Our top picks of the news for 14th July 2015

14-07-2015 - Debbie - 0 comments

Venrex democratises venture capital by inviting the crowd to take part via Seedrs

● Fundraising represents next stage in ‘democratisation’ of equity investment in early-stage businesses

● Partnership combines expertise of successful early-stage investors Tom Fleming and Mark Esiri with Seedrs’ professional crowdfunding platform

● Venrex’s track record includes investments in successful brands including Lyst, Charlotte Tilbury, Just-Eat and Notonthehighstreet.com

Seedrs, the largest crowdfunding platform in Europe to focus solely on equity investments, has announced that venture capital firm Venrex has chosen to host its new £1 million fundraising on Seedrs.

The aim of the Venrex VII fund [the fund] is to open up equity investment in early-stage businesses to more investors, effectively democratising the traditional venture capital business by making it possible for more investors to take part in the potential success of startups raising VC investment.

Venrex is a London-based, FCA-regulated, venture capital firm with a strong 12 year track record of early-stage investments in fast-growing businesses including: Just-Eat, Notonthehighstreet.com, Orlebar Brown, Lyst, Charlotte Tilbury, Chilango, Dressipi, Thread, Loveknitting, Opus Energy and Skimlinks. Led by Tom Fleming, of the well-known Fleming investment family, Venrex takes a highly targeted approach to early-stage venture investing, focusing only on opportunities that the team believe can deliver a minimum 10X return because of their expertise, market niche and passion.

Since January 2003 Venrex has invested £26 million, through six funds into 54 businesses on behalf of its partners and other investors. Collectively, the realised and unrealised net return (i.e. based on current valuations of those they have not yet sold) has been an estimated £59.5 million at an approximate net IRR of over 20% calculated over the past 12 years (estimated in accordance with the BVCA method and have been reviewed by a third party accountant).*

As the team will be investing in early-stage businesses, it’s likely that many will be eligible for the Enterprise Investment Scheme; but they’d prefer to invest in high-growth potential businesses regardless of the investor reliefs.

This raise represents the next stage in Seedrs’ strategy to be the “crowdfunder to the professionals” and follows a number of successful finance-related campaigns:

● Fuel Ventures Fund, an EIS fund set up by myvouchercodes.co.uk founder Mark Pearson to invest in the next great e-commerce companies, raised 102% of its target £500,000 tranche (as part of a total fund-raising of £30 million) as of July 2015.

● Assetz Capital, one of the leading Peer-to-Peer (P2P) lenders operating in the UK, completed funding of £3,204,750 in May 2015.

● Trillion Fund, a leading environmental and social crowdfunding platform, raised £536,800 through Seedrs in December 2014.

Jeff Lynn, CEO and Co-Founder of Seedrs, explained: “One of the biggest benefits of crowdfunding is that it opens up investment opportunities to a much broader audience than just ultra high net worth or institutional investors, breaking down traditional barriers within the venture capital industry. Tom and his team have a fantastic reputation in the marketplace for spotting the potential winners amongst early-stage startups and we are pleased to partner with Venrex on this new opportunity to enable crowd investors to access its next portfolio of highly curated companies.”

Tom Fleming, Partner at Venrex, said: “We are on a mission to democratise the venture capital investment business and make exciting early-stage investment opportunities available to a much wider investment audience. We chose Seedrs as our platform for this fund raising as it provides a professional environment that is straightforward for everyone to use and protects investors’ rights while attracting new investors who could become evangelists and customers for our portfolio companies.”

The UK alternative finance market is predicted to grow to £4.4 billion in 2015^** up from £1.7 billion in 2014 as businesses increasingly look to source more efficient ways to raise capital.

Between 2012 and 2014 the equity crowdfunding sector alone grew by 410%. Against this backdrop, in the past three years Seedrs has become the most successful equity crowdfunder in Europe, funding 110 deals in 2014.

