report h1 2017 data partner sponsored by · 2018-01-30 · data partner 3 sponsored by foreword...

1

WelcomeBuilding a website, hosting, CMS...for first

time business owners, getting these online essentials in place, on a budget, can seem

daunting at first. But there are many ways to ensure you can set these elements up at a reasonable price. Most hosting providers come in at a similar low price point – often from just £1 a month – so business owners should look at online reviews and go for quality of support, says Alex Price, founder of 93digital.co.uk. ‘You need to know you can get in touch with your hosting provider quickly and easily, at any hour, if your website goes down,’ he adds. Getting the best web hosting package is key for your website to work smoothly and problem free, says James Blackman, founder of website design and digital marketing agency CocoonFX Media. ‘When we set up our business, there weren’t many hosting options out there, however the golden rule we stuck to was rock solid customer support and UK-based servers,’ he says.The key factor to consider for web hosting is the SLA and the hardware, he adds. ‘RAM and CPU is a good start. The higher the numbers the better and also cloud is often a wise choice.’‘If you want hassle-free web hosting, businesses

should consider getting a host with cPanel, an easy-to-use administration package and allows you do things with a click of a button,’ Blackman advises. ‘Hosting should not be seen as the

cheapest element – however you don’t need to spend a fortune,’ he adds. ‘TSO Host and Krystal Hosting I would recommend. TSO at the moment does have some issues at the moment but the support is good. Krystal Hosting, which Blackman has used

since the start of his web design career, offers a £99+VAT a year package that will allow you to manage a site with at least 200 -300 pages and 500 visitors a day. With a background in digital marketing, Caroline Taylor, founder of Taylor’d Bundles, took the decision to design and build her own CMS using Drupal - saving money. ‘Their plug ins and updates are straightforward and allowed me to build a site that worked especially for me,’ she says. ‘I have a very good friend who programmed, tested and helped me support the site as and when I need it. I’m very fortunate but made it a priority to fully understand and learn what the site was capable of so I can manage the majority of my site itself.’Taylor works with up-and-coming designers and asks as many as possible to link to her site to help with link building and add her URL to as many posts as possible to help increase SEO visibility. ‘It was also really important for my site to be mobile optimised so we built the site to appear perfectly on the top 15 mobile operators - I now use analytics to see what the site is being viewed on and optimise accordingly.’

SPONSORED BYDATA PARTNER

BRITISH GROWTH STARS

REPORT H1 2017


http://www.barclays.co.uk/business-banking/sectors/entrepreneurs/

http://beauhurst.com/



2 SPONSORED BYDATA PARTNER

3. Foreword

5. Acknowledgements

Venture Capital Growth Stars

6. Farfetched and Improbable? Why European venture capital is now larger than life

11. Inside insight – Venture capital: Driving growth in the UK

Crowdfunding Growth Stars

13. Has crowdfunding peaked?

15. Inside insight – Breaking the biggest equity crowdfunding misconceptions

Business Growth Stars

17. Who are the British Growth Stars?

18. Seed stage stars

22. Venture stage stars

25. Growth stage stars

Contents

The British Growth Stars is an independently reviewed, data-driven, editorially-led report that deep-dives into the UK’s fast-growth business landscape.

This is the first edition of the report, which includes industry analysis, expert insight, interviews and profiles of top funders and unlisted UK-based start-ups that have raised funding in different stages of its growth.




Foreword

It’s the best of times, it’s the worst of times. If there has ever been a time to gratuitously borrow from Dickens, it is now, the second half of 2017. This year’s British Growth Stars report was compiled against the backdrop of continuing concerns over Brexit and its esoteric ramifications on currency rates, policy, and investment climate. Global uncertainty also prevails, with the rollercoaster Trump presidency, and the unrelenting growth of American and Asian tech giants. However, the British entrepreneurial ecosystem has never been healthier. Dealflow data from the first half of the year shows that investment volumes have been skyrocketing compared to last year. UK-headquartered unlisted companies attracted a record £3.03 billion of equity investment during the first six months of 2017, up 74.7 per cent from the second half of 2016.Interestingly, the deal numbers reveal a different story. The first half of 2017 saw 3.5 per cent fewer transactions than the same period last year. What this shows is that the UK is now seeing larger deals enter the pipeline, fuelling growth at a rate the start-up ecosystem has never seen before. But the numbers could be skewed. In the first six months of 2017, the UK saw two of the biggest deals so far –cloud computing firm Improbable raking in £389 million from American firm, Softbank Capital, and fashion-tech marketplace Farfetch securing £313 million from China’s JD.com.

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Deal numbers and amount invested by half

Amount invested Number of deals

Investors funnelled more money into British start-ups and high-growth companies in the first half of 2017 than ever before. But is it good news all around?

Based on Beauhurst data




The UK’s record half for equity investment was largely because of fire-power from overseas investors. This suggests that the number of deals involving investors headquartered outside the UK was up by 26.7 per cent in the first half of 2017, which experts suspect is a direct impact of the weakened pound over the past year. It could also be symptomatic of the fact that early-to-mid-stage UK business now have a host of funding options, but for later-stage businesses, attracting investors to fund their Series D round and beyond is an uphill task.

Based on transaction data tracked by Beauhurst, a leading research platform specialising in high-growth companies, this report looks at the equity investment landscape, as well as the most promising companies in the UK, from seed to late stage in their growth. We spoke to investors in the most active venture firms in a deep-dive feature dissecting how the two largest deals to date came to be, and what the industry can expect for the rest of the year. In the first half of 2017, the number of deals secured on crowdfunding platforms, rose by 2.6 per cent, even though transaction numbers slowed in the second half of the year. Looking at the equity crowdfunding sector, we zeroed-in on the most active platforms, speaking to those at the helm on the biggest trends in alternative finance.

Praseeda NairEditor

Top investors by deal numbers

Banks Crowd funding Crowd funding Crowd funding

SyndicateRoom

19

Crowdcube

56

Startup Funding Club SEIS Fund

11

Scottish Enterprise

17

Finance Wales

16

Seedrs

64

Entrepreneur First

18

Funding London

11

Business Growth Fund

14

Angel Capital Group

11Accelerated

Digital Ventures

13

Top investors by deal numbers

Banks Crowd funding Crowd funding Crowd funding

SyndicateRoom

19

Crowdcube

56

Startup Funding Club SEIS Fund

11

Scottish Enterprise

17

Finance Wales

16

Seedrs

64

Entrepreneur First

18

Funding London

11

Business Growth Fund

14

Angel Capital Group

11Accelerated

Digital Ventures

13




As banking partner to some of the most disruptive and innovative businesses in the UK and beyond,we understand entrepreneurs and what it takes to help make a venture successful. For the ambitiousentrepreneur, growth can sometimes happen so quickly that you have little time to focus on yourfinancial strategy – that’s why it’s so important to have a banking partner that can keep pace withyour business.

entrepreneurs.barclays

Beauhurst is the leading provider of rich data on high-growth UK companies. The platform is used by hundreds of organisations around the UK to research and monitor the most ambitious businesses and their backers.

