U.K.-based venture capital (VC) firm IQ Capital has announced a new £125 million ($165 million) fund to invest in transformative startups that focus on artificial intelligence (AI) and other forms of disruptive “deeptech.”

Cambridge-headquartered IQ Capital launched in 2006 with an inaugural £25 million ($33 million) fund, followed nearly a decade later by a £50 million ($66 million) second fund. The company has more than 30 investments to its name, including a handful of exits — one of those was Grapeshot, which Oracle acquired a few months back, repaying IQ Capital’s entire second fund twice over, according to the VC firm.

IQ Capital is targeting £125 million for its third fund, but its first close sits at just £92 million ($121 million), and it will focus on seed to series A startups across the U.K.

Though London garners most of the headlines from a U.K. startup perspective, Cambridge is renowned for its top technology and scientific talent. Apple acquired Cambridge-based deep learning startup VocalIQ back in 2015, while earlier this year Google’s parent company Alphabet snapped up a local startup called Redux, which focuses on audio and haptics. Other recent exits for Cambridge startups include IoT company Neul, which was bought by Huawei a few years ago. Then there is chip giant ARM, which SoftBank bought for $32 billion in 2016.

While IQ Capital is well-positioned to access a thriving ecosystem outside the U.K. capital, the university city is just 60 miles or so from London, which makes it an ideal location to access two key startup hubs.

“Deeptech is increasingly being appreciated by investors and corporates alike, for its massive potential to disrupt and reconfigure industries,” noted IQ Capital partner Ed Stacey. “As one of the first investors focused on U.K. deeptech, we are delighted with the growth of UK expertise and ambition in the sector, and we anticipate it will continue to strengthen. In particular, the development of the tech ecosystem in Cambridge is quite unique, and we are proud to be right at the heart of it.”

IQ Capital will make initial investments ranging from £300,000 ($400,000) to £5 million ($6.5 million), though it could plow in up to £10 million ($13 million) over the course of a company’s life through follow-up investments.

Elsewhere today, London-based Highland Europe announced it had closed a $540 million growth-stage fund for European startups.

Sign up for Funding Daily: Get the latest news in your inbox every weekday.