Par Equity and Praetura Ventures unveil merger – Daily Business

Par Equity, the Edinburgh-based investor, and Praetura Ventures are merging to create PXN Group, a £670m investment firm focused on Scotland, the north of England and Northern Ireland.

The two firms say they are looking to double down on closing the regional funding gap in the UK.  The deal, which is subject to regulatory approval, will see Par Equity and Manchester-based Praetura Ventures continue to run their respective funds.

It comes amid expectations in the sector that more mergers may take place as funds struggle to reach their targets amid the squeeze on liquidity.

Dave Foreman, founder of Praetura Ventures and new CEO of PXN Group, says that one reason for the merger is reaching the scale he thinks will become more necessary to succeed in venture. 

The biggest VC firms are getting bigger: last year saw Balderton raise $1.3bn, Index Ventures raise $2.3bn and Accel raise $650m. 

There aren’t yet plans for PXN Group to raise a fund of its own. Paul Munn, founder of Par Equity and new executive chair of PXN Group, told website Sifted that Par will close its latest fund at the end of June at around £75m; it set out to raise £100m after a first close of £67m in October 2023.

“We need to deploy that money, so I think the next version of that would be a PXN Group product,” he said.

Par Equity is focused on early-stage B2B investments in healthtech, climate tech and industrial tech, driven by tech like robotics, photonics, advanced materials and artificial intelligence, whereas Praetura has a focus on SaaS, fintech and healthtech businesses. 

Nothing changes in the day to day running of the funds; all of them will be managed by existing fund managers. “It’s the same people pursuing the same investment thesis in that market but with greater resources behind them,” said Munn. 

VC funding in the UK is predominantly focused on the capital. London brings in 51% of venture capital while Scotland, Northern Ireland and the north of England bring in a combined 20%, according to a report by the British Venture Capital Association.

The north of the UK is “underserved”, Munn said. “The challenge in the north is the dearth of money at so many levels and amounts, from small, medium and large cheque sizes.

“We’ve got fantastic research institutions and universities, particularly looking at Edinburgh University in terms of data and AI and robotics, down to Manchester and Leeds where there’s a lot of industrial tech. One thing we’re not short of is opportunity, the scarce resource is the funding.”