level of diversification across the portfolio to maximise exposure to potential upside.
• Target holdings in each company in the 15+% range, sufficient to establish a meaningful presence on the board
from the outset.
• Smaller investment sizes initially, monitoring KPI progress before investing larger amounts in later rounds.
• Sufficient reserves to follow on with meaningful investments to back winners.
• Positioning to retain a meaningful holding in the company while allowing for some dilution in later rounds as
co-investors come into outperforming companies to scale them rapidly.

Opportunities in IQ’s markets are continuing to develop rapidly such that deployment of IQCIV will require:

• Sufficient capital to make meaningful investments into companies which increasingly are growing faster, with larger
rounds at higher valuations, and therefore require a greater allocation to achieve IQ’s target percentage holding; and
• A disciplined approach to investments and exits, to ensure that allocations to any company are made on the basis of
real value creation in the business, with appropriate round sizes and valuations, and that the timing and dynamics of
exits are optimally managed for the most successful outcome for the Fund.

By investing at seed/Series A stage, IQ can help portfolio companies establish product market fit and prepare them to
scale in massive markets, exiting as market leaders and generating outsize returns for investors. The team has shown
itself to be highly capable in executing this strategy:

Cyber and Data Long term competitive advantage

Security • IP that is hard to replicate wins time to develop the right strategy.
• Iterative product market fit enables companies to become category leaders.

Fintech and
Huge industries are now open to tech adoption
Insurtech
• Corporates collaborate with compelling deeptech start ups.
• Business models driven by new applications of technologies.
Comms and IoT
Velocity of growth
• Predominantly scalable B2B models in software and hardware
Data Analytics • Founder maturity and availability of capital: companies build faster
ML/AI and larger.
• Highly differentiated deeptech: customers pay more, faster for
Human-Machine unparalleled USPs.
Interface
Multi dimensional exit dynamics
High Performance • Successful product market fit and large revenues: financial and strategic
drivers.
Engineering
• Prior to achieving scale: potentially high return from value in the tech
and team.
Health Tech
• Increased secondary opportunities driven by investor demand.
Life Sciences

IQ Capital companies have:

>500 patents: disruptive tech >£2bn portfolio value >2,000 people in 50 companies

