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Quarterly Investment Briefing (QIB): Q2 2019 Regional Investment

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Slides which accompanied the Q2 2019 Quarterly Investment Briefing on 30th May. The event saw presentations from Shaw and Co. on their new Investment Academy, from Bristol and Bath Regional Capital on the City Funds and from Tom Bridges of ARUP who shared insights into what we can learn from Leeds. Slides 66-68 include information about those 24 companies that are actively raising investment in Q2 2019. Check out the disclaimer - these aren't recommendations, just information.

Published in: Investor Relations
  • Great event, as ever, Briony - thanks for keeping us up to date on the great potential that is the SW. Also good to know that we are keeping track with other regions. See you at the next one.
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Quarterly Investment Briefing (QIB): Q2 2019 Regional Investment

  1. 1. Q2 Quarterly Investment Briefing Our region Thursday 30th May @EngineShed_BB #QIBriefing
  2. 2. Agenda 12:30 - 12:40 Grab a sandwich and a seat 12:40 – 12:45 Welcome and scene setting 12:45 – 13:30 Sharing and learning + Ed Rowberry, Bristol and Bath Regional Capital + Tom Bridges, ARUP + Nathan Morgan, Shaw and Co. 13.30 – 13:45 What Beauhurst data tells us 13:45 – 14:00 Who is raising and what next? 14:00 – 14:30 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. [ [
  5. 5. Ed Rowberry Bristol and Bath Regional Capital @BristolBathRCap
  6. 6. Quarterly Investment Briefing Bristol & Bath Regional Capital CIC Edward Rowberry, Chief Executive Ryan Munn, Business Development 30 May 2019
  7. 7. Innovation BBRC - Story so far
  8. 8. Problem Bristol is a city with entrenched systemic inequality and disadvantage… …which most negatively impacts specific neighbourhoods and groups of people.
  9. 9. City Funds: Vision City Funds is a disruptive, place- based, locally-led fund which aims to catalyse sustainable and transformational change where the need is greatest in Bristol.
  10. 10. Collaborative Impact COMMUNITIES COUNCIL INVESTORS BUSINESS FOUNDATIONS • Regional investment fund, linked to city priorities • One point of contact with supportive infrastructure to bring together: • Collaborative support for organisations creating social or environmental impact
  11. 11. Funding themes Innovation Community Initiatives No Child Goes Hungry Economic Inclusion Environmental Transformation
  12. 12. Comprehensiv e support along growth pathway Capacity building Enterprise development Investment readiness Impact investing, equity and debt Ecosystem interventions
  13. 13. Investment strategy 1. Additional 2. Collaborative 3. Transformative
  14. 14. Questions Edward Rowberry, Chief Executive Ryan Munn, Business Development Manager
  15. 15. Tom Bridges Arup, Leeds @bridges_tom
  16. 16. Building an ecosystem for innovation driven entrepreneurship Presentation to Quarterly Investment Briefing, Engine Shed, Bristol, 29 May 2019. Tom Bridges, Director Cities Advisory, Arup tom.bridges@arup.com @Bridges_Tom www.citypolicy.wordpress.com
  17. 17. 20 Leeds Inclusive Growth Strategy
  18. 18. 21 Cambridge Innovation Centre, 1 Broadway, Cambridge Massachusetts Learning from best practice
  19. 19. 22 Thinking differently about innovators and entrepreneurs – the old mindset
  20. 20. 23 MIT REAP Framework. Source: MIT Sloan It is the ecosystem that matters
  21. 21. 24 R&D Spend is an important factor Source: Tom Forth. www.tomforth.co.uk/researchingresearch/
  22. 22. 25 Connecting the actors: example of NorthInvest Not-for-profit organisation connecting technology driven start-ups and scale-ups to the angel and investor community across the North of England
  23. 23. 26 Over-reliance on incubators
  24. 24. 27 Source: Greentown Labs The role of accelerators
  25. 25. 28 Source: Arup Testing and experimentation tools Figure 2: Real-world testbeds placed among other innovation tools
  26. 26. 29 Role of innovation testbeds “Controlled or bounded environments for testing innovations in real-world or close to real-world conditions in the manner (or close to the manner) in which they will be used or operated”.
