The current SPARK Ventures formation came about as a result of a management buy-out of the fund management operations of SPARK Ventures plc in October 2009.
SPARK Ventures plc (formerly NewMedia SPARK plc) has its origins in NewMedia Investors, which was founded by Tom Teichman in 1996 and joined shortly afterwards by Andrew Carruthers and then by Jay Patel. The business had two components: direct investing into start up and early stage digital media companies and fund raising for later stage development capital and M&A. In the run up to the dotcom boom, NewMedia Investors gained a reputation as a leading player in the technology VC community, seed financing businesses such as lastminute.com and ARC semiconductors. Between 1997 and 1999 the company raised or invested more than £300m.
In 1999, NewMedia Investors formed a partnership with leading city figures Mike Whitaker and Luke Johnson with a view to launching an AIM quoted venture fund. NewMedia SPARK was formed and listed on AIM in October the same year. The stock quickly rose from a listing price of 10p to 80p, peaking at 150p in mid-2000.
During the period, NewMedia SPARK acquired several technology venture businesses including Sweden’s CellVentures, Europe’s largest incubator and a number of UK listed investment vehicles such as Internet Indirect, Softechnet.com, and Globalnet Financial.
In 2002, NewMedia SPARK switched its strategy away from growth by acquisitions and instead increased its emphasis on delivering value from the venture portfolio. By 2005, the company had achieved some significant exits including the sales of Pricerunner ($36m) in 2004 and Elata ($60m) and Footfall (£35m) in 2005, culminating in the 2006 sale of Mergermarket to Pearson plc for £120m, representing 27x return.
In May 2007, in order to develop a broader fund management business which could complement its direct investment activities of the group, NewMedia SPARK purchased Quester, one of UK’s longest established venture capital managers with a focus on early stage investments in technology and life sciences and a portfolio of funds which included several VCTs, a Limited Partnership and three University funds. A few months after the acquisition of Quester, the combined group was renamed SPARK Ventures plc.
In August 2009, SPARK Ventures plc announced a change in its strategic direction that will involve the making of no more new investments and the gradual realisation of its existing portfolio together with the return of cash to its shareholders. As a consequence of this change of strategy, the fund management division was sold to its former executive management team and this team was given an investment management contract to continue managing the portfolio they have developed over the previous ten years. From October 2009, SPARK Ventures plc no longer has any full-time employees but has four non-executive directors and two representatives from its new Manager.