Auriga Aims to Set High-Tech Benchmark

Auriga Partners, a new venture capital firm created this summer by the former Finovelec management team, at press time was preparing a FFr 300 million (ecu 45 million) second close for Auriga Ventures. The vehicle, targeted at FFr 400 million, will invest in seed, start-up and very early-stage high-technology companies in the IT and life sciences sectors; Auriga’s founders’ stated aim is to establish the vehicle as “one of the benchmark venture capital investment funds in Europe for the financing of newly created high-tech companies”.

Chairman Bernard Daugeras heads the Auriga team and is supported by partners Patrick Bamas and Jacques Chatain; Finovelec’s former president, Jean Jacquin, will chair Auriga’s supervisory board. Auriga Partners is 100% owned by its partners, who decided to form the company after Finovelec’s shareholders announced they were withdrawing from venture investments.

Founding shareholders in Auriga Ventures that signed up for the FFr 120 million July first close include Rhtne-Poulence, Danone, Axa, the European Investment Fund, Mitsui and Investment Advisers Inc. Partner Patrick Bamas confirmed that the fund has subsequently circled further commitments – including a “very substantial” sum from a major North American fund – that should take it three-quarters of the way to its target, but he declined to identify the additional investors before the second closing.

Collaboration with leading international research laboratories will be key to Auriga’s strategy; the group will select new technologies with commercial potential developed in public and private laboratories and form companies to exploit them. Auriga will benefit from a close relationship with major French research agencies such as the National Centre for Scientific Research (CNRS), the National Institute for Agronomic Research (INRA) and the National Institute for Health and Medical Research (INSERM); Patrick Bamas said Auriga will also have access to leading laboratories in the US and Israel.

In addition, Auriga will work closely with the industrial investors in the fund who will, where appropriate, provide practical support on a contractual basis to Auriga start-ups. Both industrial and scientific partners will be represented on the fund’s two advisory boards. Bernard Daugeras commented: “The association with Auriga of financial, industrial and scientific partners constitutes a major advantage, enabling us to look forward to ranking among the leading European investment funds in our area of activity”.

Auriga Ventures will deploy roughly equal amounts in the life sciences and IT sectors, but may also back ventures in fields such as industrial processes and new materials. Because Auriga Ventures will normally be present in a company’s first round of funding, either at the seed or start-up stage, the managers expect to support most investees through several funding rounds, stopping at the pre-IPO stage. Patrick Bamas said Auriga will typically invest a total of $2 million to $2.5 million (ecu 1.6 million-ecu 2 million) across two or three funding rounds in European ventures and smaller sums in non-European companies, where the group is likely to participate alongside a local partner. The group plans to invest 80% to 85% of the fund’s capital in Europe, with French ventures absorbing roughly half of this allocation. The balance will be deployed internationally, principally in the US and Israel.

Auriga expects to hold a final close at its target level at the end of the year.