  27. 27. 30 • Importance of clear policy framework • Focus on building the ecosystem • Increasing R&D spend matters • Accelerators can help get more firms investment-ready • Think about designing testing tools as part of a mission-orientated local industrial strategies Conclusions
  28. 28. Thank You! Further information: www.leedsgrowthstrategy.co.uk www.reap.mit.edu www.northinvest.co.uk www.tomforth.co.uk/researchingresearch/ https://www.nesta.org.uk/project/flying-high-challenge/ https://www.ucl.ac.uk/bartlett/public-purpose/partnerships/ucl-commission-mission-oriented-innovation-and- industrial-strategy-moiis
  29. 29. Nathan Morgan Shaw and Co. LLP @ShawCoLLP
  30. 30. Engine Shed Quarterly Investment Briefing Nathan Morgan| 30 May 2019
  31. 31. Who are we?
  32. 32. We are an advisory boutiquehelping ambitious owner-managers to create value in their business grow fund exit
  33. 33. What we do
  34. 34. ScaleUp Supporting high growth businesses to raise equity investment Debt Working with institutions and private wealthto provide debt solutions to established businesses M&A Enabling owner managers to complete their journey with an Exit
  35. 35. The Funding Academy • 5 workshops expertly designed to cover: - business plan, investment proposition, financial model, investment deck and pitch practice • Input from industry experts, investors and peers. • Practical one-to-one support between workshops. A fivemonth programmeof hands-on workshops and tailored one-to-one support, designed to get businesses investment ready. Fully funded by Shaw & Co, free to participants
  36. 36. Draft programme summary • Quarterly cohorts commencing in July 2019 • Five one-day classroom sessions over five months: - Investment landscape, Vision & Leadership - Unit economics, Sale & Marketing strategy - Financial forecasts, What investors look for - Board, HR, Legals & Pitch Deck - Pitch practice • One-to-one support to define the vision, understand the unit economics, prepare a financial model and articulate the investment proposition *provided by external industry specialists
  37. 37. Graduation • Successful graduates can: - Pitch to our investor network - Showcase their investment on our private investment platform Standard fees would apply at this stage • Working with business over an extended period allows Shaw & Co to undertake rigorous take-on diligence prior to initiating a fundraise - allowing us to present only high quality deals to investors. TheAcademy@shawllp.co.uk
  38. 38. The ScaleUp Landscape
  39. 39. 1. Total UK investment quantum remains solid, following a record 2018
  40. 40. … but deal volumes have slowed UKVC Deals Indicating that institutions are investing later.
  41. 41. 2. This is not (entirely) a Brexit issue
  42. 42. Global VCInvestments … the global trend is fewer but larger Non-institutional investors needto fillthe gap
  43. 43. 3. Bristol punches on the global stage (time and again) #2 in Europe $282m #1 in Europe $200m 2018Q4 #10 in UK $45m 2019Q1
  44. 44. • ...but fundingearly stage businesses (pre 1m revenue) remains difficult • …and despite beinghometo 10% of UK Scaleups, the Southwest attracts only5% ofUK equityfunding(overstated by outliers) 3. Bristol (continued)
  45. 45. 4. Corporate and private venturing is on the rise • Nearly 25%of allVC deals inEurope were bycorporates inQ1 (acontinued upward trend) • Weare speaking withanincreasingnumberof family offices andHNW seekingdirect investments
  46. 46. 5. AI is hot UK, £800m FR, £400m GER, £300m With UKcompanies raising x2 Germany and France combinedin 2018 AI fundraising, 2018 Source: TechNation 2018 report
  47. 47. 7. On the M&A side, in 2018global deal volumes and values were strong.
  48. 48. With acquisitions of tech and SaaS businesses being particularly buoyant.