beauhurst.com

GrowthBusiness.co.uk is for CEOs of fast-growth businesses in the UK. The site features in-depth interviews with business leaders, and news and analysis of hot-button topics affecting the start-up world. From trends in fundraising and financial management, leadership, productivity and workplace culture, to how-to guides from Europe’s top venture capitalists and advisers, GrowthBusiness.co.uk is an essential resource for today’s savvy entrepreneur.

growthbusiness.co.uk

Vitesse Media is a digital media and events company specialising in enterprise technology, growth business, investment and diversity. Our award-winning magazines and content, engaging and responsive websites, exciting events and highly acclaimed research touch millions of small businesses, entrepreneurs, IT professionals, investors and professional women, as well as advisors and suppliers.Our flagship media brands, published across print and digital, include Information Age, SmallBusiness.co.uk, GrowthBusiness.co.uk, What Investment and Growth Company Investor. We also host a series of high-profile and prestigious live events that bring together thousands of business, technology and finance decision-makers.We are dedicated to building focused communities of professionals and high-net-worth individuals who consume our high-quality content across multiple platforms – including print, online, social media, mobile, email and events – and providing numerous opportunities for our clients to access, connect and engage with these audiences.

vitessemedia.com

Authored by Praseeda Nair, Owen Gough, Juliet Rogan, and Chris Rea.Based on interviews with entrepreneurs, investors and industry commentators.

Acknowledgements



https://entrepreneurs.barclays/


http://www.growthbusiness.co.uk/

https://vitessemedia.com



Farfetched and Improbable: Why European venture capital is now larger than life

Venture Capital Stars

Are H1 2017’s recording breaking deals a sign of things to come, or just one-offs? Praseeda Nair speaks to top investors on what they look for when they invest in the hottest up-and-coming sectors in technology.

Between the £389 million raised by cloud computing software firm Improbable, and £313 million secured by fashion tech

platform FarFetch, the first half of the year has propelled the UK investment scene firmly back into the global spotlight. These are two of the biggest deals on record in the UK, and top investors seem divided in opinion on whether these are rare breeds among Europe’s double-

digit series A to C deals, or simply the new norm.“The ARM Holdings and Skyscanners of

this world have revealed a regular pattern from Europe. But it’s an incredible set of circumstances that leads to deals like Improbable, which is probably a one-off,” says Laurence Garrett, partner at Europe-wide Highland Ventures. “But £500 million is big in anyone’s book.”

FarFetch is a global online marketplace for independent fashion boutiques as well as major designer brands. The site has clothing for both men and women. FarFetch has raised £516m over 8 fundraisings.

Improbable is developing cloud computing technology supporting large scale virtual reality, with applications for gaming, defence, transportation, health and finance. Improbable has raised £423m over 4 fundraisings.

Founded: 2007 Investment date: 22 June 2017Investment amount:

£313m Investor: JD.com

Founded: 2012 Investment date: 11 May 2017 Investment amount:

£389m Investor: SoftBank CapitalIntroduction on Farfetch deal, Improbable deal.

Entrepreneurship beyond bordersFor Garrett, the it goes beyond viewing UK deals in a vacuum. The success and failing of each city in Europe have a deeper impact when viewed in the context of the wider European start-up ecosystem. “I view Europe as a whole, and tend not to break it up into London and the golden

triangle versus Berlin, Paris, Barcelona, and the Nordics. As a whole, Europe is doing well,” he says. “The world of finance is incredibly fluid. Just

as you’ve seen with Softbank, investors are investing across the world. It’s pretty dangerous to view (deals) city by city. Our aim is to do the



https://improbable.io/

https://www.farfetch.com/uk/

http://www.hcp.com/

https://improbable.io/

https://www.farfetch.com/uk/



best deals we possibly can for our investors, and you’ve got to look far and wide to do that. You can’t just look at one city or one geography.”As for cluster-based rivalries, Garrett believes

it stems from competition within the venture capital world. “I think it’s driven by some of the VCs and the politics. I don’t think the entrepreneurs look at their business from a city by city perspective; far from it! Quite a lot of companies we’re backing have operations out of the UK, in places like Poland, Portugal, Germany, Singapore, the US, and so on.”“What the Hello Freshes of the world prove

is that you’re still going to see significant companies being created from Europe. I’m delighted to see serial entrepreneurs coming back. The maturity of the European market is terrific. I’ve been doing this for 20 years now and it’s good as I’ve ever seen it.”For BGF Ventures managing partner, Simon

Calver, the likes of Improbable and FarFetch foreshadow a potential renaissance for entrepreneurship. “Well, I’m hoping there’ll be more of them,” he says. “In my personal experience with LoveFILM, I’ve seen a lot of successful people come out of that sale, and they’ve gone on to build even more successful firms, like graze, Zoopla, Tails.com and so on.”

Fuelling a self-sustaining ecosystemCalver believes the next wave of entrepreneurs and investments will fuel the UK and European ecosystem. “The more successful companies we build, the more we’ll create an ecosystem that will drive further success. We’ve seen this

in clusters, like in the Valley, and we’re seeing critical mass in London, and critical mass developing in Scotland with the likes of Fanduel and Skyscanner,” he adds. “In Manchester, we’re seeing clothing and

fashion boom, and a lot more activity in the west country. In Cambridge, we’re seeing the effects of the ARM Holdings acquisition already. New money is going in and fuelling the infrastructure there. We need to spend more time in these clusters to create the next wave coming through. They’re not one offs. This is just the beginning.” But for longevity and true profitability, it’s

crucial to let these clusters that make up a wider entrepreneurial ecosystem flourish organically, says Highland Ventures’ Garrett. “I’ve heard a lot of people doing the Silicon Valley comparison, and I think it’s ridiculous! Within America, the East Coast doesn’t try to do what Silicon Valley is trying to do. It’s a bit out of whack, the Valley,” he explains. “We try and build companies with long,

sustainable futures, that ultimately have good profitability with unit economics in their business model. We’re lucky to be a part of that. I think we can repeat that, time and time again in the European context. It isn’t really what Silicon Valley is about. I don’t think the comparison is healthy.”If any cluster in the world could rival the

Valley, Garrett believes it’s China. “China’s got a chance, but nowhere in Europe is going to have the concentration of people, finance, and tech giants that Silicon Valley has. Let’s be clear. Silicon Valley is like the whole of the UK being



https://www.bgf.co.uk/ventures/



dedicated to technology, in terms of scale.”Europe’s own brand of growth is just as healthy

and robust, he adds. “We’ll never replicate what the Valley is doing, and that’s ok. European venture capital already punches well above its weight and will continue to do so.”There’s a long track record of Europe

delivering great companies, but it’s not the same concentration of Silicon Valley, says Garrett. “European companies take on one-sixth the financing than companies in the Valley, and produce one-sixth the revenue as those companies in the Valley. So we’re ahead in terms of capital efficiency.”

