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Investment appetite in FinTech and FashTech

A report created by our friends at Ascendant Corporate Finance reveals some fascinating facts and statistics about current investment trends in the UK (article below), naming FinTech and FashTech as two of the biggest internet sectors VC’s are pouring investment into.

Between January and June this year, 22 FinTech businesses received just under £300m from investors – more than the combined totals for Software and Cleantech. We have recently completed a number of assignments in the FinTech sector, for companies which are disrupting the retail banking and payments space. Furthermore, we have been extremely busy placing senior-level candidates for FashTech clients, a space for which VC’s have an increasing appetite when it comes to investing. Although this sector has yet to achieve “the scale that requires the type of ‘super investment’ (ie >£10m) deals that are more common in FinTech”, there are larger investments being made into FashTech companies, such as FarFetch which has raised £39m to date. This suggests that this may be about to change.

Our clients in FinTech include CapitalAid, Meniga and Inpay, and in FashTech our clients include New Look, Goop and Styloko.

Data courtesy of Stuart McKnight from Ascendant Corporate finance.

Investment Trends in Q2 2014

The simple headline is that in Q2 2014, £320m (vs £192m in Q2 2013) was invested in 84 deals (69) of over £0.5m by 117 investors (82).  These deals bring the totals for the year to date to £856m (£479m) and 170 investments (128).  This represents 93% of all funds invested in the whole of 2013.

The clear phenomenon of 2014 (so far) has been huge growth of investment in internet/mobile service companies.  In the first six months of the year, £520m was received by 92 companies in the sector.  This compares to £259m invested in 91 internet service businesses for the whole of 2013.  In 2014, London has completely dominated the sector taking 88% of funds invested and 79% of number of deals.

The biggest single subsector in this internet group is “FinTech” – financial technology.  Between January and June, 22 of these businesses received just under £300m from investors – more than the combined totals for Software and Cleantech.  In many ways this simple statement underlines the major shift that has occurred in the VC market over the last 5 years.  In 2009, Cleantech took twice the amount of VC money that all internet service companies received.  In 2014, investors have new priorities…

Other than FinTech, the only other major grouping amongst internet service investments was in fashion/retail companies.  We tracked 16 of these who received £85m.  So whilst “FashTech” is a popular area for investment, relatively few of the businesses have achieved the scale that requires the type of “super investment” (ie >£10m) deals that are more common in FinTech.

•           In Q2 2014,  £320m was invested in 84 deals by 117 investors

•           In the year to date, £856m has been invested in 170 companies

•           The busiest investors were MMC, Scottish Investment Bank, Index Ventures, Archangels, Balderton Capital, Forward Partners and Imperial Innovations

•           75% of deals involved more than one investor

•           Private investors participated in 37% of VC deals, US investors in 10%, Euro investors in 8% and Corporate Investors in 15%

•           The 14 biggest deals received 55% of funds invested, included: Farfetch (£39m), Nutmeg (£19m), Ebury (£18m), MyOptique (£16m), Transferwise (£15m), Brandwatch (£13m), Nujira (£12m), Roli (£8m), Ticketscript (£7m), Osper (£6m), Aveillant (£6m), Brightpearl (£6m), Citymapper (£6m) and Currency Cloud (£6m).

•           Internet/Wireless Services companies received £180m, Software £65m and Cleantech £17m. £60m was invested in companies that could not be simply categorised

•           In the Internet/Wireless Services sector, 40 companies received investment, Farfetch (£39m), Nutmeg (£19m), MyOptique (£16m), Transferwise (£15m), Osper (£6m), Citymapper (£6m) and Currency Cloud (£6m) received the biggest VC cheques

•           The largest Software deals were: Ebury (£18m), Brightpearl (£6m), Certivox (£5m) and Intent HQ (£5m).  20 Software companies received VC backing

•           Just 5 Cleantech companies raised capital: Cylon Controls (£6m), E-Leather (£5m), Nova Innovation (£4m), Netthings (£1.3m) and Celtic Renewables (£1.2m)

•           Outside of the key subsectors, the biggest deals were: Roli (£8m), Aveillant (£6m), MCor (£5m), Nualight (£3m) and Masabi (£2.5m)

•           London and Scotland which were responsible for 52% and 11% of deals respectively

•           London’s share of the VC money was down from its peak in Q1 to 65% of all funds invested in the UK and Ireland.

•           On a city-by-city basis, 45 London tech companies received VC, 8 in Edinburgh and 6 in Cambridge. All other cities or towns had less than 5 deals.

 

Royal Society Science CEO Summit

Rosemary and Brett spent yesterday mentoring at the Science CEO summit, part of an annual calendar of events by Silicon Valley Comes to the UK (SVC2UK). This event, staged in partnership with the oldest scientific society in continuous existence, The Royal Society, drew the best and brightest CEO’s from the UK’s emerging high growth science companies. The CEO’s were selected by a high-profile group of industry professionals, VC’s, and well respected organisations within the science community, and they were carefully selected based on their company’s growth and progress.

Forsyth Group client GetLenses acquires Vision Direct

UK online contact lens retailer GetLenses.co.uk announced today that it has acquired Dutch online retailers Vision Direct and Lensbase, which sell contact lenses, contact lens solutions and prescription glasses to consumers in the Netherlands, Spain and the UK. The combined entity is expected to generate revenues of over €30 million in 2014.