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1.2.4 Current Portfolio Companies
Below are summaries of a number of IQ’s current portfolio
companies which demonstrate its investment strategy.
Further details on some can be found in Appendix I.
• Thought Machine – cloud-native core banking platform;
extremely broad market opportunity for global banks;
IQ invested from Seed; 2020 $125m Series B at $0.4bn
valuation; 2021 £150m Series C at $1.4bn valuation;
2022 Series D at $2.7bn EV, $10bn+ exit potential, strong
IPO candidate.
• Privitar – extracting maximum benefits from sensitive
data sets with strong privacy levels; extremely broad
market opportunity in Big Data/data analytics; IQ
invested from Seed; 2020 Series C of $87m at $400m
valuation; multi-$bn exit potential, possible IPO
candidate.
• Concirrus – behavioural data analytics for the
commercial insurance industry; IQ invested at Series A;
2020 Series B at £57m valuation; $1bn+ exit potential to
industry/tech integrator.
• Paragraf – first to produce Graphene commercially
for next-generation biosensors and electronic devices;
IQ invested from Seed; Series A October 2019 at £36m
valuation; 2022 Series B at £80m; multi-$bn exit potential.
• Fluidic Analytics – protein characterisation transforms
understanding of the biological world; IQ invested at
Series A; Series B January 2019 at £54m valuation;
$5bn+ exit potential.
• Imandra – revolutionising software design, regulation,
transparency, and governance; IQ invested 2019 at
Seed; potential exit to financial institutions, tech vendors
or industry players. Current Series A at $50m valuation.
• causaLens – a new data analysis paradigm to infer why/
what if events happen; IQ invested in 2019 at Series A; Dec
2021 Series A at £171m post money value; potential exit
to financial institutions, tech vendors or industry players.
• FNA – uses interconnected data to save global banks
$bns and enhance resilience; IQ invested 2019 at Series
A; potential exit to RegTech provider or payments
solution provider.
• TurinTech – transforms every customer into a fully
scalable AI company; IQ invested 2019 at Seed; potential
exit to financial institution, AI platforms or industry
player.
• Virti – revolutionising professional learning with Cloud-
native AR/VR training platform; IQ invested 2021 at
Series A; potential $1bn+ IPO within 5 years/sale to a
global medical device player.
Investment Proposal: IQ Capital Fund IV LP
• Nyobolt – electrode tech for batteries with fast charging,
ultra-high-power, 2x energy density, 10x life; IQ invested
2021 at Series A; £90bn market opportunity; potential
exit to manufacturer.
1.2.5 Exit strategy: acquirers and timing
IQ concentrates on building strong, sustainably growing
businesses rather than aiming for premature exits before
real value has been achieved. It seeks to take a flexible
and disciplined approach to realising value. The level of
revenues is not the only metric for early-stage technology
acquisitions – it may validate that there is a potential
market, but it is likely that acquirers will want to control the
technology, or even just to acquire the skills of the team –
and so customer traction may even detract from realising
value in these cases. Similarly, when planning technology-
driven exits for companies which are not successfully
achieving scale, IQ will look at how the technology fits
into the business ecosystem at the time, the degree of
competitive tension and the perceived uniqueness of the
technology. Another key consideration is timing, and IQ’s
assessment of how long a technology is likely to remain
unique or competitive, which affects the timescale that
IQ considers appropriate to optimise the exit value. IQ’s
experience is that there is a wide range of potential
acquirers for deeptech companies globally, for example:
• Bigtech: IQ’s portfolio companies have a strong
technology component, and therefore the world’s
largest technology companies are natural acquirers for
these businesses. These show an increasing willingness
to acquire UK-based unique technologies or rare skill-
sets – and to pay substantial amounts as competition to
acquire them increases.
• Corporates: Non-technology businesses have also
shown increasing interest in making tech acquisitions,
where they look to gain a strategic benefit or
competitive advantage against rivals by acquiring a
portfolio company’s technology. These companies are
most likely to be existing customers or partners, or even
direct competitors.
• Private equity: Another increasingly attractive exit route
is to large investors, such as growth/buy-out private
equity (‘PE’) funds seeking exposure to rapidly growing
tech businesses via a primary investment or a secondary
purchase. Increasing volumes of secondary transactions
in current markets indicate that PE acquirers may now
be prepared to pay prices comparable to/exceeding
those paid by strategic acquirers.
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• Listing: While IPOs have provided a comparatively small share of the tech realisations over the last decade, these are
starting to be a viable option again, with indications that IPOs may be becoming more attractive for tech companies.
This might be on a main or specialist market such as Nasdaq or an alternative trading platform.

Examples of previous IQ exits include:

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2. The Fund Manager: IQ Capital Partners LLP

IQ’s partners have been investing in Cambridge and the UK for 25 years. The team has invested over £300m across its
four funds to date, with 20 exits to date. IQ is part of the Cambridge tech eco-system which includes contacts within the
university, angels, advisors, VC and industry co-investment partners. As active seed and Series A investors, IQ’s deal flow
is strong both from the local system but also more widely across the UK.

IQ Capital: deeptech expertise and business experience

7 Nationalities
10 PhDs and postgrad
• Nanomaterials
• Cybersecurity
• Computer Science
• Engineering Design
• Quantum Physics
• Theoretical Chemistry
• Neurotechnology
• AI/ML
Combined over 180 years
VC and operating
experience

The team has a reputation for winning founder trust early on – the team is diverse with 11 Phds/post grad degrees in a
wide variety of disciplines (nanomaterials, cybersecurity, engineering design, quantum physics, neurotechnology, AI) with
academic and business experience across Europe, North and South America and Asia. The IQ executive team (Partners
below) is supported by a highly experienced industrial board, seven investment professionals and seven operations/
finance staff.

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Kerry Baldwin
General Partner, Co-founder
Kerry focuses on product, marketing, go-to-market and team dynamics in IQ Capital’s portfolio companies,
as well as serving as an Investment Committee member. Kerry is currently a director and sits on the boards
of Divido BMLL, Apperio, KisanHub, Neurovalens, FNA, Synthesized and Cybersmart. Her IQCFI exits include
Sirigen (med devices, Becton Dickinson 2012).
In April 2021 Kerry was appointed Chair of the British Venture Capital and Private Equity Association. She has
served on the VC Committee of the BVCA since 2016. Kerry is also a Fellow in Entrepreneurship at Cambridge
Product GTM
University, Judge Business School.
Team Dynamics
Kerry previously worked with Venture Technologies, a predecessor of IQ Capital. Having invested £31m in
23 years of
22 investments, the fund achieved a number of highly successful exits and delivered over 30% net IRR to its
early stage tech
investors. Successful exits included three flotations (including Autonomy plc, the first technology company on
investing
EASDAQ), a secondary purchase, and a number of trade sales to companies including Sun Microsystems,
Fellow in Veritas and Yahoo.
Entrepreneurship
Post 2002, when Venture Technologies portfolio was fully realised, Kerry advised an Italian Venture Capital
Cambridge JBS
Fund and a private UHNWI syndicate on the execution of over 15 investments, advising on competitive
Chair BVCA intelligence, growth strategies and maximising shareholder returns.
BDO Stoy Kerry began her career with BDO Stoy Hayward working in Milan, Croatia, Amsterdam, Turkey and San Marino
Hayward advising on the financing and development of large hotel and leisure retail schemes for private investors.

