Barry Downes, chief investment officer, told Proactive: “We are on the verge of a generational shift in hardware development, which will see VR, AR and the Internet of Things (IoT) move to centre of the tech stage.”
With the shift will come huge opportunities for a wave of software start-ups and it here that Downes expects Sure Ventures will make its mark.
The fund, which has Shard Capital AIFM LLP as its manager, raised £3.3mln in an initial funding when it joined London’s specialist funds sector in January, but more money is expected over the next year as the investment programme really kicks into gear.
So far, the portfolio consists of four Ireland-based companies, but due diligence is underway on five others and Downes hopes to have invested in at least three of these in the near term.
By end 2018, the portfolio should contain at least 10 companies spread around the UK and Ireland.
Downes is clearly passionate about the future.
A software entrepreneur himself who sold a business to US giant Red Hat in 2014, he aims to repeat the trick with Sure by backing a string of British Isles-based tech start-ups.
By early stage, Downes means at the point when a company outgrows high net worth angel funding but is not quite ready for serious institutional backing.
A bridge between Angel and Series A money is how he describes it, but by investing at that point, the returns can be spectacular.
He says the backers of the mobile cloud-based business he sold to Red Hat made 25 times their money and he will look for similar returns from at least of a couple of the fund’s investments.
These are the companies that if they take off will be worth as much on their own as the whole fund.
To run the winners, in the market’s parlance, Downes says he expects more of his investments will come to IPO than the traditional venture capital model of trade sales.
One of the stable has already started the listing process, he adds, though he won’t disclose which it is of the four Irish companies.
Very large market opportunities
“We look for companies with very large market opportunities.”
They will be software companies and must have a product that has been validated by sales to at last a couple of customers.
Sure will arrange for investments of up to £1mln and though as much of three-quarters may be syndicated to other investors it will remain the lead.
The aim is to get the company to a repeatable proposition, with sales growing, revenue coming in and ready for a series A round, when external investors get involved.
The focus on Britain and Ireland reflects the expertise already here in computer gaming. Because of these gaming tools, the UK and Ireland have the skillset for the explosion in VR, IoT and AR applications, Downes sees coming.
Beneath the surface, Google, Microsoft and Apple are making huge strides in areas such as smart glass, while specialists such as Magicleap (AR) are now ready to launch their first generation of VR/AR hardware.
Apollo 11 mission
Immersive VR, a technology company focused on the education space, was the first company Sure backed and is clearly close to Downes’ heart.
Immersive VR has partnerships with leading universities including Oxford, corporates, including the BBC, corporate training firms and so on, but it is best known for the Apollo II experience, a VR version of the Moon landing that has won stacks of awards.
“You are Buzz Aldrin in the scenario and it’s so realistic that people have been crying with emotion when they take the headset off,” says Downes. “You feel like a time traveller” he adds.
Other investments include Provision, a fleet vehicle camera developer, IoT enabler Wia and games developer Warducks.
They have done well to be selected as Downes says while he sees masses of potential deals, only about one in a hundred gets through the vetting process.
“The hardest part is turning down people with great ideas.”
At 107p, Sure is valued at £3.7mln.