* Please note that past investments and past performance are not a reliable indicator of future results.

**Nesta: The UK Alternative Finance Industry Report 2014 http://www.nesta.org.uk/sites/default/files/understanding-alternative-finance-2014.pdf

Danielle Levitas, SVP Research & Analysis, App Annie, says:

"The launch of Apple Pay has the potential to shake up the banking and payments industries. Compared to the rest of Europe, the UK is a leader in mobile banking. In Q1 2015 downloads of the top 10 retail banking apps in the United Kingdom were almost twice as high as those in France and three times as high as Germany. This success and proliferation in the UK shows there is an appetite for change in how people pay for goods and the increasingly important role of mobile.

"Apple is renowned for streamlining and popularising concepts, just think of its impact on MP3 players, digital music and media, smartphones and mobile apps. Although Apple Pay is not the first of its kind, the company's reach and ability to evanglise is central to driving mobile payments adoption. Apple doesn't need to have a monopoly in payments to drive change in consumer behavior and retailer POS systems. Delivering a best in class service that is widely promoted, Apple has the ability to turn another sector on its head."

Imperial Innovations gets GBP 50 million EIB backing to strengthen investment in biotech spin-offs

Imperial Innovations Group has secured a new GBP 50 million loan from the European Investment Bank (EIB) to support investment in the UK biotech and life science sector. The new support from Europe’s long-term lending institution will be used by the leading technology commercialisation company to strengthen support for harness research ideas and turn them into commercial success.

Imperial Innovations works with Europe’s top four research intensive universities in Imperial College, Oxford, Cambridge, and UCL to identify exciting university research at an early stage and develop it to build substantial, high quality, well-funded and well-managed businesses.

The new loan will be used to support equity investment in life science spin-off companies and follows the successful investment of a GBP 30 million EIB loan agreed two years ago.

“Since securing the first EIB facility in July 2013, the support of the EIB has allowed Innovations to invest more than £62m in early-stage life sciences companies, across twenty three companies, which includes the addition of seven new companies to our portfolio. The original plan was to commit this expenditure over a five year period, but we have been able to execute the plan in only two by virtue of the increasing maturity of our portfolio and the rich opportunities derived from our extensive network of academics, entrepreneurs, management teams and co-investors within the “Golden Triangle” of London, Oxford and Cambridge. To secure a second facility from the EIB is a clear endorsement of the quality, maturity and breadth of our portfolio, as well as our expertise in investing and developing both early stage and developing businesses.” said Russ Cummings, Chief Executive Officer, Imperial Innovations.

“Investment in knowledge driven and highly skilled sectors is crucial to strengthen Europe’s long-term global competitiveness. The European Investment Bank is committed to supporting investment that harnesses research to create skilled jobs and commercial success. Imperial Innovations has set a benchmark for transforming cutting-edge research into some of the UK’s most exciting early-stage biotech and medtech companies. The European Investment Bank is pleased to again support Imperial Innovations in helping new companies emerge from the world-class research emanating from the UK’s life science sector. I am confident that this new loan will allow the Group to increase its engagement and ultimately accelerate the translation of outstanding research into new and better treatments and techniques for patients.” said Jonathan Taylor, European Investment Bank Vice President.

This additional funding from the EIB will enable Imperial Innovations to increase the rate and scale of its investment in both existing and new portfolio companies, in particular in the therapeutics and medtech sectors.

The strengthened cooperation between the European Investment Bank and Imperial Innovations reflects the EIB’s broader engagement to support innovation and research investment across Europe, including in the UK and the new loan is part of the dedicated InnovFin initiative to improve access to finance for research and innovation.

Last year the EIB provided EUR 13.3 billion for investment to support innovation, skills and competitive, including support for spin-off companies and digital networks. EIB has recently started lending under the European Fund for Strategic Investment Initiative expected to support EUR 315 billion of new innovation, infrastructure and SME investment.