Max Bautin
General Partner, Co-founder
A co-founder of IQ Capital, Max has been responsible for all aspects of growing the business, IR and serves
as a member of the Investment Committee. Max is currently on the boards of Accelercomm, Audio Analytic,
Concirrus, Fluidic Analytics, M Qube and Thought Machine. His IQCP exits include Spectral Edge (image
processing, Apple 2019), Grapeshot (context marketing, Oracle 2018), Stillfront Group (game developer,
NASDAQ 2017), Neul (IoT, Huawei 2014) and Phonetic Arts (speech synthesis, Google 2010).
Max is a Board member (since 2018) and VC Council member (since 2015) of InvestEurope (formerly EVCA). He
Growth M&A
is also a Steering Committee member at Cambridge University Entrepreneurs.
20 years in
Max’s career combines financial, operational and investment experience in the technology sector including
early stage tech
working with a range of technology start-ups, as well as operational experience in rapidly growing early and
investing
growth stage companies.
Cambridge,
Max started his career in Millicom International Cellular, where as part of the management ‘deal team’, he
MBA
helped to develop a regional mobile operator from start up to $50m+ turnover. Post his MBA, Max joined NW
Maryland, US,
Brown in Cambridge, where he created and managed seed stage investment funds, investing at seed stage in
BSc
over 30 high technology companies and achieving a number of exits.
Economics
He holds an MBA (Cambridge, UK) and a BSc in Economics (Maryland, USA).

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Ed Stacey
General Partner, Co founder
Ed focuses on the technology aspects of portfolio companies and IQ Capital’s investment strategy, and serves
as a member of the Investment Committee. Ed is currently on the board of TurinTech, causaLens, Iotics,
Boltzbit, Pangaea, Imandra, CamGaN, Speechmatics and Paragraf, and was previously a board member of
Privitar. His IQCF 1 exits include Imsense (Apple, 2010), Rosslyn (AIM, 2014) and Spikes Cavell (2015).
In 1997, Ed co-founded Venture Technologies, a predecessor of IQ Capital. Having invested £31m in 22 investments,
the fund achieved a number of highly successful exits and delivered over 30% net IRR to its investors. Successful
Technology
exits included three flotations (including Autonomy plc, the first technology company on EASDAQ), a secondary
Strategy
purchase, and a number of trade sales to companies including Sun Microsystems, Veritas and Yahoo.
25 years in
Post 2002, when Venture Technologies portfolio was fully realised, Ed advised a private UHNWI syndicate on the
early stage tech
execution of over 15 investments, advising on sustainable growth strategies and maximising shareholder returns.
investing
Ed started his career in electronic engineering, followed by operational experience in manufacturing.
Philips, Sagentia
Following an acquisition of the business, he joined a Cambridge-based technology and management
Manchester, consultancy in 1992, working on a number of technology consulting projects in the UK, Germany and Sweden,
MBA and building up the technology due diligence practice.
BSc Physics
Ed holds an MBA from Manchester Business School and a BSc in Physics.

Simon Hirtzel
General Partner and Chief Operating Officer
Simon joined IQ Capital in June 2020. Simon focuses on IR as well as on development of IQ’s growing team
and management of operations. Simon participates in the development and execution of IQ Capital’s strategy,
and providing deal level support to IQ’s portfolio companies.
Prior to joining IQ Capital, from 2007 Simon was a general partner and COO at Kreos Capital, the pioneer
European growth debt provider. During that period Kreos grew to over €1bn of assets under management,
having raised a €700m Fund VI and invested over €2.5bn in some 600 investments in 16 countries.
Finance,
Operations Previously, Simon was Group Chief Financial Officer at PA Consulting, a $500m global consulting and
Investor technology business, where he was responsible for all aspects of the group’s financial management with a
Relations strong focus on supporting the successful programme of tech spin offs.
30+ years Simon began his career at Arthur Andersen in London and Frankfurt, working with an international client base
experience on cross-border financing and M&A structures.
ACA England Simon is an Associate of the Institute of Chartered Accountants in England and Wales.
and Wales
He holds an MA in Natural Sciences from Cambridge University, UK.
Cambridge, MA
Natural Sciences

