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Quarterly Investment Briefing (QIB): Q1 2019


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Slides which accompanied the Q1 2019 Quarterly Investment Briefing on 6th March. The event saw presentations on Bristol Private Equity Club, the Regional Angel Investment Accelerator and University of Bristol Enterprise Fund. Slides 50 - 52 include information about those companies that have recently raised investment or are actively doing so in Q1 2019. Check out the disclaimer - these aren't recommendations, just information.

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Quarterly Investment Briefing (QIB): Q1 2019

  1. 1. Q1 Quarterly Investment Briefing Angel Investment Wednesday 6th March @EngineShed_BB #QIBriefing
  2. 2. Agenda 16:30 - 16:35 Tea, coffee, welcome 16:40 – 17:25 Sharing and learning + Jerry Barnes, BPEC + Alun Williams, Parkwalk Advisors + Rod Beer, UKBAA 17.25 – 17:35 What Beauhurst data tells us 17:35 – 18:20 Networking and drinks
  3. 3. QIB Guiding Principles Those who attend the Quarterly Investment Briefing share three common principles: • Whoever attends is an active or potentially active investor, or manager of investors – or enabler of investment activity. • Whatever is presented is informative, fact-based and regionally relevant. • We value the opportunity to learn equally with the opportunity to share.
  4. 4. Angel Investment in West of England
  5. 5. Angel Investment in West of England Main seed investment infrastructure: - Bristol Private Equity Club (BPEC) - ‘Incubators’ – RocketMakers and SimpleWeb Ventures - Whiteoak capital - Informal angel investor links – often through hubs // regional contact points Later stage - Investors in residence at Engine Shed - Warm introductions through incubators Parkwalk Investment Fund - University spinouts and SETsquared businesses
  6. 6. Jerry Barnes Bristol Private Equity Club
  7. 7. 6 March 2019 The Engine Shed
  8. 8. INTRODUCTION FOUNDERS • Jerry Barnes • Allan Rosengren (Chairman) • Mark Mason MBE • Julian Telling • Denis Mullan • Charles Cook • Heather Frankham, joined in 2018 • Jerry Barnes, CEO of BPEC • 24 Haymarket • Bristol : established in 2016 9
  9. 9. CLUB STRUCTURE • Not a fund • Local entrepreneurs • Putting back (time, money & expertise) into the local economy • We’re nice (not Dragons!) • Want to get involved? 10 PANEL EVENTS • 10 events per annum • 2 dinners with Founders • 2 businesses per panel event • Seminar style • £150 - £500K (equity only) • Local (within 1 hour from Bristol) • 5% commission DEALS
  10. 10. ACTION 2 years to 30 September 2018 • 16 deals (13 companies) • £3.6m invested (average £280K per company) 11
  11. 11. 12 6 Months to 5 April 2019 • 8 deals (6 follow-ons) • Estimate £1M plus invested No exits (yet!) And no failures either … Our Members • 75 Members • Wide range of experience
  12. 12. 13 BPEC SUPPORTS
  13. 13. IMPACT • 2016/17 Investments ; 2018 Survey • £1.75M BPEC Investment (out of £4.6M total) in 6 businesses • Grants – less than 10% of total equity • In one year; • Employment – up 110% (34 people) • Wages - £1.6M total • Bristol non-wages spend - £558K • EIS Tax Relief - £523K but PAYE/RATES - £511K • 1 year ; tax neutral • 2016/18 Investments ; 2019 Survey • Will update July 2019 (with 10 businesses) 14
  14. 14. FUTURE • Aiming for c. £2M pa Equity Investment • No stortage of proposals • No shortage of Members • Innovate Regional Bid • SETsquared led this successfully • BPEC a Partner (of many) • May 2019 launch 15
  15. 15. Questions
  16. 16. @ParkwalkAdvisor Alun Williams Parkwalk Advisors
  17. 17. Important Notice 1UoBEF III | March 2019 This document is issued by Parkwalk Advisors Limited (‘Parkwalk’) which is authorised and regulated by the Financial Conduct Authority FRN 502237. Parkwalk EIS Funds may not be suitable for all investors and as such should only be directed at the following: 1. Existing clients of a financial adviser regulated by the Financial Conduct Authority; 2. Persons who meet the criteria for being a professional client; 3. Persons who qualify as certified high net worth individuals in accordance with COBS 4.7.7(a); 4. Persons who qualify as certified sophisticated investors in accordance with COBS 4.7.7(b); 5. Persons who qualify as self-certified sophisticated investors in accordance with COBS 4.7.7(c); or 6. Certified restricted investors in terms of COBS 4.7.10. Investing