A recipe for long-term success“For venture capital, it’s important to be humble in approach, and always know that you don’t know enough. In some cases, venture capital has to be the responsible voice of reason,” says Albion Capital managing partner, Patrick Reeve.Citing Uber’s Marmite CEO, Travis Kalanick,

and the ride hailing app’s biggest investor Benchmark, Reeve explains why investors sometimes have to make the hard choices. The battle over the future of Uber heated

up in August, as a court in Delaware decided whether Kalanick should stay at the helm of the multibillion dollar company. The unprecedented lawsuit of founder versus

venture firm raised many eyebrows in the investor community, but Reeve sees this as a prime example of good corporate governance. “Have you seen Travis Kalanick? He spoke at an event at the Institute of Directors a while ago. He comes across as arrogant and hypocritical, and was sitting there talking about how Uber is the future of green transportation. It’s not. It’s a taxi app,” says Reeve. “Benchmark’s opposition of Kalanick’s leadership to me is a positive slant on how venture capital can and should encourage decent governance.”This is why Albion Capital relies on two main

factors, likeability and decency, when deciding on whom to back, he explains. “We only back people we like. Any relationship with one of your companies could be quite long; at least 10 years or so. It also involves quite tricky conversations about strategy, and you can’t have those difficult conversations with certain people. I would never, ever in a million years have backed Travis Kalanick.”The other factor, decency, is fairly obvious, he

adds. “It’s just about backing people who try to do the right thing.”Albion’s portfolio is testament to that ethos,

with companies like Abcodia, the lifesciences firm taking on cancer research, to Quantexa, technology tackling financial fraud; all working towards solving very real problems in the world today.

Trends in technologyThere are a number of AI and machine learning companies being funded in the last few years, says BGF Ventures’ Calver, which is why the firm is looking for a point of difference rather than more of the same. “Where we’re seeing quite interesting development is in the cyber security tech space. Companies are reaching different level of maturity than before. For example, we’ve invested in AimBrain, which provides facial recognition, voice and behavioural recognition. It’s now more about showing real traction and real customers, rather than just the concept of it.”On the back of these developments, Calver

has noticed almost a throwback to traditional technology. “It’s not only about software solutions now, but also hardware solutions. For example, with cyber security, we’re seeing companies that create virtual hardware based firewalls as an added level of protection. We’ve invested in a company called Garrison in that area too.”

Biggest deals

BrewDog£100m

FarFetch £313m

Gigaclear£111m

Improbable£389m Gryphon Group

£180m



https://www.albion.capital/



Other areas of note now include medtech, he adds. “There are very broken models in how care is provided in some areas, so we’re beginning to see some interesting developments in medtech as well,” he adds, citing another of the firm’s investment, Scottish start-up Caresourcer, which is a marketplace for connecting people who need care with care homes. “We’re also looking at genomics, but that’s early-stage in our thinking.” Some of the first wave of businesses in areas

like e-commerce are beginning to lose what makes them unique, Calver adds. “Unless someone has a different angle or approach, these first wave businesses are not proliferating. The next wave was apps. But apps as standalone products aren’t game-changers.”The industry is beginning to return to deeper

technology and more integrated platforms that have greater understanding and insight; almost like ‘tech as a service’. He imagines technologies like AI will become

a commodity service within tech companies, rather than functioning as companies in their own right. “It’ll become more a platform or toolkit people can use. There’s going to be a lot of consolidation over time to a few players.”

Brexit: boon or bane?The future can seem murky at the best of times in the investment world, but for Albion Capital’s Reeve, Brexit marked a lingering sense of uncertainty, the ripples of which will be felt for years to come. “I can see a trainwreck coming quite visibly

in a couple of years’ time, perhaps followed by a change in government and an increase in political uncertainty; which is never good for business,” says Reeve. “Things are going to become tricker. We need to concentrate on businesses that focus on international markets, and are insulated from domestic chaos.”Reeve also expects increased competition

from international investors interested in UK companies. “It’s easier for businesses to raise finance in their home markets, but competition isn’t always a bad thing.”Highland Ventures’ Garrett remains optimistic.

“I think London has bucked the trend quite well. People don’t really know what’s going to happen with Brexit. It’s still 2x Berlin in the first half of the year, with around 550 deals worth over £1.8 billion. Berlin has a lot less deals at half that value. On the whole, Berlin is going well, Paris is going well, and we love Barcelona.”




Patrick Reeve Managing partner: Albion Capital

Simon Calver Managing partner: BGF Ventures

“Our focus is where the world is changing and where will result in growth, and ultimately, where the growth will result in value. A lot of time goes into thinking about these areas of growth and how to measure value,” says Albion Capital managing partner Patrick Reeve.

“Once you’re deep within a sector, on boards of many companies within a space, you see everything in 3D. You build a sophisticated ecosystem. We’ve got an advisory council, made up of people with different skills. This is what gives rise to new ideas.”

Over at two-year-old BGF Ventures, managing partner, Simon Calver talks about building a robust and scalable venture firm. “We’ve just completed our second year at BGF Ventures, and have are continuing to add to the portfolio while expanding the team. Wendy Tan White is joining us from Entrepreneur First, bringing the partnership to four. We’re looking to build fantastic opportunities for great companies

out there we can help scale and grow,” he says.With 20 deals under its belt, BGF Ventures

has invested nearly £60 million and is looking to continue this a-deal-a-month pace.“On average, we’re focused on the series

A space (investing between £1 million and £6 million) and are finding good companies there,” he adds.

“Highland is focused on the growth sector, so companies that are raising over £10 million. For example in the first half of 2017, we had a £35 million deal for Lovecrafts in London, selling crochet knitwear and all of the patterns and advice that go along with that. We also co-led the Starleaf £40 million deal,” he adds. The Cambridge based video conferencing company is one of the bigger fundraising deals led by Highland Ventures in 2017, which admittedly had been a pretty busy year so far. “On the exit side, which is the other side of

the coin, we’re having a terrific year so far in

Barcelona, with the sale of Socialpoint at $250 million. It gave us a great return in 2.5 years,” Garrett adds. As a firm, Garrett explains that the strategy

has always been ‘low volume, high quality.’ “We add value in the growing of management teams and operations to execute and deliver great sales and profitability,” he says.“The VCs out there are all shooting for 10x,

but we expect a lower loss ratio than venture capital, and slightly more modest returns like 5x or even 3x returns, with a lower loss ratio.”

Laurence Garrett Partner: Highland Europe



https://www.albion.capital/

https://www.bgf.co.uk/ventures/

http://www.hcp.com/


Venture capital: Driving growth in the UK

The past decade has witnessed a dramatic growth in the number and types of investors helping businesses at all stages of their

development. The UK sits firmly at the centre of this trend. One particular area of investment growth is Venture Capital (VC) firms, which have been the catalyst for prosperity for many exciting new companies, and form a vital part of the nation’s economic infrastructure.

The investment landscapeThere are five main categories of investors for entrepreneurs looking for equity.

1. Angel investors – individuals who invest their own personal wealthSome angels are former entrepreneurs, while

others have built or inherited wealth from elsewhere. They tend to invest at the earlier stages of a company’s lifecycle and often employ a less formal approach to investing, both in terms of their appraisal of the business and the formality of the cash injection’s terms. They often come in hosts, pooling their resources in investment clubs that either come together at

loosely organised, occasional gatherings or as tightly coordinated groups. This helps them make a larger impact on the businesses they fund, while also sharing the risk.