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Industrial Advisory Board

Andy Phillipps, Venture Partner John Snyder, Venture Partner
Repeat entrepreneur & angel, start up to scale up Repeat Entrepreneur (Grapeshot, Muscat etc.)
Founder CEO of Active Hotels/Booking.com Angel investor
Investor/Co founder/NED TopTable, Reevoo, 20+ years in scale
- up experience, US & Asia
Trainline, TMG,etc.
PhD Cambridge, MBA INSEAD

Dr Ronjon David Richard Nels Tim David Derek Wise

Nag Gammon Little Nelsen Schoonmaker Cleevely CBE Repeat tech
Inventor, repeat Rockspring, Repeat FinTech Top M&A Exec & angel in Founder of entrepreneur
entrepreneur. ScaleUp Entrepreneur Advisor, Silicon adtech, martech Abcam (£2.5bn
Institute Valley LSE), Analysys Chief Product
Head of MIT Founder/CEO of International Officer Oracle –
growth (Datatec
Angels Seed Braid Ltd Founder/MD International), previous CTO
investor/xNED ($125m, 1993) Menalto, etc CEO EMAP RaspberryPi, Grapeshot
Stanford Fellow DeepMind. NED
Founder, CEO & Specialises on Performance Cambridge
Founder CEO RaspberryPi Wireless, Founder/CTO
Chair of Dovetail EU tech exits to CEO of Odeon
Lexicus Trading, Frontier 3WayNetworks GNi ($10m,
($250m+, FiServ, US tech giants, Cinemas ($600m
(Motorolla’99), Developments (Airvana), CRFS 2007)
2017) extensive tech MBI)
Cellmania Plc etc. etc.
industry Senior roles at
(BlackBerry’13) Founder Partner DLJ Equity
16+ years in the network Co-founder of
investor, NED Partners; angel BenevolentAI,
City + scale-ups Cambridge
/pre & post Rule Financial Jagex, CCP
(c$100m, GFT, Angels. Prime specialising in
IPOs mover behind
2014) SaaS, AI
Cambridge
Start up to scale Cluster
up (EU and US)

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3. Track Record and Target Returns

IQ has been investing since 2007 and has raised three previous venture funds and one growth fund.

Track Record overview as at 31 March 2022

2007 2014 2018 2021 2019

Fund I Fund II Fund III Fund IV Growth
£25m £43m (£50m)3 £137m £175m4 Fund
MOIC 2.6x MOIC 5.4x MOIC 2.0x MOIC 1.0x £100m
DPI1 3.5x DPI1 0.7x DPI 0.0x DPI 0.0x MOIC 2.6x
Realisable DPI2 Realisable DPI2 Realisable DPI2 Realisable DPI2 DPI 0.0x
3.6x 5.5x 0.1x 0.0x
Realisable DPI2
2.2x

5
5
# Investments 14 22 30 target 6-8
target up to 35
existing portfolio

Invested to Date £25m £43m £75m £12m £45m

Portfolio EV £3,778m £3,293m £1,068m £76m £2,797m

TVPI 3.6x1 7.6x1 1.6x new fund 2.3x

Gross IRR 17% 56% 42% new fund 94%

Exits include:

Source: TMG.

MOIC = multiple on invested capital ie return on investments.

DPI = distributed-to-paid-in ie liquid return to LPs ‘realisable’ reflects actual sale opportunities.
TVPI = total value-to-paid-in ie liquid + unrealised LP return.
1
DPI, Realisable DPI and TVPI to Fund I and Fund II LPs calculated after BBB preferred equity instrument paid out.
2
Realisable DPI figures include Fund I escrows and Fund II III, Growth Fund holdings in Privitar, Thought Machine and Concirrus which were fully realisable to
secondaries during last round.
3
£43m Fund II (Dec 2014) and £7m IQSC (Aug 2016) – track record data relate to the Dec 2014 vehicle only.
4
£130m raised to date (Feb 2022). Target of £175m by Final Close (Sep 2022). £225m hard cap.

