Last week we dug into Frumtak 2’s investment and funds and this time around we’re looking at Brunnur. Brunnur is a 4 bn ISK (~$31 million) fund, focused mainly on various technology sectors as well as food production. We covered the fund in more detail last year.
To this date, Brunnur has invested in two companies – ARK Technology and ATMO Select. Both investments were in the fourth quarter of last year. The investments total 425m ISK.
|Company||Year / Quarter||Amount ISK / ~$|
|ARK Technology||2015 / Q4||225m ISK / $1.7m|
|ATMO Select||2015 / Q4||200m ISK / $1.5m|
|Total: 6||425m ISK / $3.2m|
According to Sigurður Arnljótsson, GP at Brunnur, the fund foresees at least three investments in the first two quarters of 2016.
Based on public information and comments from Sigurður Arnljótsson, GP at Brunnur, we mapped out the available funds for Brunnur.
Note: We estimated the fees based on general practice in the VC industry, where funds take 2% of the total size per year in management fees. Frumtak has a operating lifetime of 10 years.
Dry Powder is the cash reserves the funds’ GP’s have allocated to followup rounds to their portfolio, which is at the minimum 30%, according to Sigurður. The fund could decide to hold up to 50% for followup cash, but Norðurskautið uses the lower number in our calculations.
Based on this, we can calculate how much of their capital Brunnur has invested. This number ends at around 21%, leaving a little under 80% ready for deployment.
Having allocated 21% of its capital on two investments rhymes closely with their stated goal of investing in 10-15 companies over their investment period of 3-5 years.
Comparing Brunnur’s activity to Frumtak 2 over the last year shows that Frumtak 2 has been more active, both in terms of number of investments and deployed capital. Frumtak’s investments have been on a wider scale in terms of size and verticals – ranging from consumer tech to hardware to automobiles – while Brunnur’s investments have been B2B tech products – ARK focused on optimizing energy consumption of marine vehicles, and ATMO Select developing a music management software solution for retail spaces.