2. Crowdfunding – platforms that pool together relatively small investments from a large number of individualsCrowdfunding takes several forms. Equity crowdfunding is the online offering of private company securities to a group of people for investment. Debt-based crowdfunding, also known as peer-to-peer (P2P) lending, provides funding to individuals or businesses through online services that match lenders directly with borrowers. Rewards-based crowdfunding raises capital online in return for specific non-financial incentives.

3. VC funds – structured limited partnerships investing with a view to generating large returnsFunds are raised from a set of limited partners

(e.g. wealthy individuals, university endowments and pension funds), which are then invested into a portfolio of innovative companies. As general partners, venture capital funds are contractually

The venture capital landscape in the UK is booming, with more companies than ever securing funding to innovate and grow, helping to stimulate the UK economy. Juliet Rogan, Head of High Growth & Entrepreneurs Coverage at Barclays, explains the options available.

Inside insightVenture Capital Stars





obliged to return the capital and proceeds within a set timescale, often 7 to 12 years.

4. Corporate VC – established corporations investing in innovative start-upsParent corporations provide capital for

investment, varying from an ad hoc, deal-by-deal basis through an annual budget allocation to a multi-year, designated pool of money. Different VC units within the corporation can have their own investment objectives. Some exclusively look for high returns, while others seek a balance with the strategic objectives of the parent corporation (e.g. technological co-development and joint commercialisation).

5. Accelerators – collaboration-based programmes that offer mentorship, work space and technology in return for equityAccelerators give expert advice plus practical

and technical support, but to gain access to this, companies will often have to go through robust application processes, and may need to have already secured some funding. The Barclays Accelerator, in partnership with Techstars, has helped many FinTech start-ups with mentoring and guidance.

Why is VC important?VC funding is an important route for fast-growing companies and The UK’s strong VC scene has created a fertile environment for disruptive tech companies and is likely to become even more critical in the years ahead. Today, it is a popular choice for the FinTech, enterprise technology, e-commerce, property and travel sectors. In recent years, entrepreneurship has gone

mainstream – people are dreaming up ideas at their desks, trying to start new initiatives and looking to disrupt the status quo. They’re becoming less fearful of failure – a shift in mindset that has been in the US since the advent of Silicon Valleythis bodes well for an uncertain future.

How Barclays is supporting the entrepreneurial landscapeAs banking partner to some of the most disruptive and innovative companies in the UK, we understand the entrepreneurial landscape and the core ingredients needed in order to thrive. We offer a unique blend of transactional banking and lending services, complimented by our knowledgeable and experienced relationship managers. We open up the Barclays network to our partners via initiatives, workshops, conferences and networking opportunities – all invaluable experiences for founders.We have built a network of dedicated high-

growth experts across the UK, who support businesses with their deep understanding of the entrepreneurial journey and landscape. Through our Venture Capital Coverage Unit, we aim to use our expertise to support the businesses they’ve invested in to achieve the highest levels of success.We have also created venture loan products

to help support fast-growing, equity-backed businesses before they’ve broken even, in addition to our extensive range of more traditional lending products. We currently have a fund of £200m available for venture debt for Series A, B and C stage companies to help promising businesses scale up.

About Juliet RoganJuliet Rogan leads a national team of High Growth Relationship Directors, focused on supporting companies scale from start-up to exit. Over the past six years, Juliet has worked across Barclays Corporate and Investment Banking, specialising in the Technology, Media and Telecoms Sector and played an integral role in building Barclays’ high growth franchise and venture debt product. Previously Director for Barclays’ Technology, Media and Telecoms team, she has worked with a portfolio of some of the most exciting tech companies in London. She joined Barclays in 2010 after qualifying as an accountant at KPMG.

Inside insightVenture Capital Stars





Has crowdfunding peaked? Owen Gough crunches numbers and speaks to some of the most active crowdfunders in the market today to find out.

The convenience and ubiquity of the internet has given rise to a new trend of investment in the shape of crowdfunding.

Alternative finance has become the go-to option for businesses looking for funding. In the last two years equity-based crowdfunding has grown by almost 300 per cent.However, the question still remains: Is

crowdfunding the new powerhouse of business growth?Deal numbers suggest that the short answer is

“yes”. Beauhurst H1 2017 data shows that deal

numbers from crowdfunding platforms were up slightly (2.6 per cent) from H2 2016, but have seen a decline in the last few months by 18 per cent. Does this mean that crowdfunding was simply

a flash in the pan? Emily Mackay, CEO of TAB firmly doesn’t

think so. TAB is an analysis platform that draws in messy, inconsistent data from hundreds of platforms globally. TAB Dashboard visualises that data to enable exploration of the data.

Mackay thinks that, because crowdfunding is online, the process can be faster than offline/banking. With the opportunity to offer new cash flow opportunities (eg selling invoices), she thinks it can help build a community of evangelists or customers. Crowdfunding also represents a more transparent, efficient tech reaction to the credit crisis by offering online marketplaces for funds and raisers to transact, which has philosophical appeal.Mackay says, “I believe that the future of

investing will be dominated by crowd funders, but the industry is rapidly evolving. Achieving even greater scale is necessarily drawing in larger pots of money. So the sources of investment are becoming more institutional once again, albeit with direct retail investment alongside. The question is how close to recreating banking the industry will really reach.”One of the largest crowdfunders in the UK

is Crowdcube, and co-founder Luke Lang thinks that it’s only going to get bigger. Lang says, “Over £255 million has successfully been



https://www.insidetab.io/home/


invested into 519 businesses on Crowdcube since launch in 2011, and we now have over 420,000 members. The long-term trend shows that crowdfunding is now a popular and established part of the funding scene for startup and growth businesses. We’ve helped hundreds of business to secure funding from our crowd, who are able to provide not only the funds for growth, but who are also committed and passionate, and love the products of the companies they invest in.”Lang is confident that crowdfunding will

become a main outlet for businesses looking for investment, and says, “Equity crowdfunding is now firmly established as an accessible way to fund startups and growth companies - it’s now part of the mainstream with a strong track record of helping young companies grow, for instance the likes of BrewDog, Monzo, goHenry, JustPark and Chilango.”Many businesses are looking to use alternative

finance options and it’s hard to overlook the success and convenience of crowdfunding for ambitious businesses. Because of this hunger for investment, SyndicateRoom has actually seen the opposite. CEO and co-founder Goncalo de Vasconcelos

says, “The past few months (June, July and August) have been some of the best we’ve seen since launching the business four years ago. This summer, we’ve seen a continuous trend in growth, with record levels of sign-ups and investments through the platform.“Crowdfunding has become a bona fide

and first-choice route to finance for growth businesses. What’s more, in today’s low-yield environment, early stage investing offers ambitious investors long term, significant growth potential. “Crowdfunding is certainly here to stay, but

is only scratching the surface at present. We’re starting to see later stage deals on the platform, series A and beyond. In March 2016, SyndicateRoom became a member of the London Stock Exchange and the first crowdfunding platform to offer IPOs and placings on the public markets. As online investment grows, we’ll see later and later stage companies funding in this way - and platforms broadening out their scope to offer more choice.”Compounding this notion, Seedrs, another

one of the largest and most active platforms in the UK, hasn’t seen a significant drop in recent months.