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The TVPI figures for funds I and II are enhanced by the
funds’ ECF structures, which allow a priority return but
capped upside for the British Business Bank, effectively
gearing up investor returns. The returns without this
benefit has been commented on below, although it is not
a true like-for-like comparison, as the ECF nature will have
had some impact on the fund strategy (it does come with
certain restrictions).
IQCFI (‘Fund I’) made 14 investments and has so far
enjoyed six cash exits to global technology players and
two IPOs. With a multiple on invested capital of 2.6x, the
fund has delivered a DPI to private investors of 3.5x/17%
net IRR (net of the preferred return of the British Business
Bank). Without the ECF structure the TVPI would be 2.2x
net for investors. Fund I was launched/invested at a time
when IQ was less established.
IQCFII (‘Fund II’) is now over seven years into its life and
has made 22 investments and achieved four cash exits
so far. Its realisations represent 70% of investors’ paid-in
capital, with its multiple on invested capital of 5.4x and
56% gross IRR already significantly exceeding that of
Fund I. Fund II has generated a 0.7x DPI to date: while
the portfolio is still in its value-creation phase, a 5.5x DPI
would already have been achieved if Fund II had chosen
to accept the formal secondary sale offers which were
presented to it in the last Privitar fundraising round and
the current Thought Machine round. With an estimated
aggregate enterprise value of its portfolio companies
of £3.2bn, Fund II has a TVPI of 7.6x for private investors
Investment Proposal: IQ Capital Fund IV LP
(net of the preferred return of the British Business Bank).
Without the ECF structure, the TVPI would be 4.4x net for
investors and this is anticipated to rise by the time the fund
is fully realised.
IQCFIII (‘Fund III’) is in its fourth year and has made 30
investments. There have been no cash exits to date at this
early stage in the fund but, with an estimated aggregate
enterprise value of its portfolio companies of £1.1bn and
42% gross IRR/2.0x multiple on invested capital, it has
a TVPI of 1.6x. While the portfolio is at an early stage of
growth, a 0.1x DPI would already have been achieved if
Fund III had chosen to accept the formal secondary sale
offers which were presented to it in the 2020 Concirrus
fundraising round.
IQCGF (IQ’s maiden growth fund), which targets growth-
stage investments into six to eight out-performers within
the IQCP portfolio, is now in its third year and has made
five investments. With an estimated aggregate enterprise
value of its portfolio companies of £2.8bn and 94% gross
IRR/2.6x multiple on invested capital, it already has a
TVPI of 2.3x, and might expect a 2.2x DPI if all realisable
holdings were now exited.
For IQCIV a net return to investors of 3x or more is a
reasonable target. Of note, IQ’s carried interest steps up to
25% of the excess beyond this level of return and the team
at IQ is clearly aiming for this.
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4. IQCIV Current Portfolio

Fund IV initial portfolio investments
Climate change/Net Zero reporting risk and analytics platform
First investment: October 2021
Oct 2021: £3.9m of £6m Ser A round
Customers include Nestle, Axa Insurance, Inditex, Bloomberg, Aberdeen Standard, Tesco, EasyJet

RNA diagnostics biomarker discovery platform for cancer diagnosis

First investment: September 2021
Sep 2021: £0.9m of £2.1m Seed round
Customers include Wellcome Sanger Institute, Oxford Nanopore

Instant diagnosis of all pathogens

First investment: December 2021
Dec 2021: £0.9m of £2.1m Seed round
Working with NHS Oxford University Hospitals and University of Warwick

Secure Cloud platform & privacy-respecting products

First investment: January 22
Jan 2022: £5m of £5m Ser A round
Customers include Intel, Allen & Overy, Swisscom and more

Advancing surgery with intraoperative precision robotics

First investment: November 2021
Nov 2021: £0.75m of £2.5m Seed round (company also secured $15m in NIH/NCI grants)
AiM’s technology is applicable to all 24m annual surgeries beyond neuro

