Pangaea Ventures, a 13 year-old specialist advanced materials venture firm, which is largely corporate-backed, is looking to hit the fundraising trail after it sold its first company to an investor in one of its funds last month.
Boulder Ionics Corporation, a maker of electrolytes for batteries, sold to advance ceramics company Coorstek’s specialty chemicals unit, for an undisclosed sum.
As part of a $4.3m Pangaea-led deal, Coorstek invested in Boulder Ionics in April 2012 alongside another Pangaea limited partner, Japanese industrial company JSR Corporation. Andrew Haughian, a partner at Pangaea, who was on the board of Boulder Ionics, said of Coorstek’s involvement via their corporate venturing unit, 9th Street Investments: “They had a board of directors role, no different from myself. They also had insight being our LP, seeing through our filter how we perceived the market opportunity.
For Pangaea, the deal appears to match a timing thesis on corporate collaborations. Keith Gillard, a general partner at said: “The data maps out well. Often times there is an acquisition two and a half years after a strategic starts a close collaboration with a start-up in the advanced materials sector.”
Gillard said Pangaea provided the same level of information to Coorstek about the deal as to its other 15 corporate investors. Gillard said:“We can’t pick favourites. We have 16 strategic LPs and of course they compete in a number of businesses. They all have access to the same information.”
Following the exit Pangaea perceives a boost for its planned fundraising efforts next year for its fourth fund, after it raised about $60m for its third fund from which it had backed Boulder Ionics. Gillard said: “This exit early in the fund life has been well received.”
Pangaea will be looking to roughly double the size of its fund, for its fourth effort, and will be looking to secure financial investors to increase its firepower. Gillard said: “The core of our fund will always be strategic. We will look to financials to increase the size of fund but not be the foundation of it.”
Correction: an earlier article in Global Corporate Venturing on the Boulder Ionics deal said Pangaea had made its first exit. We should have said it was the first exit from Pangaea’s third fund.