LONDON - Technomark Medical Ventures Ltd. (TMV) has launched a new #10 million (US$14 million) medical sciences fund to fill the funding gap between seed capital and first-round venture funding.
Paul Kacik, investment director, told BioWorld International, "Companies are having a tough time. Venture capital firms are focusing on larger and later-stage deals. Lots of emerging companies that have received seed funding are finding it hard to complete their first round unless they are after #5 million or more."
According to Kacik, company formation within the sector has grown at a compounded annual rate of 23 percent over the past four years.
TMV plans to make investments in the range of #500,000 to #2 million in start-ups in the UK and continental Europe. "We are working with a number of companies and expect to close our first deal within six weeks to two months," said Kacik.
TMV, based in London, has been set up as a subsidiary of Technomark Consulting Services Ltd., established in 1987, which provides management consultancy and advice on mergers and acquisitions in the health sector. Another company in the group is Talentmark Ltd., the largest health recruitment agency in the UK. Kacik said the investment team has a great deal of experience in biosciences, both in terms of understanding the technologies and in assembling management teams with the ability to build technology-based companies.
The money for the fund has come from Lloyds TSB Development Capital, the venture capital arm of one of the UK's leading retail banks. Further funding is envisaged once the first tranche has been invested, and TMV will be involved in subsequent funding rounds. "I am a very firm believer in the American model of starting with the company when it forms and following through to the exit," said Kacik.