YOUNG ENTREPRENEURS LEAD THE GROWTH CHARGE 

·         Business growth ambitions strongest among Under-35s

Young entrepreneurs aged under 35 are on average twice as ambitious about their company’s growth prospects and four times as likely to hire new staff than older generations of business owners, according to a new report¹ launched by Albion Ventures, one of the largest independent venture capital investors in the UK.

The third Albion Growth Report, designed to shed light on the factors that both create and impede growth among over 1,000 SMEs, showed that one in six (14%) under-35s predicted their firm would grow dramatically over the next two years compared to just 8% of 45 – 54 year olds.

Interestingly, 42% of under-35s would raise external equity versus the overall average of 35%, which suggests a generational shift in the approach to equity investors.

Reflecting their strong growth ambitions, almost a third (29%) of millennial entrepreneurs have attempted to raise finance in the last year compared to 14% of their middle-aged counterparts.  However, over the same period the former were five times as likely to see their applications rejected than the latter (15% vs 3%), potentially reflecting an unwillingness of lenders to extend finance to business owners with shorter track records.

As a result of this, younger business owners are taking greater risks to finance growth: one-in-four (23%) of under-35s have used their credit card to fund their business compared to 5% of older business owners and 15% have mortgaged their property to do so versus only 7% of 45 – 54 year olds.

By revealing how under-35s are choosing to deploy new capital the Report shows them to be far more focused on growth than the older generation: for example, under-35s are more likely to seek finance to invest in R&D (14% versus 5%), hire new staff (13% versus 3%) and to bring about a change of ownership (13% versus 6%).

While the younger generation is more ambitious, they admit that their skills shortages are holding them back.  One-in-four (23%) cite a lack of mentoring as a major challenge to growth, while 16% and 23% said they would benefit from better financial management and business planning respectively.  This could explain why a much higher proportion (17%) of under-35s would be willing to exchange equity for hands-on support compared to just 7% of 45 – 54 year olds.

Patrick Reeve, Managing Partner at Albion Ventures, said: “The younger generation is by far the most optimistic and ambitious about the future.  This pro-growth sentiment is excellent news for the UK economy as the under-35s will become increasingly influential over the years to come.  The greater willingness of younger business leaders to use equity rather than banks to secure the funds they need suggests we’re shifting towards a more entrepreneurial model as seen in the US.

“That younger entrepreneurs are honest about their skills shortages and are in most need of mentoring is a call of help that we shouldn’t ignore as it’s in our collective interests to encourage their long-term success.”


Special Envoy Eileen Burbidge joins Innovate Finance in Manchester to connect city with other UK FinTech hubs

Innovate Finance, the independent membership association that represents the global financial technology (FinTech) sector, today forged a new connection in Manchester as part of its regional strategy to unite and promote technology hubs across the UK. Innovate Finance’s visit to the city, alongside Special Envoy for FinTech Eileen Burbidge is a significant step towards supporting one of the UK’s biggest financial services centres and the local technology startups that are helping to create a better financial market.

The London delegation today joins Sir Howard Bernstein, Chief Executive, Manchester City Council and Claire Braithwaite, Head of Tech North for a ceremonial event at Barclay’s RISE workspace – a gathering that will symbolise the start of a unique partnership that aims to create stronger ties between London and Manchester’s expanding FinTech clusters.

Minister for the Digital Economy Ed Vaizey, said: “Manchester makes a great contribution to the UK’s booming FinTech sector, and continues to attract a growing number of startups, innovators, corporates and investors. This city will play an important role in Innovate Finance’s regional strategy - all part of the work being done by Industry and Government to build and boost the Northern Powerhouse."

In additional to being a major financial hub for the UK, Manchester is home to the largest tech cluster outside London according to Tech Britain. It plays host to an exciting number of startups and innovators and has the country’s largest density of online digital firms.  Manchester also has a rich technology heritage. It was the hometown of Alan Turning, the pioneering scientist that cracked the Enigma code and the birthplace of the world’s first programmable computer.

Sir Howard Bernstein, chief executive of Manchester City Council, said: "Manchester prides itself on being a dynamic and innovative city with ever-improving transport links and other infrastructure as we look to the future. We are already a major financial services centre and the home to Europe's second largest cluster of digital and creative industries, with a can-do culture. As the financial technology sector grows, I'm confident Manchester will prove an attractive place for start-ups to do business."

Earlier this year, Innovate Finance united Leeds and Edinburgh’s FinTech hubs with London’s ecosystem and is currently working with them to harness their potential to build strong technology clusters that can create better financial services for consumers.  Manchester is the newest city to join the regional programme and a key instigator of new technology for the country’s financial services industry.

Innovate Finance CEO Lawrence Wintermeyer said: “We are proud to be in Manchester today with the most influential people shaping the future of financial services. This city has a rich history in banking that dates back to the industrial revolution and the cotton boom and it still plays an important and vital role in the UK economy. We aim to work closer with Manchester’s FinTech leaders to foster valuable relationships between startups, regional powerhouse firms and policy makers to ensure that innovation continues to thrive here and Manchester plays a crucial role in the future of finance.”



Ad-tech start-up wayve secures £300,000 seed funding from Mercia Fund Management

A dynamic London ad-tech company has become the latest technology start-up to receive seed capital from Mercia Fund Management’s newest hybrid SEIS & EIS fund.  wayve, a 360 degree advertising platform, which works across all channels including mobile, desktop and digital outdoor, has received £300,000 seed investment which will be used to implement and extend its expansion strategy.

