News about 13 UK growth companies and/or accelerators in the GRID marketplace, 3rd – 9th January 2016:
Brompton £28m | Farmdrop | Hubbub | Bigbarn | Cult Wines £17m | Nominet Trust | Open Bionics | Andiamo | What3Words | Path Finder | Gyroglove | Netclean £3.5m | Games Workshop £119.1m
BROMPTON slips a gear. Profits plummet at folding bike maker / Ben Laurance, Sunday Times. January 3.
DZ profile: Brompton Bicycle Limited
Business: makes folding bikes. More than three-quarters of sales are overseas.
Location: It has outgrown its factory at Kew Bridge and plans to move to larger premises.
Founder: Andrew Ritchie. Ritchie remains the largest shareholder and received dividends of £98,000 last year.
Staff: 240 people. Will Butler-Adams, managing director.
Financials: turnover has increased from £1.7m in 2002 to £28m last year, with profits of £3.4m.
1. Accounts show that profits fell by 37% in the 12 months to last March. Brompton’s pre-tax surplus dipped to £2.1m thanks to higher investment costs.
2. Sold almost 45,000 bikes last year: that marked a slight fall, but followed a 22% jump the year before. Sales in 2015 were disrupted by teething problems with a new distribution deal in the Benelux countries. In Japan, sales were lower as a result of over-ordering the year before.
UPDATE: Brompton Bicycle sees profits plunge after firm moves to new premises | Sarah Bridge, The Mail on Sunday. January 8, 2017 |
3. Profits have plunged at folding bike manufacturers Brompton Bicycle – as the company counts the cost of moving to new premises. During the year the company relocated from Kew Bridge, London, to a new factory in Greenford, Middlesex, doubling capacity but adding exceptional costs of £1.1million.
4. While sales were up 3 per cent to £28.4m for the year to March 31, 2016, pre-tax profit fell from £2.1million to £192,000. But directors said profit margins were up and the company now exports to 42 territories, selling 43,859 bicycles last year.
Brompton leads the charge with commuter e-bike in 2018 | Michael Pooler, FT. July 29, 2017.
5. ...is launching an electric model that it hopes can play a role in reshaping urban transport, at the same time as shifting sales up a gear. Five years in the making, Brompton’s e-bike was developed with technology from Williams Racing, the Formula 1 group, and the first units will roll out of the company’s London factory for delivery in early 2018. It uses a removable lithium-ion battery that powers a motor in the front wheel hub. This assists the rider, by responding to how hard they pedal, up to a maximum speed of about 15mph. ...price tag of £2,595
6. …fall in the value of sterling following the EU referendum. But the flipside is higher prices for imported bikes and foreign components used by manufacturers. In response, Brompton, which exports about 80 per cent of its output, has raised its prices, and says it will gain about an extra £200,000 in profit. ...total UK sales stuck around the 3.5m units mark for several years
7. A trained engineer, the 43-year-old Mr Butler-Adams previously worked for chemicals group ICI ....in the 15 years since joining Brompton, he has helped transform the company from a niche foldable cycle outfit with sales of £1.7m into Britain’s biggest bikemaker, on track to crank out 45,000 units this year on turnover of £32m. Along the way he has picked up an OBE for services to manufacturing.
Farmers’ markets plough online field. Small producers are finding better ways of selling to the public / Emma Broomfield, Sunday Times.
DZ profile: Farmdrop Limited
Business: online farmers’ market which delivers fresh local produce to customers’ doors. It promises a better deal for producers than the supermarkets and says it supports local food production by sourcing most orders from within 150 miles of customers.
Founders: include former stockbroker Ben Pugh and lawyer Ned Staple
Investment: recently won £500,000 from backers including Zoopla founder Alex Chesterman and Quentin Griffiths, who helped to create the online fashion giant Asos. Skype co-founder Niklas Zennstrom and Alex Chesterman of Zoopla also an early backer.
UPDATE: Farmdrop gets £7m from investors including Skype co-founder Niklas Zennström | Luke Mintz, Tech City News. April 24, 2017
Online grocery platform Farmdrop has secured £7m in a Series A round led by London-based venture capital firm ATOMICO. The firm says it will use the investment to fund new distribution hubs outside London – with an opening in Bristol planned for later this year – and to develop new technologies for farmers to manage their inventories.
New investors include John Reynolds, the founder and CEO of predictive typing service SwiftKey, and Nigel Wray, chairman of Saracens Rugby Club. They join existing investors Alex Chesterman, founder of Zoopla Property Group, and Quentin Griffiths, founder of clothing company Asos.
DZ profile: Hubbub Limited
Business: online grocery service - link between small retailers and consumers - that offers same-day delivery within the M25. The site offers 15,000 items from more than 100 independent shops, which can be couriered to the customer’s door on the day they order. Retailers that have signed up to the site pay fixed fees or commissions depending on factors such as volume of online sales, although Hubbub aims to take about 50% of a supplier’s gross margin. In return, the most established retailers on the site have reported that up to 10% of their sales now come from Hubbub customers.“In the past year we’ve grown threefold and created a community,” said Leaf.