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Sector
Data Analytics -ML/AI Climate Change/Net Zero reporting risk and analytics platform
Development Stage
Repeatable Sales Raised to date Current valuation
Investment Size: £3.9m £6.0m £25.8m
£3.9m of £6.0m Oct’21
Vision
• To become the category leading Climate Change risk modelling platform for large
Ownership: 15%
multinational corporates to plan, implement and monitor progress in meeting
15% £3.9m Fund IV
net-zero targets.
• To expand product functionality to quantify further risks such as Cyber threats.
Board Representation
Kerry Baldwin
Alex Wilson Progress since Investment
• Strong revenue traction - reached £3m revenue in under 18 months since launch
Locations with T1 Global Corporates.
Cambridge, UK • Clear upsell opportunity within global clients.
• Large addressable market - direct sales model to large corporates (>$3bn revenue),
Co-investors partner strategy for mid-market corporates (>$500m revenue).
NGP, TokioMarine, Castor • Signed global channel partners.
Ventures
Investment Rationale
• Spinout from Cambridge University’s Centre for Risk Studies (CCRS), second-time
founders (previously sold to large InsurTech), strong industry links.
• 21% of the world’s largest 2,000 public companies have net-zero carbon emission targets
• Increasing pull from large corporates to model decarbonising operations, re-balancing
product portfolio and restructuring supply chains.
• Regulatory driver – Task Force for Climate-related Financial Disclosure (TCFD) reporting
to become compulsory for all UK listed companies.

Exit Potential
• $1bn+ IPO candidate.
• Trade sale to channel partner (e.g. KPMG, Deloitte), large data providers.
.

Key Customers Leadership Team

Andrew Coburn Michelle Tuveson Simon Ruffle

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Sector
Cyber & Data Analytics
Secure Cloud Platform & Privacy-Respecting Products
Development Stage
Repeatable sales Raised to date Current valuation
£5.0m £32.3m
Investment Size: £5.0
£5.0m of £5.0m Jan’22
Vision
• To enable the highest level of data protection available for genuinely private
Ownership
and secure collaboration on data.
15.4% £5.0m Fund IV
• To create an open ecosystem where anyone can create, host, control and
monetise applications powered by Secretarium.
Board representation
Ed Stacey Progress since investment
Archie Muirhead • Launched Softmetal trading exchange with Unachrome - first spot price for alloys.
• Won prestigious A-Team Innovation Awards 2021 ‘Best financial data security
Location solution’ & ‘Best use of distributed ledger technology’.
London • Won the Global Central Bank Digital Currency (CBDC) Challenge run by the
IMF, MAS, World Bank, UN in partnership with AWS and Mastercard.

Investment Rationale
• Secretarium’s technology solves the privacy vs performance challenge and has the power
to unlock a new generation of privacy-preserving solutions for thousands of applications
• Secretarium’s unique technology combines cryptography and secure hardware to allow
data to be processed in the cloud, while remaining completely encrypted in-use
• £1.3m revenue 2021 from several live applications (each a £100m ARR+ opportunity)
developed on Secretarium’s platform in FS & TMT.

Exit Potential
• $bn IPO candidate.
• Trade sale to a large technology company which wants to embed confidential
computing into their offering, cloud providers, or FS company building CBDCs.

Key Partners and Customers Leadership Team

Investment Proposal: IQ Capital Fund IV LP 25

5. Fund Structure and Fees
5.1 Fund, taxation and investment structure
The Fund is a UK Limited Partnership. CC clients will invest via a Scottish Limited Partnership called Connection
Feeder IX LP (‘CFIXLP’) which will be established and operated by Connection Capital LLP for the sole purpose of
investing in the Fund. CFIXLP will then invest into IQ Capital Fund IV A LP, an English LP. The manager of IQ Capital Fund IV
A LP is IQ Capital Partners LLP, which is a UK based, FCA regulated manager.

CC clients can participate in multiples of £25,000. CC clients will be 20% drawn on completion, with the remainder of
the capital likely to be drawn within four to five years. The actual rate of drawdown will depend on the Fund’s underlying
deployment rate. This is a sterling denominated fund.

It is anticipated that the returns from the Fund and CFIXLP will be capital in nature for a UK based taxpaying individual.

CC is not qualified to provide tax advice and clients should always seek independent advice on their own tax position
and their tax jurisdiction from a qualified tax specialist, before proceeding. By investing, the pledged entity becomes
a partner in CFIXLP for tax purposes. Please note that all partners will be required to register their partnership
interest in CFIXLP with HMRC. CC will issue the relevant forms for completion and submission to HMRC to all investors,
post completion.

Each partner will be responsible for any liabilities to tax on income or chargeable gains arising out of their own share
of CFIXLP’s income and capital gains and will be required to include this on their own tax returns. The general partner/
administrator of the Fund will provide CC with annual tax information and, in turn, CFIXLP will engage third party tax
advisors to produce a tax return for CFIXLP and will provide clients with the information necessary for inclusion on any
returns that clients will have to submit to HMRC.

Investors should note that failure to honour a drawdown request will result in a cancellation of their interest in the
underlying Fund and thus, a loss of any capital drawn down with no right to receive any further proceeds.

