Billionaire Mike Ashley’s Frasers Group has joined backers of a £40m investment fund targeting early-stage startups in the AI and data space. 

London and Belfast-based VC firm Iona Star has raised £22m in the first close of its new fund. 

The Iona Star fund will target AI and data startups with investments between £1m and £3m. 

The fund has received £10m in backing from House of Frasers and Sports Direct owner Frasers Group.  

Michael Murray, CEO of Frasers Group said data and AI technologies have become “fundamental to our strategy, unlocking new ways for us to operate more efficiently while elevating the shopping experience for our customers”.  

He added: “Our partnership with Iona Star LP will allow us to work with some of the best minds in this space to enhance our AI capabilities and accelerate the delivery of our growth ambitions.” 

Iona Star was launched by Ocula Technologies co-founder Gerry Buggy. Ocula works with retail groups to generate improvements to product pages with AI. In July, the Belfast-based AI retail platform raised £3.25m. 

“We believe that our experience as operators, combined with a strategic network across data and technology, provides the fuel to accelerate our portfolio companies,” said Buggy. 

“This is the first close due to the strong pipeline of opportunities we finally see with defensive and competitive AI moats, particularly around proprietary datasets.” 

Ocula Technologies backer Castelnau Group provided a further £10m to the new Iona Star fund. 

“Iona Star LP is intending to invest in a fast-moving segment of the market, with a management team that brings a successful and proven track record, and we are eager to see the benefits that Iona Star’s investments will bring to Castelnau’s wider investment portfolio,” said Castelnau Group CEO Richard Brown. 

Alongside Gerry, Iona Star was founded by Mike Powell, Graham Ferguson and Kevin McGivern, all with backgrounds in scaling and managing tech companies. 

Iona Star has exited a handful of investments already, including regulatory compliance platform Quantile, which was acquired by the London Stock Exchange Group in 2022 for £274m, and RxDataScience, which merged with US biopharma company Syneos Health. 

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