Tom Horbye, senior campaigns development associate, told us that, in 2016, 159 deals were funded and more than £85 million from 45,000 investments into campaigns on Seedrs £64 million in 2015. Over £250 million has been invested on the platform since its inception.Looking into the future, Horbye says, “In

terms of long-term trends, we think more and more later stage growth businesses will turn to equity crowdfunding to top up their rounds and deeper customer engagement and advocacy, potentially even used as part of a customer retention strategy. Revolut, who just raised £3.8 million on Seedrs from over 4,200 investors as a part of its £50 million series B, is a prime example of this. The crowd, greatly consisting of Revolut’s own customers, invested in Revolut’s series B alongside Index Ventures, Balderton Capital and Ribbit Capital.”Clearly, giving the opportunity to invest in

the products they love is something that the customer has been craving and crowdfunding scratches that itch, giving businesses that might not have survived a chance to flourish. So have we answered the question then? Will

crowdfunding dominate the investment market?The general consensus appears to suggest

that it is here to stay and that we are simply in the brink of a deep well of investment opportunities.

Biggest crowdfunding deals in Q1 2017

£3.3m Lightpoint Medical

Monzo

Cocoon

Gripit Fixings

Idio

£2.5m

£2.4m

£2.1m

£1.9m

March 2017 VentureFounders

March 2017 Crowdcube



March 2017 VentureFounders




https://www.crowdcube.com/

https://www.syndicateroom.com/

https://www.seedrs.com/


Breaking the biggest equity crowdfunding misconceptions

There are a few equity crowdfunding misconceptions that can mislead and confuse those considering it as an option. In fact,

equity crowdfunding can be an excellent way of raising money for a business. Yet, it isn’t a superb solution for every businesses, not in the least because of common misconceptions.

1. The crowd is all I needIf only! As well as sending out stories to generate PR and creating an awesome pitch, entrepreneurs need to make contacts, customers, friends and family aware of their campaign.Ever noticed how no-one seems to like

being the first to arrive at a party? Well, equity crowdfunding’s a bit like that. Investors who’ve never heard of your business might be impressed by your pitch, but many won’t part with their cash until you’ve reached a reasonable amount of your investment target. That’s because they want to see that you have a reasonable chance of reaching your target before they’ll invest in your campaign. This is perhaps the biggest of all equity crowdfunding misconceptions.

2. Capital is the only benefit from equity crowdfunding Not entirely true. Although the prospect of raising money for a business is the main objective of crowdfunding, there are other benefits:• Engaging with existing customers.• Acquire new potential customers• Creating evangelists who’ll spread the word

about your brand.• Gaining valuable feedback on how to develop

the product/service.• Hearing what new services/products

customers would like you to offer.

3. Managing lots of small investors is time-consumingYes and no…. it depends on the platform you choose.If the platform you choose doesn’t have a nominee

structure, you could end up having lots of investors on your cap table, which can mean a lot of work, especially if you need consents at a later date.However, if the platform does have a nominee

structure such as the one Seedrs uses, the funded company only has one shareholder to deal with. So, there isn’t a large cap table to put off VCs further down the road.

Chris Rea, Senior Campaigns Manager at Seedrs banishes the nine biggest crowdfunding misconceptions entrepreneurs and potential investors may have.

Inside insightCrowdfunding Growth Stars




Inside insight

4. Crowdfunding platforms don’t attract angelsProbably the craziest equity crowdfunding misconceptions of all. It’s just not so. On Seedrs, traditional angels, venture capitalists (VCs) and general members of the crowdfunding public are all welcome to co-invest – and they do. In fact, they look to the platform for access to deals that they may not have had access to. Angel investors are particularly welcome because they can provide more than funding, such as their expertise in taking a business to the next level, which can be invaluable to long-term success.

5. If I use a crowdfunding platform, I’ll put off VCs and institutional investorsIf the capital that you raise is invested wisely, it

could put your business in a stronger position if you decide to go for an institutional round at a later date. And, many VCs will see a successful crowdfunded round as a positive validation of your business.In fact, many of the companies that raise on

Seedrs have gone on to raise further rounds either exclusively with a VC or in tandem with the crowd again. For example:• Landbay received investment from Zoopla• Adludio from Passion Capital and Episode 1• Perkbox raised alongside Draper Espirit.

But if you don’t have a clear structure in place (such as a nominee at Seedrs) to manage your shareholders, they might be more adverse to investing in your business.

6. Businesses crowdfund because they can’t raise capital from VCs or angels Equity crowdfunding has a track record of funding serious, growth-focussed businesses. It’s not a last resort. It’s also now commonplace for VCs to diversify their portfolios by investing this way, for instance:• Blow secured Unilever Ventures whilst raising

on Seedrs.• Maily had Faber Ventures co investing in their

Seedrs round.• Beeline’s crowdfunding co-investors were

Seedcamp and TrueStart.

7. The crowd is ‘dumb money’This is probably the most insulting of equity crowdfunding misconceptions. The crowd is a diverse and savvy bunch, just go onto the Q&A section of any campaign to see the discussions.

In fact, the top five investor professions on Seedrs are:1. Finance.2. Investment funds.3. Self-certified angel investors.4. Business founders.5. Legal professionals.

Many investors work in business daily and know how to value early-stage businesses and appreciate the risks involved with investing in this area.

8. Businesses looking to raise from the crowd are overvaluedIt’s important to remember that a business’s valuation is very subjective. If anything, valuations on crowdfunding sites are more transparent, open and fair because it’s the crowd investors who decide whether the valuation seems accurate, and if the business is worth investing in.

A common reason for a campaign not hitting its target is because of a hyper-inflated valuation. As we’ve already established, the crowd are sophisticated, they know whether a business is trying to pull the wool over their eyes and if they don’t like what they see, they won’t invest.

9. Crowdfunding is an easy way to get investmentIt’s not a case of creating a campaign, sitting back and watching the money flow in. It takes dedication, creativity, team engagement and time. At Seedrs, we aim to make the process quicker and more efficient than it is offline. But, it still takes work to get it right and to make the most of the opportunity.Crowdfunding can be a brilliant way to get a

business funded and turn dreams and targets into reality. But, it’s crucial that you see past the equity crowdfunding misconceptions and understand the realities of raising if your campaign is to be successful.

About Chris ReaChris Rea is Senior Campaigns Associate at Seedrs. He is responsible for finding the hottest new startups to raise on Seedrs. He previously founded YoungOnes Apparel and appeared on Dragons’ Den before joining Seedrs.

Inside insightCrowdfunding Growth Stars




Who are the British Growth Stars?