  49. 49. M&A outlook (continued) ❌Butglobal deal volumes were down 17%in2019Q1 (after abumper 2018) ❌AndUKlost its rankingas the world’s thirdbiggest M&A region. This could just be timing ✅UK is nowthemost likelytargetfor foreign acquirers* ✅UK is outperformingEurope (drivenby US buyers) *EYsix-monthly sentiment surveyQ1 2019
  50. 50. Concluding thoughts • Plenty of money & opportunities. • Investors remain selective, as high valuations combine with market uncertainties. • We have found the consumer space challenging. • Tech enabled businesses with recurringrevenues remain in highdemand and command premium valuations. • Founders remain cautious of investment and have high value expectations
  51. 51. Thank you Nathan Morgan Director of Scaleups 0117 325 8505 07788 277 927 NathanMorgan@shawllp.co.u k TheAcademy@shawllp.co.uk
  52. 52. Identifies 359 equity-backed ‘high growth businesses’ in theWest of England
  53. 53. • 168 Seed companies • 83Venture companies • 31 Growth companies • 28 Established companies • 10 Zombie companies • 24 Exited companies • 52 Dead companies Stage of Evolution
  54. 54. Fundraisings: Top companies by total amount raised
  55. 55. Equity fundraisings by companies in West of England Total amount raised since 2011: £1.15bn Number of deals since 2011: 723 Announced: £939.7m Unannounced: £214.3m
  56. 56. Top investors by number of deals (since 2011)
  57. 57. Top investors by total value of deals (since 2011)
  58. 58. Sectors by number of deals (since 2011)
  59. 59. £12.7MBluWireless 60GHz band technology for Inductosense Wireless sensing technology TravelLocal Connects tourists w/ locally-owned travel Wriggle Mobile app for food discounts Zentraxa Synthetic biology platform for novel peptides Fly Fitness Gym and café – classes & boxing Azul Optics Diagnoses risk of age-related macular degeneration Limber Hospitality staffing marketplace 100% Natural Ethical and organic food TOG Knives Designs & produces kitchen knives B2Space Optimal launch location software Rockstar Sports Sells sporting wear + 4 below £100k Raised successfully in Q2 2019 (16 deals)
  60. 60. Triggers of growth in the South West
  61. 61. Investment in the South West
  62. 62. Raising Q2 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 Lettus Grow £3M – design advanced technology for indoor growing that delivers a step-change in product efficiency for both markets Natural Aptitude £650k – enables the real-time construction of bespoke geospatial smartphone apps via drag and drop interface Payaca £500k – enables independent tradespeople to connect their customers with finance at the best rates without requiring FCA authorisation. Synalogik Scout™ £1.25M - assists security analysts in the finance industry to counter fraud. Vocavio USD$5M – software that automatically and objectively assesses speech communication performance of teams working in high stress – high workload environments.
  63. 63. Raising Q2 2019 – raising £400k – 250k 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 £300k - Making exporting easy through a super– connected SaaS platform GoodSixty £250k – help independent markets, food stores & artisan producers thrive online. LUX Rewards £300k – app for discovering local fine dining restaurants and collecting points. Codices £400k– tools and shows for the next generation of live interactive gameshows Lambda Stretch £250k – Developing a coating for Photovoltaic (PV) panel glass to increase the power by up to 10%. MiHeart £350k – operational mobile e-health management solution. Sigma Polaris £250k – provides HR talent assessment & pre- employment support software.Watmuff & Beckett £330k– Dragons Den backed, established & profitable Soups, Risottos & Broths company based in Frome Helm Tickets £300k - self-service ticketing platform that powers thousands of events, selling tickets in 65+ countries.
  64. 64. Raising Q2 2019 – raising £170k – 60k 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. Shower in a can £60k– Anti-bacterial dry shower foam which kills the bacteria that causes body odour and drys naturally The Bio Factory £150k – manufactures and manages innovative waste management systems for refugee camps BeforeStores £150k– new approach to global e-commerce MindHarp £150k – enables anyone to play and explore carefully composed musical sounds simply by tapping buttons. NeuroAI £170k – hardware start-up developing high- performance devices for Artificial Intelligence (AI). OneSub £150k – fully-automated digital stack which downloads and reads thousands of news articles daily into an AI knowledge model.
  65. 65. What next? 1. Pick up one page summaries // check https://techspark.co/sginvest/ 2. Read and share the Quarterly Investment in Brief (newsletter) tomorrow 3. Put the next event in your diary…
  66. 66. Quarterly Investment Briefing For your diary: Thursday 12th September, 16:30 Venue – Engine Shed @EngineShed_BB #QIBriefing

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