Backed by its technology-focused fund, one of the three companies will exit via flotation.

Finance Wales, the wholly owned investment bank subsidiary of the Welsh government, is close to three exits of companies it backed through its technology-focused fund. One of the exits will be via flotation on the London Stock Exchange’s Alternative Investment Market. All three companies remain undisclosed.

The fund has seen one exit so far, GeoVS, a marine technology specialist. The fund, worth a total £40m ($67m), has backed some 40 startups in Wales, mostly companies that were pre-revenue at the time. It is also currently taking steps to co-invest with the Welsh government’s £100m ($167.8m) Wales Life Sciences Investment Fund.

The technology fund has approximately £5m ($8.4m) left to invest, but could apply for additional money from Finance Wales’s general funds. On top of investing in companies launched in Wales, the fund has also been successful at attracting outside businesses into the country: to date it has invested £12m ($20m) into 12 such startups, with co-investments of £13m (£21.8m).

Finance Wales is working on finding a replacement for its £150m ($250m) Jeremie Fund, which will end in 2015. No details of a new fund have been announced but it is expected that it will be larger than Jeremie and create more opportunities for angel co-investments.

Steve Smith, director of technology venture investments, said: “We are not looking at exits much before seven years, particularly with university spin-outs. There are two companies currently looking at terms for significant trade acquisitions, which would provide at least three times our money [that is, the investments from Finance Wales]. There is also a possible flotation on the Alternative Investment Market with one company. The potential deals show that across our portfolio companies are gaining commercial traction ahead of plan.”