Danish research institutes and corporates close venture fund

DTU Invest has raised E11m from a syndicate comprising seven Danish-based corporations and three research institutions to invest in Danish start-up situations.

In what is a novel approach to Danish private and public sector institutions co-operating in the venture capital sector, DTU Invest has raised DKr85m (E11.4m) from a syndicate of seven Danish-based corporates investing alongside the Technical University of Denmark, the Danish Technological Institute and the Danish Science Park.

Investing DKr10m each, the participating corporates are Danske Bank, brewer Carlsberg, industrial group Danfoss, medical equipment maker Radiometer, technology company NKT, pharma holding company Novo and Danisco, the food and sugar concern. The academic institutions shared a DKr15m commitment.

DTU Invest is run by DTU Innovation, a technology incubator set up in 1998 and backed by the Danish Department of Trade and Industry to invest public sector funds in Danish start-up companies. Led by Jacob Klingemann, chief executive officer, DTU Innovation has built a portfolio of 40 early stage investments.

Commenting on the formation of DTU Invest, Klingemann said the project constituted a novel way of corporations partnering with public sector institutions to participate in the venture process. “It is unusual for Danish industrial groups to commit resources and let others make decisions. For them, DTU Invest is a way to expand their networks and participate in the upside coming out of the portfolio.

DTU Invest is looking to invest in very early stage situations mainly in food and biotechnology. Given its relatively small size, the fund will aim to make between 15 and 20 investments.

According to Klingemann, investee companies will have the option to turn to individual members of the syndicate for later stage funding, provided DTU Invest’s other backers also benefit from such bilateral co-operation. Alternatively portfolios would be free to approach external sources for further funding.