Founded by Jamie Evans-Parker, a leading computer science and digital marketing specialist, wayve provides an “end-to-end” solution to simplify advertising in the multi-platform era.  The business is supported by ad tech heavyweights including James Booth, CEO of Scoota and the founder of Tangozebra – which was sold to DoubleClick/Google – and Stuart Colman, International VP at AudienceScience, Founder of Colman Media and former COO of Switch Concepts.

wayve provides a unique solution to the issues of cross-platform advertising, allowing creative advertisements to be distributed seamlessly across multiple devices and screen sizes.  The platform empowers creative agencies, publishers and media agencies to create, distribute and monitor campaigns using its product suite, which includes wayve.builder, wayve.trafficker and ad.aptive.

By offering a simplified media buying process, wayve allows effective multi-platform ad placements and audience monetisation, alongside the tools to develop engaging and creative HTML5 ads.

The platform is already in use by a number of leading global brands including The Financial Times, Bloomberg, Business Insider and News UK.

wayve’s suite of leading products include:

• wayve.builder, which converts static advertising assets into rich, animated content for use on mobile and desktop via an automated HTML5 conversion process and intuitive timeline-based editor;
• wayve.trafficker streamlines distribution of these assets across all devices and platforms, and integrates with third party tracking providers such as Google Analytics to procure real-time engagement tracking;
• ad.aptive, an IP protected technology, enhances both of these products and enables content to be optimised automatically to all screen sizes and pixel resolutions.

Commenting on the investment, Jamie Evans-Parker, Founder and CEO of wayve, said:

“Mercia’s investment provides us with the opportunity to accelerate our go-to-market strategy and build our team, as the company begins to scale and branch out into the international market.

“We believe that wayve has the potential to streamline 360° advertising for creative agencies, publishers and media agencies in a way that is cost-effective, digitally enhanced and measurable in real-time.”

Joshua Levy, Investment Manager at Mercia Fund Management, commented:
   
“I have been extremely impressed by the services offered by wayve and I am excited to see how the company will progress following Mercia’s initial seed investment.

“wayve has already proved the importance of its service offering through its impressive client roster, and I am confident that this client base will increase as brands continue to look for an efficient way of enhancing their assets and engaging with their audience.”



Keenan Recycling expands in Central Belt with BGF investment

A Scottish organic waste management company has secured a £2.2m investment from BGF (Business Growth Fund) to fuel its expansion in the Central Belt.

Family-owned business, Keenan Recycling, which is headquartered in New Deer in Aberdeenshire, launched its commercial food waste collection service in Aberdeen and Aberdeenshire in 2010 and now processes more than 60,000 tonnes of waste each year, transforming it into British Standards Institute accredited compost.

The company, which boasts a 14-acre facility at New Deer, near Turriff, has won awards for recycling food, garden and other organic waste into compost for agricultural and horticultural use, reducing the need to use chemical fertilisers.

Keenan Recycling opened a base at Linlithgow in August 2015 and has invested £700,000 in a fleet of six lorries to roll out its award-winning organic waste collection service to customers in Edinburgh and Glasgow.

The investment from BGF will trigger further expansion in the Central Belt, where the firm is already collecting food waste from more than 600 clients and is on track to reach 1,000 businesses within the coming month.

Grant Keenan, managing director at Keenan Recycling, said: “We’ve seen our number of clients more than triple from 600 to in excess of 2,000 since the Scottish Government introduced its waste regulations in January 2014, which means that all local councils have to collect food waste and all businesses that produce more than 50kg a week can’t send their leftover food to landfill sites.

“More than one million people already benefit from our services and so we’re excited to be able to bring the same opportunities to clients in the Central Belt too.

“This investment from BGF will allow us to speed up our expansion in the Central Belt and help even more customers to reduce the cost of dealing with their waste. With the support of our business development manager Claire Keenan, we’ve developed an experienced team and seen the business grow across the Central Belt in recent months allowing us to deliver our collection service throughout the whole of Scotland. ”

BGF, the independent company providing growth capital for small and mid-sized businesses, will take a minority equity stake in the firm and a seat on the board.

Alongside BGF’s investment, Jim Clark, the founder of MSIS, an oil and gas waste management company, will join the board as Chairman. Mr Clark is a serial entrepreneur and chairman who brings with him sector and operational expertise in the waste management industry.  Mel Keenan a founder member and investor in Keenan Recycling will continue as a director. Mel has a track record of success having previously led a management buyout and subsequent sale of RGIT Montrose.

Richard Pugh, investor at BGF, added: “We have tracked Keenan Recycling for several years and have been impressed by how they have built a highly successful business with consistent growth of more than 30 per cent per annum.

“The market backdrop continues to be supportive, with the Scottish Government committed to the tightest recycling targets in the UK, culminating in zero organic waste to landfill by 2021.

“The management team, led by Grant and Gregor Keenan have demonstrated that they can help local authorities and businesses meet these targets, with market leading levels of service. The business has won numerous business and environmental awards in recent years to support their position as the leading organic waste recycling business in Scotland.

“Now is the right time to invest as the business is expanding rapidly to meet demand in the Central Belt, and to prepare for further tightening of regulations in January 2016.”

BGF is already familiar with the waste sector having invested £7.5m in December 2014 in J&B Recycling, which has two facilities in Hartlepool and a waste transfer station in Middlesbrough.