VC expert backs IT sector

Glimmer of hope for cash-strapped IT startups as Frog Capital gears up for investment in the sector

Cash injection: Frog Capital is looking for IT startups to invest in

A venture capital expert has claimed it is a good time to invest in IT startups and has pledged to pump more funds into the troubled sector.

London-based venture fund Frog Capital is searching for new investments in the IT sector after increasing its funds from €60m (£56m) to €100m, the Financial Times reports. Mike Reid, a former director of technology, media and telecoms investment at 3i, has been appointed to run the fund.

Reid said there is a shortage of capital going into technology businesses because a lot of funds are “tapped out”.

However, he said Frog would buck the trend by actively searching for IT and digital media deals of between €2m and €20m.

“The next two or three years are a great time to invest,” he said.

There are 1,100 venture capital-backed firms in the UK. Four fifths are still making a loss and a quarter have no revenue.