GetLenses is the largest online contact lens retailer in the UK, offering highly competitive prices and next-day delivery on an extensive range of prescription contact lenses. In addition to a broad product range and significant price savings, customers also benefit from being able to check their prescription before they purchase. The company employs an award-winning call centre team in York, which is trained by opticians to meet regulations and provide excellent customer services.

Vision Direct, which was founded in 1998, sells contact lenses and prescription glasses online in Europe. The company offers a huge selection of contact lenses from all the leading suppliers at extremely compelling prices from its base in the Netherlands.

“This cements our position as a market leader in Europe, significantly increases our customer base and enhances our ability to deliver a fantastic service to all our customers,” says Michael Kraftman, CEO GetLenses.co.uk, “We expect to complement this with further acquisitive growth in other European markets.”

The acquisition was financed by a new funding round led by existing shareholder Octopus Investments and included Fidelity Worldwide Investments, Hargreave Hale and Artemis Investment Management.

http://bit.ly/1l0r9Pz

Forsyth Group Clients Tradeshift raise $75M

Tradeshift, a company that provides free electronic invoicing along with tools for managing payments and buyer-seller relationships, is announcing today a new $75 million funding round.

Tradeshift, a startup that began life in Copenhagen, and has expanded to the US and throughout Europe, is now heading to Japan. The company has raised the $75 million in venture funding from Scentan Ventures, a venture capital firm based in Singapore.

The deal will fuel Tradeshift’s expansion into Japan, starting with an office in Tokyo. Scentan will help out on the strategic side, giving Tradeshift a hand with recruiting and product development for the local market. In exchange, Tradeshift will offer Scentan exclusive rights to product development, sales marketing and servicing the Tradeshift platform in Japan.

Prior to this, Tradeshift, which offers software for business-to-business sales and collaboration, had raised $37 million in venture funding from Notion Capital, Ru-net, Kite Ventures, Intuit and PayPal. The company had opened an office in China in 2013.

http://bit.ly/1jxf1Cp

http://bit.ly/NuAMrp

The Forsyth Group shortlisted for the Service Provider of the Year award at the Investor AllStars Awards 2013

LONDON: 5 September 2013The Forsyth Group has been shortlisted for the Service Provider of the Year Award at the eleventh annual Investor AllStars Awards. The Awards celebrate professional excellence in entrepreneurship and the professional investor community and will be hosted at London’s Natural History Museum on 25 September 2013.

The Investor AllStars Awards is an annual event organised by GP Bullhound, the technology investment bank, and GrowthBusiness, a Vitesse Media website specialising in providing information for entrepreneurs and leaders of fast-growth enterprises.

The Forsyth Group provides retained executive search services to early stage and high growth technology companies in the USA, UK and across Europe. The company focuses exclusively on the emerging technology sector, working at CxO, VO & Director level for companies in Big Data, SaaS/Software, Mobile, Internet and Digital Media.

“This is a great achievement for The Forsyth Group to be shortlisted for the award for Service Provider of the Year” said Manish Madhvani, Managing Partner at GP Bullhound. “It has been a great year for growth and innovation in the European technology sector, companies like The Forsyth Group set a high standard and are a great role model for others seeking to push the boundaries in this exciting industry.”

“We are very proud to be shortlisted for this award together with so many excellent Service Providers.”  said Rosemary Forsyth, General Partner at The Forsyth Group. “This year we have worked with some of the most exciting high growth technology companies in the UK, EU and USA and it is a great honour to have been nominated by our customers for this award”

“The Investor AllStars Awards highlight entrepreneurs and VCs who are driving the technology sector forward,” said Niki Baker, CEO, Vitesse Media. “The Awards are an opportunity for the European venture capital community to consider the biggest successes of the past year and look forward to the trends and innovation still to come.”

The following is the full list of awards categories: Venture Capital Fund of the Year; Europe’s Most Exciting Investor Backed Company of the Year; Investor of the Year; Female Entrepreneur of the Year; Male Entrepreneur of the Year; Equity Gap Fund of the Year; Exit of the Year; Growth/Buyout Fund of the Year; Private Investor Network of the Year; Service Provider of the Year and VCT of the Year.

The Award’s headline sponsor is global investment company SFERIQ. The premium sponsors are Orrick, a global law firm, and MTI Ventures, which focuses on early stage venture capital and management in software, communication, life sciences, materials technology and industrial products.

-ENDS-

About GP Bullhound
GP Bullhound is an international technology investment banking group with offices in London, San Francisco, Stockholm and Berlin. Founded in 1999, GP Bullhound provides world-class advice on mergers, acquisitions and private placements to a diverse range of corporate clients, institutional investors and high-net-worth individuals.

Combining a true love for entrepreneurship and innovation with deep global buyer relations and sector expertise, GP Bullhound has completed transactions for many category leaders and most recently sold Tunigo to Spotify, and Fjord to Accenture. For more information, please visit their website.
In 2013, GP Bullhound was awarded Boutique Investment Bank of the Year and Leading Advisers of the Year by the Acquisition International M&A Awards.

Vitesse Media
Vitesse Media is a multimedia business and offers award-winning publications, fast-growing websites, exciting events and much-acclaimed research. They are the leading specialists in growth businesses ¬ entrepreneurs and CEOs, their investors, advisers and suppliers. Vitesse Media is quoted on AIM. More information

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