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Families invest in world-leading deep technology with Amadeus Capital Partners

Amadeus Capital Partners brings together global investors and revolutionary innovations in deep technology and is building on its legacy of partnerships with family offices in 2021.

Amadeus Capital Partners brings together global investors and revolutionary innovations in deep technology and is building on its legacy of partnerships with family offices in 2021.

The firm has backed more than 170 companies and raised more than $1 billion for investment over two decades. It provides capital to high-growth cutting-edge technology-enabled products and services in artificial intelligence, medical technology, financial technology, consumer services, cyber security and telecommunications infrastructure, at early and later stages in the United Kingdom and around the world, including emerging markets.

One-third of Amadeus Capital Partners’ early stage deals are conducted in Cambridge, another third in London and the remaining third around the UK, from Scotland to Southampton and Bristol to Northern Ireland. The firm networks with prolific universities working on medical technology, life sciences, computer science data and data science.

The company won investment from the UK government’s National Security Strategic Investment Fund. The partnership involves discussions on whether technology that has both commercial and security use is relevant to the government. This input informs the firm’s deal selection and help its young companies capture contracts with governments as well as commercial organisations.

Anne Glover CBE is chief executive and co-founded Amadeus Capital Partners with Hermann Hauser in 1997. Before talks with Campden Wealth families, she spoke with CampdenFB about the firm’s track record of backing successful entrepreneurs, how it engages with family offices and the deep tech trends to invest in.

Tell us about some of the technological ventures that Amadeus Capital Partners has invested in.

We’ve been investing in deep science based startups in the UK for over 23 years and in that time we have created industry-changing companies. Solexa, which we invested in 2000, is the way in which about 90% of all DNA sequencing is done globally. It was purchased by Illumina and Illumina has gone on to lead the world in that space.

We invested in next-generation DNA sequencing technology companies, such as Oxford Nanopore Technologies, and in areas like voice recognition. We’ve invested in four companies over time, two of which are embedded in Microsoft and Apple’s Siri. We’re now invested in a company called PolyAI that's revolutionising the way call centres are automated with significant productivity gains.

Because we’ve been tracking these domains over a very long period of time, we recognise when the inflection points are about to happen and what a disruptive technology looks like. The deep technology environment is getting better and the demand is getting stronger so we think it’s a great time to invest.

What will software company Riverlane be able to achieve now it has raised $20 million in Series A funding to build Deltaflow, its operating system for quantum computers, with the support of partners including Amadeus Capital Partners?

Riverlane is a deploying itself across all types of quantum hardware companies as the standard operating system and it’s working with six different UK based companies in that space. We estimate those six to be about 20% of all quantum hardware companies in in in the world.

Amadeus Capital Partners takes a very collaborative approach to investing.

Our networks help less by mergers and acquisitions of startups and much more in recruiting relevant key senior people and bringing international investors who help other companies grow into new territories.

We've helped to bring in international investors in the healthcare space from the Netherlands and from the United States, which is Gilde and Optum, a subsidiary of UnitedHealth Group, into a company called Lumeon, for example. A company called Xampla was able to attract investment from Horizons Ventures, which is Li Ka-shing’s very sophisticated capital out of San Francisco. It was a combination that they had invested with us before and they found and really liked the company, but the level of trust, because we’ve been co-investing with them in other situations, meant it was a very comfortable and reassuring dialogue. It’s never one event, it’s a triangulation of events that tend to make things happen.

What trends are you seeing at Amadeus Capital Partners among family offices seeking to access high technology in the venture capital space in the UK?

There is a recognition that technology now pervades all sectors and is the basis of disruption, even in their own legacy businesses. But the trends are complex. Sorting substance from hype is hard unless you have been immersed in technology development and forecasting for a long time. We are finding that family offices either ‘shy away’ or ‘engage’. Those who engage recognise that they are unlikely to build the expertise in house so are happy to look at investing in funds, but are often also interested in follow-on investment opportunities in the winners. This is the kind of limited partner engagement we are also interested in.

How does Amadeus Capital Partners work with family offices?

Because we're one of the few players who lead in the deep technology space, we are able to find co-investors from around the globe, but we're really keen to work with family offices who are also interested in this space.

Inevitably in funding rounds we probably have more pre-emption rights than we’re able to take up. Because we come in very early, it may be too risky for many, and quite understandably so, but as our winners emerge we have this right that we would really love to be able to share with our underlying limited partners—not on a contractual basis, but occasionally as they express relevant interest.

Unlike a buy-out investment, the co-investment doesn't necessarily happen on day one, it happens later in the life of an investment, but it's usually at a point when risk is somewhat mitigated.

Can you walk us through how Amadeus worked with a family office in a successful VC investment?

We have worked in four investments in medical technology with the same family office over 23 years. We first encountered the individual through an investment in retinal imaging company Optos—which floated on the London Stock Exchange and was subsequently purchased by Nikon for $400 million. The family then became an investor in several of our early stage funds, for broad exposure across all tech sectors.

In 2006 we then specifically funded a glucose monitoring business together, which was sadly unsuccessful. Nevertheless, we jointly went on to participate in the later stage buy-out of a novel dialysis company that was ultimately sold to Medtronic. More recently, the office joined us in backing Inotec, which is revolutionising the treatment of chronic wounds—particularly diabetic ulcers—by bringing Natrox oxygen therapy into the home. As you can see, we work with family offices as both limited partners and co-investors—especially if they are willing and able to devote time and knowledge to a particular investment sector.

Which investments for 2021 involving Amadeus Capital Partners are exciting you the most?

We will continue to see disruption based on AI techniques and insights. The extraordinary growth in data capture—90% of data has been generated in the last two years—will continue to grow at >12% per year because of the 200 billion internet connected devices in existence today. Not only does this put pressure on computing, and specifically data centres, it also offers many opportunities for innovative companies to generate ‘insight’ which was not possible before, adding value in novel ways, for example, Quibim creating an imaging bio-marker; or simply by enhancing the productivity of stretched professionals, such as PolyAI answering calls automatically in call centre reservation systems).

How can family offices take advantage of the early stage UK fund Amadeus V Technology Fund (AVTF) and the Pan-European Health and Sustainability Fund at Campden Wealth virtual fund events?

We are here to engage with investors who understand the importance of technology disruption in today’s economies—but also that the foundations of much of this innovation comes out of Europe’s key universities and in particularly Cambridge.

We're best known for deep technology early-stage activity, but we've also been doing pan-European technology growth which is another fund an we’ll be talking to Campden families on 25 February.

When it comes to emerging markets, which we moved into post the financial crisis because we felt they needed a lot of support and the opportunity was there, it's much more about tech-enabled services rather than actual deep technology, revolutionary technology itself. It's also a growth strategy.

The companies have already got some significant revenue and have demonstrated that their product works in the market, but what we generate and offer those kinds of companies is an understanding of technology trends and therefore it helps us select those entrepreneurs who are aligned and understand and fast-moving and the ability to help them expand internationally, which of course is what we do for our UK and European companies as well.

Anne Glover, on behalf of Amadeus Capital Partners, will share her insights on venture capital access to innovative deep technology at the Campden Wealth European Family Office Forum on 4 February and at the Campden Wealth Funds and Direct Investments Event on 25 February.

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