The first half of 2017 has broken the mould. In this period, British high-growth businesses received a record amount of funding,

catapulting the likes of FarFetch, Improbable and BrewDog onto the global stage. UK investment into these growth companies has

been consistently ticking along, but investment from abroad has given the biggest boost for British businesses in recent years. In the first half of 2017, the number of deals involving non-UK funds

rose 26.7 per cent from the previous quarter.Sectors that have seen the biggest injection

of funding include IP-rich, R&D heavy fields like medtech and pharmacology, as well as digital challenger banks within the fintech umbrella.Based on comprehensive data from Beauhurst,

we have compiled a snapshot of the most promising businesses in three phases of development: seed, venture, and growth.


A definitive guide to the most promising businesses at varied stages of growth




Seed stage stars


A snapshot of the most promising businesses that have raised funding at seed stage in the first half of 2017.

Total deals:

1328Total amount raised:

£731mAverage pre-money valuation:

£1.8m

Average stake taken:

15.4%

Average deal size:

£564k

Seed stage stars

Company Location Amount raised Date

Gryphon Group London £180m June

GammaDelta Therapeutics London £27.5m May

kwiff London £17.3m March

ApcinteX London £14m February

Renegade Spirits London €14.4m (£12.2m) April

Roslin Technologies East of Scotland £10m May

Madison Sports Group London £9.21m June

Macrophage Pharma South East £9m January

SuperX East of England $11m (£8.8m) February

Congenica East of England £8m February

Z-Factor East of England £7m May

Bioturbines South East £6.67m March

Zeetta Networks South West €7.8m (£6.62m) May

Bad Wolf Wales £5.18m March

Neos London £5m May

Renegade Spirits London £5m April

G. Network London £4.6m June

Redux East of England $5m (£4.01m) April

A Cloud Guru London £4m May

SpyBiotech South East £4m March




Business Growth Stars Seed stage stars

Gryphon Group Holdings Limited was founded as an insurance challenger that seeks to protect more families in the UK.

Founded: 2016Investment date: June 2017Investment amount: £180mEquity: UnknownInvestor(s): Punter Southall Group; Leadenhall Capital PartnersFounder(s): Daniel Pender (CEO), Simon Davis (COO)

Gryphon Group Holdings is an insurtech start-up founded by seasoned insurance professionals motivated to tackle some of the industry’s key challenges. Its co-founders are chief executive officer, Daniel Pender, former executive director at Prudential and UK Life chief financial officer at Zurich; and chief operating officer, Simon Davis, former chief risk officer at Guardian and corporate services director at Admin Re.“The insurance industry plays a pivotal role

in our society but there is work to be done to keep pace with the evolving needs of customers and advisers. We felt there was a tremendous opportunity for an insurance challenger to build a business around the people it serves, and in doing so, establish strong long-term relationships built on trust,” CEO Daniel Pender said.“We are creating what we think protection

should look like in today’s digital age. Technology has moved on remarkably and our ambition is to embrace that, bringing an intuitive customer offer and adviser experience to market. This will give certainty to advisers when recommending our products and enable families to feel confident that we can offer the insurance that they need.”Advised by Craven Street Capital Limited,

Gryphon Group Holdings has raised £180 million in

funding from investors Leadenhall Capital Partners and Punter Southall Group. “Life protection is an area where good customer

outcomes are vital, making a service focussed challenger an exciting proposition,” said Dan Knipe, life portfolio manager, of investors Leadenhall Capital Partners. “We see strong growth potential for the business as the management team have a deep commitment to their vision and bring significant industry and technology expertise to make it a success.”The insurtech company believes its high-tech

approach will differentiate it in the market. The infrastructure will be based on digital and cloud based technologies, built with the support of a number of leading partners. The core platform technology partner is Liss Systems, a UK company owned by Nasdaq-listed technology group, EXL. The digital interface technology partner is Space.“We already know there is a significant protection

gap in the UK. This translates into a great opportunity for an insurance company that can solve the issues of customer trust and adviser experience,” Jonathan Punter, CEO, of investors Punter Southall Group, said. “This company, with its new approach, will be well placed to meet these challenges head on.”

“We are creating what we think protection should look like in today’s digital age.”

Inside track



http://www.gghltd.co.uk/

http://www.gghltd.co.uk/



GammaDelta Therapeutics is developing the potential of gamma delta cells to create improved immunotherapy of cancer and other serious diseases. The company plans to exploit unique properties of tissue resident gamma delta T cells for effective immunotherapy.

Founded: 2016Investment date: May 2017Investment amount: £27.5mEquity: 57.3%Investor(s): Takeda Pharmaceutical CompanyFounder(s): Adrian Hayday (Scientific founder); Oliver Nussbaumer (Head of cell research)

GammaDelta Therapeutics formed a strategic collaboration with Takeda Pharmaceutical Company to develop its T cell platform. The companies intend to use this novel platform to discover and develop new immunotherapies, with the aim of treating a broad range of cancers, including solid tumours, and autoinflammatory diseases.GammaDelta Therapeutics is an Abingworth

portfolio company, that had previously raised £800,000 in seed funding from Abingworth, The Francis Crick Institute, King’s College London, and Cancer Research Technology. “The pioneering research developed by Professor

Adrian Hayday and Dr Oliver Nussbaumer at King’s College London and the Francis Crick Institute, the scientific founders of our company, forms the basis for the development of potentially transformational treatments for cancer and autoinflammatory diseases,” said CEO of GammaDelta Therapeutics, Dr Paolo Paoletti, MD.“We believe the collaboration with Takeda

validates our novel approach and should allow us to move rapidly to the clinic.”Takeda, together with Abingworth, will commit

up to $100 million in funding to accelerate GammaDelta Therapeutics led research and

development. The funding includes an equity investment, an option fee and research and development funding, and provides Takeda the exclusive right to purchase GammaDelta Therapeutics. Under the agreement, Takeda will appoint a director to GammaDelta Therapeutics’ board. “At Takeda, we recognise the enormous potential

of tissue resident gamma delta T cells to deliver transformative medicines in our core therapeutic areas of oncology and gastroenterology,” said Daniel Curran, MD, head of the Center for External Innovation at Takeda. “This collaboration is another example of our strategy to invest in highly innovative areas of science and we’re pleased to collaborate with the experienced team at GammaDelta Therapeutics as they aim to take a leadership position in this rapidly emerging field.”“We are delighted by the progress GammaDelta

Therapeutics has made since we founded the company in 2016,” said Tim Haines, managing partner at Abingworth and a director at GammaDelta Therapeutics. “This collaboration with Takeda will enable the company to advance the development of this exciting technology, which has the potential to address significant unmet needs in cancer and autoinflammatory diseases.”

GammaDelta Therapeutics formed a strategic collaboration with Takeda Pharmaceutical Company to develop its T cell platform to discover and develop new immunotherapies to treat a broad range of cancers.

Inside track



http://www.gammadeltatx.com/

http://www.gammadeltatx.com/



ApcinteX Limited, a University of Cambridge spin-out company, is developing a new therapy for haemophilia.

