VC firms back Irish start-ups in China

Dublin-headquartered tech investor Atlantic Bridge Capital and China-focused WestSummit Capital want to help these start-ups expand into China while simultaneously providing Chinese entrepreneurs with a platform from which to address European markets.

This is the thesis that underpins the China Ireland Technology Growth Capital Fund, a $100 million vehicle run by Summit Bridge Capital, a joint venture between Atlantic Bridge and WestSummit. China Investment Corporation (CIC) and Ireland's National Pensions Reserve Fund - a unit of the National Treasury Management Agency - have each contributed $50 million.

"Summit Bridge brings together two groups, one from China and one from Europe and Ireland and we will be taking Irish companies into China," says Elaine Coughlan, co-founder and general partner at Atlantic Bridge. "The difficulty for these companies is not just access to capital but also accessing the networks and relationships that are critical to doing business in China."

The fund will target companies operating in core technology areas including internet, software, semiconductors and cleantech, as well as those in industries with applied technologies such as agriculture, food, healthcare and financial services. Ticket sizes will be around $10 million, although there is likely to be co-investment from third parties in some deals.

The four groups involved have known each another for a long time - Atlantic Bridge and WestSummit are both active in Silicon Valley as well as in markets closer to home - and putting the fund together has been a three-year process. In the interim, Summit Bridge has already started lining up investments.

According to David Lam, managing director at WestSummit, these initial deals will most likely involve Irish companies. "If you were to look at the pipeline today it is more Europe to China than the other way around," he says. "Currently, we see a lot of opportunities for Irish companies."

Coughlan says this is in part due to incubation and funding efforts from the likes of Enterprise Ireland and NPRF. Enterprise Ireland alone backs 120 start-ups each year and an estimated EUR150 million ($205 million) is available annually from a handful of seed funds.

The Summit Bridge initiative was announced at the same time as WestSummit closed its second China and North America-focused fund at $225 million. The fund is more than three times the size of its predecessor and WestSummit's first since going fully independent in 2011.

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• Topics
• Venture
• Technology
• Greater China
• Fundraising
• Europe
• Fundraising
• China
• Europe
• WestSummit Capital
• Atlantic Bridge Capital
• CIC