Investment Proposal: IQ Capital Fund IV LP 26

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Document prepared for Le Goff, Yves on 29 Jun 2022

5.2 Fees
IQ Fees
Management Fee: 2.0% per annum on Total Commitments during the Investment Period reducing thereafter on a
sliding scale (by 20% per annum).

Carried Interest: 20% of investor profits subject to a hurdle of 8% per annum with a 100% catch up until net
returns to Investors reach 3x subscription. Thereafter carried interest is 25% of investor profits in
excess of a 3x return.

Connection Capital Fees (plus VAT as applicable)

Access Fee: 2.5% of the pledged amount for pledges of less than £200,000;
1.5% for pledges of £200,000 or greater, reducing to;
1.0% for pledges of £500,000 and above.

The Access Fee will be paid by the general partner of CFIXLP from CC clients’ initial drawdown
into CFIXLP.

Operator’s Fee: 0.7% per annum on the Commitment to the Fund during the Investment Period and then on the
net drawn amount from clients1 thereafter, subject to a minimum of £30,000 per annum index
linked, charged to the general partner of CFIXLP six monthly in advance. An amount on account
for the first six months will be deducted from the initial drawdown and, each six months
thereafter, amounts on account will be deducted from cash balances held by CFIXLP.

Carried Interest: 2.5% of the realised profit arising to clients after all fees and expenses subject to an 8% per
annum hurdle on the net amount drawn from clients1 with full catch up.

Set up and other costs: CFIXLP will bear any third party legal and other costs associated with the January and June
closings (estimated at not more than £15,000 (excluding VAT)) as well as third party tax and
accounting costs estimated at c.£7,000 per annum (excluding VAT) and any costs associated
with its wind up.

All amounts set out above are plus any value added taxes required to be charged and third-party costs reflect current
levels which may change over time. The costs incurred by the general partner of CFIXLP will be satisfied by way of a
priority profit share.

CFIXLP’s commitment to the Fund will be calculated as the total commitments received from CC clients, less an allowance
for the Access Fee, third party legal and other costs associated with the initial investment and estimated working capital
to meet the ongoing costs of CFIXLP, including the Operator’s Fee (collectively the ‘Initial Deduction’), taking account
of anticipated timing of cashflows into, and from, the Fund. In the event that cash balances arising from undrawn
commitments to the Fund, or distributions received from the Fund, are insufficient to satisfy ongoing costs as they fall
due, (e.g. the Fund is fully drawn and no distributions are made at the point the working capital in the Initial Deduction
has been fully utilised), under the terms of the limited partnership agreement, the general partner of CFIXLP has the
right to call additional amounts from clients in the form of Top-Up Commitments (over and above clients’ original pledge
amounts) which will be repaid out of distributions received from the Fund.

1
Net drawn amount from clients represents the balance of amounts drawn by CFIXLP less amounts returned by CFIXLP. For Operator’s Fee calculation, this is based
on the opening balance for the six-monthly deduction. For the carried interest, this is calculated on the daily balance.

Investment Proposal: IQ Capital Fund IV LP 27

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Document prepared for Le Goff, Yves on 29 Jun 2022

Appendices
A. Case Studies

Sector
Data Privacy Engineering

Development Stage Extracting maximum benefits from sensitive data sets with strong privacy levels
Scale/Internationalisation
Investment Size: £6.4m
total Raised to date Current valuation
£0.2m of £0.7m Jun’15 £124.7m £384.1m
£0.5m of £3.0m Jul’16
£1.1m of £14m Jul’17 Vision
£2.8m of £32m Jun’19 • To enable every organisation to use, share and derive insights from data with an
£1.8m of £75m Apr’20 uncompromising approach to privacy, while ensuring full compliance with data
protection policies and regulations.
Ownership: 7% total
5% £1.8m Fund II Progress since investment
2% £4.6m Growth Fund • Global customers in telecoms, finance, insurance, and pharma sectors.
• Secured several data partnerships.
Locations • Achieved native cloud integration with Google Cloud, Azure, AWS.
London (HQ), New York, • Completed development of a new Data Provisioning Platform.
Singapore • $87m Series C funding round led by Warburg Pincus with Accel, Partech, IQ Capital,
Salesforce Ventures, and key customer HSBC investing $7m ($457m).
Co-investors
Warburg Pincus, Accel, Investment Rationale
Partech, IFM, Salesforce, • Cutting edge algorithms ahead of competition.
HSBC • Big Data market will grow to $67bn by 2021 at a a CAGR of 18.5%.
• Adoption driven by vulnerability of concentrated data collated for big data analytics
• Privitar’s software achieves privacy without limiting usefulness for machine learning.
• Market opportunity is extremely broad: many possible channels to market.

