Kernel Capital Partners has moved into the top tier of Irish venture capital firms with the closing of a €70 million investment fund, writes John Collins.
Enterprise Ireland is investing €20 million in the Kernel Capital Partners Fund II under its €175 million Seed and Venture Capital Scheme 2007-2012.
Bank of Ireland, with which Cork-based Kernel has had a long relationship, is investing a further €20 million, with the remaining €30 million coming from private investors.
These include businessman Tom Jones, who has backed a large number of Irish technology firms, and Limerick property developers Ralph Parkes and Michael Parkes.
Niall Olden, managing director of Kernel Capital Partners, said the fund was looking at a number of investments and he hoped to close the first deals in the first quarter of 2008.
He said the fund will make investments of €2 million-€10 million, significantly higher than with its first fund of €29 million, which is no longer actively seeking new investment opportunities.
Mr Olden said investments at the upper end of the scale were likely to be made as part of a syndicate or over the course of a number of funding rounds.
To date, Kernel has favoured electronics and life sciences investments, reflecting the presence of former Nortel chief scientist Prof Daniel McCaughan and former senior Elan executive Daniel O'Mahony on its advisory board.
Kernel Capital Partners Fund I made investments in Cork-based Farran Technology (sold to Smiths Detection), data storage company MP Stor, Clare-based Chip Sensors and Yuroe Broadband, the vehicle which refinanced Smart Telecom. Life science investments include Stokes Bio and Merrion Pharmaceuticals.
That fund received approval from Enterprise Ireland on September 13th, 2001, just two days after the World Trade Center fell. "We had a schedule to have matching funds in place by December 31st but the banks and other institutional investors were saying come back next year," Mr Olden said.
"It really looked like we could lose the funds because we were a new entity not an established fund."
Mr Jones and Ralph Parkes held their nerve and committed their money. Mr Olden said that without Mr Jones in particular, the fund may never have got off the ground.