Founded: 2014Investment date: February 2017Investment amount: £14mEquity: 61.5%Investor(s): Medicxi Ventures; Touchstone InnovationsFounder(s): Trevor Baglin, Jim Huntington

In a series A round, ApcinteX raised £14 million, co-led by Medicxi Ventures and Touchstone Innovations Group plc. Cambridge Enterprise helped in ApcinteX’s formation, licensing key intellectual property to the company.ApcinteX is seeking to disrupt the $10 billion

haemophilia market by developing a drug that can be used in all patients, regardless of the type of haemophilia. This new treatment is based on the work of Professor Jim Huntington (Cambridge Institute for Medical Research) and Dr Trevor Baglin (Cambridge University Hospitals), world-renowned experts in blood clotting disorders.Around 400,000 individuals in the world are

affected by haemophilia, a genetic disorder that causes uncontrolled bleeding as a result of patients having a deficiency in proteins required for normal blood clotting. Apcintex has developed a new treatment that aims to treat patients with all types of haemophilia, including those who develop antibodies to replacement factors. Furthermore, the drug does not cause anti-clotting antibodies to form and could be administered fortnightly by simple injection under the skin.

“Bearing in mind that the majority of people in the world with haemophilia have no access to effective therapy, a stable, easily administered, long-acting, drug that can be used in all patients, regardless of the type of haemophilia, could bring treatment to a great deal many more people who suffer from haemophilia,” Dr Baglin commented.Currently, the standard treatment is

administration of the missing clotting factor, but this requires regular intravenous injections and is not completely effective. In addition, about one quarter of patients develop inhibitory antibodies to the administered clotting factor which renders further treatment ineffective.“We are delighted to be supporting this funding

round which is in many ways a classic example of our model: backing outstanding research which has the potential to translate into differentiated products for patients in a substantial global market. We believe that ApcinteX has the potential to provide a better alternative,” Dani Bach, director of healthcare ventures at Touchstone Innovations commented.

ApcinteX is seeking to disrupt the $10 billion haemophilia market by developing a drug that can be used in all patients.

Inside track

ApcinteX




Venture stage stars


A snapshot of the most promising businesses that have raised funding at venture stage in the first half of 2017.

Total deals:


£1.29bAverage pre-money valuation:

£8.55m


14.3%

Average deal size:

£1.68m

Venture stage stars


Orchard Therapeutics London £45.7m March

Bicycle Therapeutics East of England £40m June

MiNA Therapeutics London £35m May

NightstaRx London $45m (£34.6m) June

afforditNOW North West £24.5m June

Pulmocide London £24m March

NeRRe Therapeutics East of England £23m January

Inivata East of England £21m January

Monzo London £19.5m February

Roborace London £17.8m March

CompareEuropeGroup London €20m (£17.4m) January

DiffBlue South East £17m June

Smart Pension London £15m June

MIRACL London £12.3m June

Yoyo Wallet London £12m June

Garrison Technology London £12m June

Ecrebo South East £12m February

VST Enterprises North West £11.4m May

Flat Iron London £10m March

Blu Wireless Technology South West £10m February





Monzo (previously Mondo) is a ‘digital challenger bank’ based in London, aimed for smartphone savvy consumers.

Founded: 2015Investment date: February 2017Investment amount: £19.5mEquity: 27%Investor(s): Orange Digital Ventures; Passion Capital; Thrive CapitalFounder(s): Gary Dolman, Tom Blomfield, Paul Rippon, Jonas Huckestein, Jason Bates

Digital challenger bank, Monzo, raised its series C round through a mix of venture capital and crowdfunding, securing a total of £22 million, including a £19.5 million investment from Thrive Capital, Passion Capital and Orange Digital Ventures. Monzo broke funding records once again on

Crowdcube, raising £2.5 million and attracting more than 6,500 investors in its latest fundraise. This is almost doubling the previous record, which it had set in March 2016 when it raised £1 million in just 96 seconds, the fastest funding round ever.Monzo currently operates as a pre-paid card

service with a linked app. This latest funding round will help the Old Street start-up launch a full current account. Deals involving institutional investors, like VCs

and banks, raising money alongside the crowd have increased four-fold on the Crowdcube platform in the last two years. The Monzo raise follows in the footsteps of companies like POD Point, which recently raised almost £1.6 million in a round that also attracted investment from VC firm Draper Esprit, and stock market investment platform Freetrade.

Inside track

The challenger bank previously raised £1 million in a record-breaking 96 seconds on Crowdcube.



https://monzo.com/

https://monzo.com/



Yoyo Wallet is a mobile wallet start-up that lets users to pay for their goods with their smartphones.

Founded: 2013Investment date: JuneInvestment amount: £12mEquity: UnknownInvestor(s): Metro Group; Touchstone Innovations; Woodford Investment ManagementFounder(s): Dave Nicholson, Alain Falys, Michael Rolph

Yoyo Wallet, an app that allows shoppers to make payments and earn loyalty rewards, raised £12 million, bringing total investment in the UK start-up to around £24 million.The latest series B round was led by wholesale

and food retail firm Metro Group, asset management company Woodford Investment Management, and tech investor Touchstone Innovations. The start-up recently passed the milestone of

processing more than 1m monthly payments for its 400,000 registered users. It has grown rapidly since its creation four years ago as a mobile app to pay for goods in university student unions. The app is used to handle payments in 1,700

outlets, including over 60 UK and Irish universities; the canteens of several big companies such as JPMorgan Chase; and retailers such as Caffè Nero and Planet Organic. Yoyo Wallet allows consumers to pay for goods

using their mobile phone and keeps all their loyalty card schemes updated automatically. Companies on the platform can track customer behaviour and can send personalised offers to them via the app.

“We address a fundamental problem for retailers — they want to know their customers better,” said Alain Falys, former Visa executive and Yoyo co-founder.“We have combined the best of Starbucks

mobile experience with the advantages of Tesco’s Clubcard scheme.We democratise the privilege of the very biggest chains like Walmart and Tesco for all the retailers and small boutiques.” While banks cannot drill down purchasing data

to tell retailers what products a customer bought, Yoyo Wallet can. It also allows retailers to build a profile of each client. The latest fundraising will be used to finance the

company’s expansion in the US. Hansjörg Sage, general manager at Metro

Group’s digital unit, said: “We intend to work with Yoyo, leveraging its considerable success in the UK, to help tailor and market its offering to the continental European market and in particular, the long-tail of independent entrepreneurs.”Its latest fundraising was also backed by

Touchstone Innovations, the Aim-listed venture capital arm of Imperial College London.

“We have combined the best of Starbucks mobile experience with the advantages of Tesco’s Clubcard scheme.”

Inside track



https://www.yoyowallet.com/



Growth stage stars


A snapshot of the most promising businesses that have raised funding at growth stage in the first half of 2017.

