By Katharine Campbell, Growing Business Correspondent

Amadeus, the venture capital fund formed by Hermann Hauser, the Cambridge entrepreneur, announced it has defied the downturn in technology shares by raising £100m for its next early stage fund.

The company, which attracted Microsoft into its first £50m fund, believes it could eventually pull in a total of £200m for its next round.

Anne Glover, managing director, said stockmarket volatility and the collapse of Boo.com, the e-tailer that burned through $135m (£90m) of cash, had not alarmed her investors unduly: "They back us because they think we can ride out all types of market."

Amadeus cannot yet show much in the way of returns because it is too young. In October it sold Entropic, a speech recognition software business, to Microsoft for an undisclosed sum. Other promising companies in the 24-strong portfolio include Cambridge Silicon Radio, which produces a "radio on a chip" in the modish "bluetooth" wireless technology space, and Mediasurface, a software company in web content management.

But Amadeus has yet to have any spectacular successes like Chromatis, the two-year-old optical networking start-up for which Lucent Technologies, the US telecommunications equipment maker, just paid $4.5bn.

It also has its fair share of investments in the out-of-favour business-to-consumer sector including a small stake in Lastminute.com, the last-minute deals business, and Thinknatural.com, a company in the competitive natural health products field which is still private.
Unlike some venture capitalists, however, the firm is not prepared to dismiss the entire sector. "We invest in management teams not sectors," said Ms Glover. There have been write-downs within the portfolio but not, so far, in the B2C area.

As for Lastminute.com, Ms Glover said that while the stock price was "clearly not good for the market and not good for the company," Amadeus investors were not unhappy.

Closure of the IPO window is not so serious because, it claims, it was never dependent on cheap money from the public markets. About seven companies would probably now seek a further private equity round, Ms Glover said.

Those buying into Amadeus include existing financial investors including BankAmerica, European Investment Fund, Lazards and Dresdner Kleinwort Benson. New investors include Abbey National Treasury Services.

Amadeus's first fund also included a relatively high proportion of corporate backers, such as Microsoft, Reuters and Deutsche Telekom. These and new ones are expected to return, but missed the first close, because Amadeus was keen to make three investments.

s Glover said corporate investors proved helpful in opening doors for portfolio companies - and in providing exit routes. "I am not sure Entropic would have been on Microsoft's radar screen if they hadn't been an investor in the fund."

The environment is immensely more competitive than the pioneering days three years ago before every venture capitalist in town wanted to invest in technology start-ups. Amadeus hopes the fact it was in early will stand it in good stead.



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