Institute of Science and Technology Austria has joined forces with Lansdowne Partners to establish a seed fund primarily aimed at spinouts domestically and internationally.

Institute of Science and Technology (IST) Austria and an unnamed subsidiary of investment management firm Lansdowne Partners signed an agreement on Monday to establish a technology seed fund called IST Cube.

The fund will launch with an initial €5m ($6.5m) in capital, but has been structured as an open investment vehicle to enable additional investors to join.

IST Cube will be led by managing director Markus Wanko, whose first responsibilities include building a team and developing the fund. Wanko is also the head of IST Austria’s technology transfer team and was formerly a venture capitalist.

IST Cube aims to plug a funding gap in the Austrian ecosystem, where institutional equity investors focused on the seed and early-stage remain a rarity. It will particularly seek to support spinouts from IST Austria and other institutions in the country.

The fund will also invest internationally, though it added it hopes this will enable more founders to base their companies in Austria.

Tom Henzinger, president of IST Austria said: “At IST Austria we want to support brilliant young people whose path takes them to entrepreneurship. Together with Lansdowne Partners, and other potential investors, we want to create an environment in which innovations can thrive.”

Harald Mahrer, federal minister for science, research and economy, said: “Translating academic research into commercial products through startups is of vital importance for the future competitiveness of Austria.

“The initiative of IST Austria and Lansdowne Partners is a great example of entrepreneurial spirit that brings together research and private investment in a novel way.”