Total deals:


£2.51bAverage pre-money valuation:

£45.4m


12.3%

Average deal size:

£6.76m

Growth stage stars


Improbable London $502m (£389m) May

FarFetch London $397m (£313m) June

Gigaclear South East £111m May

BrewDog Aberdeen £100m April

Atom North East £83m March

Funding Circle London £82m January

Claranet London £80m May

Cell Medica London £60m March

babylon London $60m (£46.8m) April

MarketInvoice London £45m May

Evans Cycles South East £39.7m April

Zopa London £32m June

Blockchain London $40m (£31.5m) June

StarLeaf East of England £31m May

Atom North East £30m June

Blue Zoo London £30m June

Atlas Genetics South West £28.3m January

LoveCrafts London £26m April

Spring Studios London £22.5m June

Tomlinson's Dairies Wales £22m May





Gigaclear is a private company dedicated to building and operating Ultrafast broadband networks based on pure fibre technology.

Founded: 2010Investment date: MayInvestment amount: £111mEquity: 31.6%Investor(s): Infracapital, Railpen, Woodford Investment ManagementFounder(s): Matthew Hare

Fibre optic broadband ISP Gigaclear has raised £111 million in equity funding to bring connectivity to 150,000 rural areas in the UK by 2020.Before the funding, Gigaclear reported that their

network was already available to 42,000 rural properties (with 10,000 active customers) around counties such as Berkshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Gloucestershire, Kent, Leicestershire, Lincolnshire, Northamptonshire, Oxfordshire, Rutland and Worcestershire.The government’s recent moves to support

alternative “full fibre” network (altnet) providers with £600 million of public funding has helped to give investors’ confidence in the market, which has also been supported by Ofcom’s move to make Openreach’s national network more accessible to the competition.“Full fibre is the future. This latest round of

investment will enable Gigaclear to step up our speed of network delivery and is a clear signal of the confidence investors have in our continued expansion and success,” Matthew Hare, CEO of Gigaclear, said.“Millions of rural homes and businesses across

the country need better broadband and we want to reach as many of those in rural areas as quickly as possible. Our pure fibre network transforms lives by providing access to the fastest internet speeds to be found anywhere in the world and technologically future-proofing these rural communities for years to come.”Existing investors, Infracapital (£60 million)

and Woodford Investment Management (£15 million), were joined by new investors, railways pension scheme Railpen (£35 million), and smaller undisclosed investors (£1 million) to raise a total of £111 million.“As a long-term investor, we see the partnership

with Gigaclear as a natural fit that will allow us to generate strong returns over time and fulfil our mission to pay members’ pensions securely, affordably and sustainably,” Paul Bishop, Railpen’s Investment Director, said. “We are also delighted that the company will

be supporting local communities by bringing the benefits of best-in-class fibre-optic broadband to homes and businesses in new parts of the country.”

“Millions of rural homes and businesses across the country need better broadband and we want to reach as many of those in rural areas as quickly as possible.”

Inside track







BrewDog is a craft beer brewery based in Scotland that produces bottled and canned beers in a variety of styles.

Founded: 2007Investment date: AprilInvestment amount: £100mEquity: 22%Investor(s): TSG Consumer PartnersFounder(s): Martin Dickie, James Watt

Scottish craft beer company, BrewDog has now reached unicorn status following its £100 million fundraise from American private equity firm, TSG Consumer Partners. In a message to shareholders, the north east

Scotland brewer said TSG had acquired 22 per cent of the business and the transaction had given it a £1bn enterprise value (equity and debt).In a message to investors, BrewDog said: “TSG

has acquired approximately 22 per cent of the company in a transaction where £100m in proceeds went into the company for continued expansion and the balance to create early shareholder equity in a transaction that valued BrewDog plc at £1 billion enterprise value.”“The deal is designed to deliver long term capital

with 10 year time horizon.”

BrewDog was founded by James Watt and Martin Dickie, who funded their business via the crowd until now. Although the founders have now warmed to the idea of institutional backing, in May, it raised further funding from the crowd. More than 50,000 beer fans who invested in

BrewDog’s crowdfunding over the years were told the deal with TSG had boosted the value of their investment by as much as 2,765 per cent.“Crowdfunding can no longer be viewed as

alternative finance; this is the democratisation of finance,” founder James Watt said in the update.In May, BrewDog received a £324,000 grant

from Indiegogo, and in August, which is out of the scope of this report, it raised $7 million at growth stage with Equity For Punks.

“The deal is designed to deliver long term capital with 10 year time horizon.”

Inside track



https://www.brewdog.com/

https://www.brewdog.com/



Atom Bank is a mobile banking application that offers a range of personal and business banking products.

Founded: 2014Investment date: March + JuneInvestment amount: £83m (equity) + £30m (debt)Equity: 28.4%Investor(s): BBVA, Toscafund, Woodford Investment Management, British Business Investments (further funding: £30m)Founder(s): Anthony Thomson

Atom Bank, a Durham, UK-based bank designed exclusively for mobile, raised £83 million in equity funding and a further £30 million in debt finance from British Business Banks’ investment arm.Backers in the equity funding round included

current investors BBVA, Woodford Investment Management, Toscafund Asset Management and others.The digital challenger bank will use the funds

to continue to expand its offering with plans to launch further products and enhancements to its app throughout 2017.Led by founder and chairman Anthony Thomson

and CEO Mark Mullen, Atom Bank secured its banking license in June 2015 and launched

operations in April 2016 by offering two Fixed Saver accounts and secured business lending for small and medium-sized enterprises.The bank recently launched its first mobile

mortgage product, allowing borrowers to manage everything via an app.From rolling out facial recognition technology to

log in, to flexible anytime-anywhere approach to banking, Atom Bank has been championing the concept of banking-as-a-service through its tech-led offering. The second funding boost came in the form

of a tier 2 eligible facility from British Business Investments (BBIL). This will help Atom draw on additional capital in a flexible manner as it grows.The £30 million capital facility is being made

under BBIL’s Investment Programme, which has so far committed over £580 million to providers of finance to UK SMEs.

“Access to tier 2 capital at such an early stage of the growth cycle is rare and we are extremely pleased to be gaining this support from (British Business Investments). Together with the British Business Bank, we are sending a clear sign – we are here to support UK SMEs,” Anthony Thomson, founder and chairman of Atom said.“This facility provides us with tremendous

flexibility. Like all banks, we are actively managing our capital structure and having access to tier 2 capital at this stage helps support our growth and is a great result for Atom, its shareholders and customers.”The facility will help support the growth of Atom

bank and its desire to lend to UK corporates and smaller businesses, a key area of focus for the government investment arm, which is looking to bridge long-standing gaps in finance markets for smaller businesses by investing in small business finance providers and promoting greater diversity in the supply of lending. “Our investment in Atom bank demonstrates

our commitment to increasing the diversity of small business finance by supporting recently licensed and ambitious challenger banks,” said Catherine Lewis La Torre, CEO of British Business Investments Ltd.“We have seen challenger banks becoming an

increasingly important source of UK SME funding and we believe a committed regulatory capital facility will not only support Atom’s growth trajectory but will also drive the bank’s ability to lend to UK SMEs.”

Atom Bank has been championing the concept of banking-as-a-service through its tech-led offering since its launch.

Inside track



https://www.atombank.co.uk/

https://www.atombank.co.uk/


BRITISH GROWTH STARS



http://www.growthbusiness.co.uk/

https://vitessemedia.com

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