Location: headquarters in Kensal Rise, northwest London
Founder: Marisa Leaf, 37, former human-rights barrister. Co-chief executive William Reeve.
Investment: Raised more than £3m from investors including OCTOPUS VENTURES and MMC VENTURES. Last year William Reeve, one of the entrepreneurs behind the movie-rental company Lovefilm, joined Hubbub as co-chief executive as part of a £2m investment that will allow the concept to be rolled out across the UK this year.
The perfect formula - less red tape and more support | Kiki Loizou, The Sunday Times. July 24 2016.
1. Reeve is concerned for the future of his European staff and said he has heard of investors pulling away from deals since the vote for Brexit. “The quicker we come out with an economic strategy to see whether the world really is about to fall apart, the better,” he said.
What happens when a good start-up goes wrong? | Kiki Loizou, The Sunday Times | April 2 2017
2. On March 8, Hubbub said it was being wound down. Last year Hubbub was on the cusp of securing two rounds of funding but talks fell apart. The business employed 30 staff at its peak and worked with 150 shops, with plans to expand further.
2. William Reeve, 44, who has invested in more than 20 fledgling companies, had put in more than £100,000 of his own cash. He has backed Zoopla, graze.com and Secret Escapes and also serves as a non-executive director at FTSE 250 furniture retailer Dunelm. The Enterprise Investment Scheme (EIS) means Reeve will not lose all his money, thanks to a clause allowing angel investors who have been directors of a company to keep their tax benefits. He expects to get back roughly half his investment through the scheme.
3. Venture capital firms, however, were less keen. “We only ever raised about £3m and it lasted three years. We were conscious not to blow investor money. In the meantime you have Deliveroo and Uber losing ridiculous amounts. To some extent they are setting the benchmark that growth is the focus and to hell with the losses.”
DZ profile: Bigbarn C.i.c.
Business: online community that promotes farm shops and local producers. Its directory has 7,000 producers across the country. There are up to 4,000 visitors to the site each day, and its growing popularity has led to the development of an online market where small retailers can sell their produce, paying 6% commission to BigBarn.
Founder: Anthony Davison, 54.
CULT WINES: How I Made It: Tom Gearing, co-founder / Laura Onita
DZ profile: Cult Wines Limited
Business: sources and manages fine wine portfolios worth £30m for 1,600 clients in 55 countries. Charges clients a 15% management fee on their initial investment for the first five years, after which they have to pay for storage and insurance. Gearing said clients could expect annual returns of 8%-10% on the total invested, minus the fees.
Location: headquarters in Richmond, southwest London
Founders: Tom Gearing, 28, with his brother Oliver. Father, Phil joined in 2010 as chairman. TG started a history degree at Nottingham University, and a year later he and his brother decided to sell collectable wines to raise extra money. Tom graduated in 2009 and took over the business as his brother turned to writing books. After 18 months, he had 100 clients and three employees.
Staff: 16 people
Financials: sales topped £17m last year. aiming for sales of £25m next year.
1. In 2014 Cult Wines took over Premier Cru, one of Britain’s oldest wine investment companies, which had ceased trading. No money changed hands. Instead, Cult Wines offered to take on the clients’ portfolios for a 5% fee for the first two years, compared with Premier Cru’s 1.75% annual fee. Not all were happy with the terms, but 450 of the 550 investors accepted them
2. Rising number of overseas customers — they accounted for 30% of sales in 2014 — and there are plans to open an office in Hong Kong.
British entrepreneurs seek to use technology as force for good / Peter Campbell, FT.
DZ profile: Nominet Charitable Foundation
Business: British charity, invests in up to £4m a year in start-up companies that use tech as a “force for good” - many built on technology developed in universities, including some by medical students. Most of the companies do not have revenues, let alone profits, and are surviving on early-stage funding. Many have only developed prototypes of their products, and those that want to operate in the medical sector will have to gain clearance from health regulators in a process that can often take two years.
Team: Vicki Hearn, director
News: Nominet Trust each year identifies the 100 most innovative companies using tech for good, and one named on the 2015 list was Open Bionics.
DZ profile: Open Bionics Ltd
Business: uses 3D printing technology to create bionic arms for hand amputees or those born with disabilities.
Founder: Joel Gibbard, a Plymouth university robotics graduate.
1. 3D-printed objects have a honeycomb structure in the middle, making them both strong and lightweight. “This makes the hand capable of powerful grips,” says Mr Gibbard.
2. Open Bionics’ bionic arm only takes 40 hours to manufacture with a 3D printer, so the device can be made for just £1,000 — compared with the £60,000 price tag for current prosthetic alternatives.
Investment: has so far raised £300,000 from investors using the Crowdcube platform.
DZ profile: Project Andiamo Ltd
Business: plans to make back braces for children with cerebral palsy
Founders: husband and wife Naveed and Samiya Parvez. Founded company after the difficult experience of fitting braces for their son Diamo, who had cerebral palsy and was quadriplegic.
News: Currently back braces are made from Plaster of Paris and can take three months to produce, meaning the child quickly outgrows them. But by using 3D printing technology, new braces for a growing child can be made quickly and conveniently.