in unquoted and/or AIM-listed companies (including EIS Qualifying companies) carries with it a high degree of inherent risk. Any investment in this product should be considered as a long-term investment as no established or ready market exists for the trading of shares in unquoted companies. To the extent that this document contains forward-looking statements, such statements are based on the current expectations of Parkwalk as of the date of this document and are subject to a number of risks and uncertainties and other factors that may cause the actual results, performance or achievements of a fund or the underlying portfolio companies to be materially different from any future results, performance or achievement expressed or implied by these forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements made in this document will be realised. Except as otherwise required by applicable securities laws, Parkwalk disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Rates of tax, tax benefits and allowances referred to are based on current legislation and HM Revenue & Customs practice. These may change from time to time and are not guaranteed. EIS tax benefits and reliefs depend on individual circumstances. Past performance is not a guide to future performance and may not be repeated. The value of shares can fall as well as rise and investors may not recover the full amount of money originally invested.
  18. 18. Parkwalk  Parkwalk established 2009: Capital Markets backgrounds  Largest Growth EIS fund-raise in 2017 and 2018  Focus on Hard Science UK university spin-outs and start-ups  ‘Knowledge Intensive’ businesses with strong IP and freedom to operate  Co-investing alongside other, non tax-advantaged institutional investors  Deploying within 12 months and generating cash exits  Part of the IP Group plc group - UK listed FTSE 250 net assets £1.4bn  EIS Association “Best EIS Fund Manager” 2018, 2017 and 2016 2UoBEF III | March 2019 AUM >£200m 86 current Portfolio Companies £23.5m Cash Realisations to date Over 210 investments into 100 Companies £66m invested in last 12 months
  19. 19. University Spin-Outs 3UoBEF III | March 2019 In higher education, the UK is a superpower. Four of the 10 top- rated universities in the world, five of the top 20 and 9 of the top 50 are British. QS World Rankings 2019 The University of Cambridge alone has created 15 companies in the last 20 - 25 years that have each achieved a valuation of over $1bn (two over $10bn) Business Weekly, May 2017 IP Group has arrangements with 17 of the UK’s top universities. Parkwalk manage the University of Oxford, the University of Cambridge and the University of Bristol EIS Funds. The UK punches above its weight in R&D…. UK share of global population: 0.9% UK share of article output: 6.4% UK share of researchers: 4.1% UK share of total citations: 11.6% UK share of highly cited papers: 15.9% UK number of top 200 universities: 29
  20. 20. University of Bristol Enterprise Fund III
  21. 21. The UoBEF Investment Process The Fund is a real partnership between the University of Bristol, SETsquared Bristol and Parkwalk • UoBEF III will invest in opportunities related to the University, whether the company has been founded by University staff, students or alumni or has links with the University through SETsquared Bristol. • Strong deal flow from both the University and SETsquared Bristol • The University of Bristol will be an investor in the Fund, so this is a chance to co-invest with a world-class research institution • Companies go through a two-stage screening process: • Pre-screening by the University and SETsquared staff and mentors to ensure the companies are suitable for investment and to guide them on their presentation; • Presentation to the Fund’s Investment Committee, made up of members from the University, the Bristol investment community, entrepreneurs and Parkwalk. • The Fund will invest in between 5 and 8 companies with the potential to deliver equity returns to investors • Defensibility is a key criterion for investment • Investing only when HMRC has pre-approved EIS/SEIS treatment
  22. 22. UoBEF III – EIS/SEIS Investing
  23. 23. UoBEF I and UoBEF II: Some examples of Companies the previous Funds have invested in
  24. 24. £0 £50,000 £100,000 £150,000 £200,000 £250,000 £300,000 £350,000 Micrima Exonate Nu Nano Azul Optics Boxarr UBEF I: Performance Cost Value How have the first two UoBEF funds performed?
