Autonomy Founder Mike Lynch Said to Plan Technology Fund

Mike Lynch, the founder of U.K. data-analysis company Autonomy Corp., is planning to set up a technology investment fund that will back young firms, according to people with knowledge of his plans.

Lynch, who left Hewlett-Packard Co. this year after the U.S. company agreed to acquire Autonomy for $10.3 billion last August, will tap the expertise of other former Autonomy executives for the fund, the people said, asking not to be identified as the plans are private. The fund will be based in London and invest globally, with the aim of using the experience of Lynch and other executives to assist the companies in its portfolio, they said.

Hewlett-Packard said in May that Lynch, 47, would leave the company following a decline in license revenue at the Autonomy unit, which specializes in helping corporate clients sift through and analyze large volumes of data. He owned about 8 percent of Autonomy’s shares at the time of HP’s offer, according to data compiled by Bloomberg. That stake was then valued at 505 million pounds, or $834 million.

Hewlett-Packard, based in Palo Alto, California, ousted its then-chief executive officer Leo Apotheker in September of last year after investors criticized the Autonomy deal, along with reduced sales forecasts and a short-lived plan to spin off the company’s personal computer unit.

Whitman Era

Current CEO Meg Whitman, who quickly canceled the proposed spinoff, is nonetheless directing spending toward products for cloud computing, data security, and information management that could reduce HP’s dependence on lower-margin hardware businesses. In May, Whitman appointed Chief Operating Officer Bill Veghte to lead the Autonomy unit.

Lynch will have plenty of company in his new role. London is becoming an increasingly important center for technology investment as U.S. venture-capital firms look for hidden gems and cheaper valuations far from the Silicon Valley spotlight. The U.K. government is encouraging startups to move to “Tech City,” a four-mile-long stretch of former industrial zones in the east of the British capital, where Google Inc. announced plans last year to open a seven-floor hub for young companies that will complement its existing London offices.

Autonomy traces its origins to a very different part of the British tech landscape. Founded as a spinout from the University of Cambridge in 1996, the company was one of the largest in a cluster of enterprise-focused tech businesses that includes semiconductor designer ARM Holdings Plc.

This year, Lynch participated in an investment round for Featurespace, a Cambridge-based company that provides predictive software for marketing and the detection of fraud. The University of Cambridge graduate focused his early research on the mathematical theories of the 18th-century theologian and mathematician Rev. Thomas Bayes, who sought to refine the study of probability.

(Updates with Featurespace investment in final paragraph.)
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