Exit Potential
• $Multi bn+ market opportunity.
• Possible IPO candidate possible acquisition by an enterprise tools vendor.

Key Customers

Founders

Source: IQ Capital.

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 Strictly private and confidential and not to be shared.
Document prepared for Le Goff, Yves on 29 Jun 2022

Sector
Insurtech

Development Stage
Scale/Internationalisation Cloud native insurance platform with real time data analytics

Investment Size: £11m

total Raised to date Current valuation
£3.0m of £6.0m Jul’18 £27.5m £60.1m
£2.0m of £4.0m Jan’19
£6.0m of £20m Feb’20 Vision
• To become the reference cloud software platform for all non-T1 insurers/MGAs.
Ownership: 26% • To massively improve pricing and loss ratios for insurers in maritime, auto,
total property, and aviation using ML applied to IoT/alternative data and
21% £8.0m Fund III ‘behavioural’ asset models.
5% £3.0m Growth Fund
Progress since investment
Board representation • £3.3m ARR, £6m+ advanced pipeline, $170bn TAM. Fast becoming the industry
Max Bautin standard risk pricing software for marine insurance.
Archie Muirhead • Exclusive/sticky agreements with most marine industry players (e.g. engines,
navigation systems) to get access to IoT data, well ahead of competition.
Locations • Customer Willis Re is global No.1 marine reinsurance broker.
London (HQ), New York,
India, Singapore Investment rationale
• Uniquely placed to win in the insurance in a box market due to its high throughput
Co-investors data analytics heritage: cloud first, microservices architecture, elastic scaling,
Albion, Commerz Ventures, high uptime, quick deployment and configuration.
EOS • Access to exclusive data from an expanding pool of providers giving differentiated
datasets for advanced ML algorithms producing new pricing data. 3 trillion rows of
data ingested.
• Unlocks new business lines and reduces costs via superior risk pooling, real time
management of losses, and predictive risk & claim management.
• Excellent USPs and competitive position (legacy on prem incumbents with no
analytics) Strong traction with insurers in all stages and key segments

Exit Potential
• $1 bn+ Most likely to be acquired by an existing insurance industry giant or by a
technology player/integrator looking to disrupt the sector.

Key Customers and Partners

Founder

Source: IQ Capital.

Investment Proposal: IQ Capital Fund IV LP 29

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Document prepared for Le Goff, Yves on 29 Jun 2022

Sector
Health Tech
Protein characterisation transforming our understanding of the biological world
Development Stage
Emerging Revenues Raised to date Current valuation
Investment Size: £7.5m £38.8m £58.0m
total
£0.3m of £1.6m Dec’14 Vision
£1.4m of £5.3m Aug’16 • To characterise proteins and their behaviour to transform our understanding of
£4.3m of £24m Jan’19 biology, dramatically improve disease diagnosis, develop treatments and
£1.6m of £8m Oct’20 maintain well being.
• Fluidic’s easy to use products characterise proteins in real time, in natural solution
Ownership: 14% and without foreign surfaces or matrices unlike all competitors.
14% £7.5m Fund II
Progress since Investment
Board Representation • Tech proven first and second models shipped to customers to positive feedback.
Max Bautin • Third model (high throughput One M) first shipments in Jan’ 22.
Alex Wilson • Wide range of applications already proven by customers, including assessment of
immune response after COVID 19 infection or vaccination.
Location
Cambridge, UK Investment Rationale
• Current protein characterisation techniques are old, slow and expensive.
Co-investors • Fluidic creates small, cheap and fast machines to address a $5 bn+ lab market (and
Molten, BGF, Parkwalk, $1 tn+ medical/diagnostic market) similar to Illumina in the DNA space.
Amadeus, CIC, Delin, • The only approach that enables near real time measurement of protein and antibody
Cambridge University interactions in the native environment such information is transformative.

Exit Potential
• Initial traction is in the research/lab tools market potential $500 m+ exit to medical
device players ( Bio Rad, Thermo fisher, Illumina).
• $5 bn+ potential once in medical diagnostics market (Illumina $50 bn, with 10 x
smaller TAM).

Key Customers

Founders

Source: IQ Capital.

Investment Proposal: IQ Capital Fund IV LP 30

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Document prepared for Le Goff, Yves on 29 Jun 2022

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