  25. 25. University House 11-13 Lower Grosvenor Place London SW1W 0EX
  26. 26. @UKBAngels Roderick Beer UKBAA
  27. 27. 30 I N T R O D U C I N G U K B A A
  28. 28. 31 193 MEMBERS FROM ACROSS THE INDUSTRY W E L O O K A F T E R ANGEL GROUPS Over 15,000 angels represented by these groups VC FUNDS From micro funds to major PE funds ONLINE PLATFORMS And all the major crowd funding platforms ACCELERATOR S Including incubators and universities ASSOCIATES Including government agencies, royal societies, corporates and intermediaries 72 28 14 30 49
  29. 29. 32 WE DELIVER INVESTOR TRAINING T h i s n a t i o n a l , i n d u s t r y - b a c k e d p r o g r a m m e b r i n g s t h e i n s i g h t s a n d e x p e r t i s e f r o m 2 2 e x p e r i e n c e d a n d l e a d i n g A n g e l i n v e s t o r s f r o m a c r o s s t h e U K .
  30. 30. 33 SIX ANGEL HUBS, WITH MORE PLANNED FOR 2019 W E O P E R A T E W e ’ r e r o l l i n g o u t o u r h u b s r i g h t a c r o s s t h e U K w i t h f i v e f u r t h e r h u b s p l a n n e d f o r 2 0 1 8 WWW.ANGELHUBS.ORG
  31. 31. SETsquared-UKBAA RAIA pilot: The first step to lasting change
  32. 32. “I have seen too many entrepreneurs … spend too much time on fundraising, and …miss important milestones.” Ed Sim, BoldstartVentures “Companies that have received both an Innovate UK grant and equity investment have a higher valuation on average than companies that have received only equity investment. ” Beauhurst Start-ups that access grant + equity funding do better But weneed to make iteasier outside London! Not enough Angel investors are backing early stage innovative businesses across the Zone Source:Beauhurst
  33. 33. There’s an explosion of innovative businesses rightacross the country And it’s growing in the South West But this growth is hampered by lack of finance There is not enough angel investment outside London London and South East Entrepreneurs access 6x investment compared to South West and West
  34. 34. Catalyst for Change De-risking the investment process Stimulating growth through additional resources Creating a connected ecosystem Enhancing visibility and access to capital The Innovate UK RAIA pilot is a catalyst for growth and change by combining non- diluting grant funds with angel equity … but it is only the first step
  35. 35. Targeting and recruitment of a diversegroupof new angelinvestors Grow the number and capacity of thelocal investmentcommunity to co- investandsupportlong-termgrowth Educate new investors andprofessionalisethe existing angel investmentprocess Increase the number of female and ethnic minority investors andintegratewithinexistingand new groups Build angel capacity and make diversity an integral aspect of local investing
  36. 36. £11m Current investment capacity of our networks Access to over 10,000 Entrepreneurs and 1,400 Angel investors in over 70 angel networks
  37. 37. 1PM, 21ST MAY @ ENGINE SHED
  38. 38. 41 T H A N K Y O U F O R L I S T E N I N G
  39. 39. Identifies 368 equity backed ‘scale-up businesses’ in the West of England
  40. 40. Five ‘triggers’ for inclusion Secured equity investment 1 Secured venture debt 2 Completed management buyout/in 3 Participated in selected accelerator programmes 4 Has been or is a scale-up 5
  41. 41. • 162 Seed • 77 Venture • 26 Growth • 28 Established • 6 Zombie • 21 Exited • 47 Dead
  42. 42. Fundraisings
  43. 43. 2018 132 fundraisings £303.8m total 2017 134 fundraisings £285.4m total 2016 111 fundraisings £91.8m total 2015 95 fundraisings £101.8m total 2014 88 fundraisings £61.8m total 2019 18 fundraisings £222.8m total
  44. 44. Top funders by number of raisings
  45. 45. Top funders by value of fundraisings
  46. 46. Sectors
