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26 November 2001

PENTECH VENTURES SECURES £5 MILLION FUNDING FROM SCOTTISH WIDOWS INVESTMENT PARTNERSHIP

Pentech Ventures, the Glasgow based early-stage technology venture capital fund launched earlier this year, announced today that it has secured a £5 million investment from Scottish Widows Investment Partnership (SWIP), bringing total funds under management to £17 million. The Pentech fund, which is managed by Penta Capital, is aiming to raise over £20 million to invest primarily in software companies located throughout the UK.

Pentech Ventures was founded to exploit the investment opportunities in early stage technology companies that have created strong intellectual property, with high software content and since the fund was launched in July of this year, it has received over one hundred proposals from businesses throughout the UK. To date, Pentech has completed two investments: investing in Applied Generics, the Edinburgh based telematics company, and Rhetorical Systems, a developer and provider of text-to-speech software.

As well as providing financial support to portfolio companies Pentech has established an Advisory Group of seasoned technology entrepreneurs, to support the development and growth of the portfolio companies in a ‘hands on’ manner. Their expertise spans a broad range of technology and of building start-up technology businesses through to either flotation or trade sale. The UK members of the group are Ian Ritchie, Nick Felisiak and Peter Denyer, with Robert Thomson and Donald Wallace based in the US.

Eddie Anderson of Pentech Ventures commented: "I am delighted that SWIP has chosen to invest in Pentech. It is a strong endorsement of our operational model particularly pleasing in this relatively difficult fund raising environment. Since Pentech was launched we have seen an exceptionally strong deal flow, culminating in our investments in Applied Generics and Rhetorical Systems. Both of these demonstrate our commitment to working with companies that have strong intellectual property and management teams that have the desire to build leading businesses."

Billy Gilmore of Scottish Widows Investment Partnership commented:
"There is a growing recognition amongst the investment community of the benefits of investing in private equity. We were attracted to Pentech by the strength of the team that has been assembled and its commitment to provide hands-on advice and guidance to management teams. This experience puts them in a strong position to identify promising early stage technology companies, and more importantly, to add a great deal of value to the development of the investee organisations. Pentech marks an important step in our plans to develop a high quality private equity portfolio."