  47. 47. Ovo Energy Gas & electricity supplier Raised successfully in Q1 2019 (27) Graphcore Machine learning processor BluWireless 60GHz band technology for devices Immersive Labs Digital security platform OpenBionics Bionic hands using 3D-printing YellowDog Monetises spare processing power 3Radical Customer engagement mobile apps KETS Quantum Security Digital security through quantum iAM Compliant Compliance software for schools TalkLife Online mental health support Helpfulpeeps Platform to find help LuJam Security Software to detect security threats Caleño Drinks Non alcoholic spirits Service Robotics Develops robots for consumers Auroch Digital Games developer + publisher Agent Online Estate agency Level ERP online software
  48. 48. Raising Q1 2019 – raising £10m - 500k Zeetta Networks £10M Series A – Optical and network function virtualisation. GapSquare £2M – brings the power of data science to talent management. Engine Shed is a trading activity of The Science Research Foundation whose mission is to stimulate sustainable and inclusive economic growth as an honest broker. Engine Shed does not give advice on the risks of investment and is not authorised to carry on investment business under the Financial Services and Markets Act 2000 (‘the Act’). Before investing in a project about which by Engine Shed, potential investors are strongly recommended to take advice from a person authorised under the Act who specialises in advising on investments of this nature. Engine Shed is not recommending in any way any business or investment opportunity, merely public highlighting information it is aware of. Tumelo £1M – app that builds personalised investment portfolios aligned with investor values. Fundsurfer £500k – UK based fintech and brokerage company Codices £1M – developing the tools and shows for the next generation of live interactive gameshows Limber £750k – A vibrant shift-working marketplace for the hospitality sector Wriggle £600k – Discover & save money at the best independent food & drink venues in Bristol, Brighton and Cardiff.
  49. 49. Raising Q1 2019 – raising £300k – 25k Engine Shed is a trading activity of The Science Research Foundation whose mission is to stimulate sustainable and inclusive economic growth as an honest broker. Engine Shed does not give advice on the risks of investment and is not authorised to carry on investment business under the Financial Services and Markets Act 2000 (‘the Act’). Before investing in a project about which by Engine Shed, potential investors are strongly recommended to take advice from a person authorised under the Act who specialises in advising on investments of this nature. Engine Shed is not recommending in any way any business or investment opportunity, merely public highlighting information it is aware of. iExport £150k – Kickstarter - Making exporting easy through a super–connected SaaS platform Shower in a can £60k– Anti-bacterial dry shower foam which kills the bacteria that causes body odour and drys naturally Music Memory Box £25k – Kickstarter - a physical + digital tool for people living with dementia and their families. GoodSixty £250k – Borough Market raise! Glas Data £250k – world’s first agricultural data ecosystem. LUX Rewards £300k – app for discovering local fine dining restaurants and collecting points. BeforeStores £150k– new approach to global e-commerce
  50. 50. What next? 1. Pick up one page summaries // check 2. Read and share the Quarterly Investment in Brief (newsletter) tomorrow 3. Put the next event in your diary…
  51. 51. Quarterly Investment Briefing For your diary: Thursday 30 May 12:30 LUNCH EDITION Venue – Engine Shed @EngineShed_BB #QIBriefing Wifi: EngineShed Pw: GreaterBristol