DZ profile: What3words Limited
Business: digital map for mobiles and navigation tool: has mapped out the globe into 57 trillion 3m-by-3m squares using a unique combination of three unrelated words — a system that is most useful in parts of the world without a system of addresses and postcodes. To cover the globe, What3Words needs to use 40,000 words – which gives around 60 trillion combinations. Sheldrick teamed up with childhood friend Mohan Ganesalingam, a professional mathematician, and devised What3Words after working out it would require fewer combinations and be more memorable to humans than other alpha-numeric systems which have been floated. What3Words is in 12 languages and free to individuals, interest in its enterprise solution is growing.
Founder: Chris Sheldrick, a music tour manager, and school friend Jack Waley-Cohen
Investment: Last month, the company raised $3.5m from HORIZONS VENTURES, Li Ka-shing’s investment vehicle, and INTEL CAPITAL a Silicon Valley venture capital group.
1. ...is now being used to monitor outbreaks of cholera in Dar es Salaam in Tanzania. The company’s app is loaded on to health workers’ smartphones, who can then mark the location of infected homes on the map, and find the nearest water source — thereby identifying the most likely source of the cholera.
2. The UN has also integrated what3words’ technology into its own disaster relief app for aid workers.
UPDATE: What3words co-founder explains how his company is creating Mongolian addresses and helping the UN in disaster zones | Harriet Green, City A.M. September 19, 2016
3. ..signed a deal with national delivery service Mongolian Post this summer. ...the least densely populated country in the world – nearly the size of Western Europe, but with under 3m people.”
4. This isn’t a problem peculiar to Mongolia. In the US, it’s only in the last 10 years that all houses had street addresses. Much of the world still relies on PO Boxes and word of mouth. Last year, the Brazilian co-operative Carteiro Amigo started using the What3Words app to give people in favelas addresses.
5. While What3Words can save time, energy and frustration – Steven Spielberg’s Ready Player One crew, who are currently filming in Birmingham, are using it to find each other round the set – it can also save lives: it’s now being used by the UN in an app designed for international disasters.
6. Deals have been signed with the company’s first drone partner, ALTAVIAN, and with Indian moped taxi firm Bikxie
7. Something that distinguishes What3Words from apps like Find Friends is the fact that it isn’t documenting current location. Rather, it can capture somewhere you’re either going to or would like something to happen at.
8. ... ecosystem What3Word's software is creating. “We actively encourage people to take our code and integrate it. An app called Navmii has just done so. It’s the biggest offline navigation app. That’s fantastic because so many businesses in the developing world don’t have access to the internet.”
Addressing platform what3words closes $8.5M Series B led by logistics firm Aramex | Natasha Lomas, Techcrunch. June 29, 2016
9… new $8.5m Series B funding round led by logistics company ARAMEX. ...which intends to use the system in its ecommerce fulfilment operations across the Middle East, Asia, and Africa. ..will in part go towards supporting the launch of an Arabic version of its addressing system. ...also involved existing investors INTEL CAPITAL, with UK funds FORCE OVER MASS CAPITAL and MUSTARD SEED also participating. I...raised $13.5m to date.
Ford links up with London startup What3words for a new way to map the world | Emily Nicolle, City A.M. 26 February 2019
10. Ford partnership....means drivers will be able to link the What3words app with Ford's in-car navigation system. Ford said the partnership was specifically designed for drivers using voice assistants in their cars, where What3words' technology will be safer and much more accurate than other forms of navigation. The technology will reduce address input errors and increase efficiency, with the ability to navigate to any spot on the planet. Ford said the system will have built-in error prevention and will be available in 26 languages.
11. Joining partners such as DOMINO'S PIZZA, MERCEDES-BENZ and CABIFY,
12. ...investment by SONY at the end of last year, which took total funding to £43m. MERCEDES also bought up a 10 per cent stake in the business in a strategic deal last year, while other backers include former Formula 1 driver Nico Rosberg.
13. ...is now being used in about 170 countries and plans to reach 150 employees in London by the end of this year, as well as expand its new office in Silicon Valley. Giles Rhys Jones, Chief Marketing Officer.
Entrepreneurs: What3Words hopes to ease the pain of confusing postcode lottery | Alex Lawson, The Evening Standard. 29 April 2019
14. The app uses 930,000 words, all in different three-word combinations (for example, its office is filled.count.soap), to map the world in 26 languages. The app is free to users while businesses pay an annual licence fee for the computer code to integrate it into their existing software.
15. ...investors include Mercedes’ parent DAIMLER, Germany’s DEUTSCHE BAHN, China’s largest car maker SAIC Motor company and even Formula 1 champion Nico Rosberg. … the last filed accounts show the business was loss-making in 2017. ....100 employees
16. Beyond a push into more languages, the focus is on using the tech to cut response times at serious incidents. The UN and RED CROSS have adopted What3Words for disaster relief, and last month the British police and emergency services confirmed its roll-out in the UK, as they push to cut response times in hard-to-find locations.
DZ profile: Walk With Path Limited
Business: installs lasers in shoes that project a line on to the ground, showing where each foot should go. This helps Parkinsons’ sufferers avoid what is known as “freezing of gait”, when they struggle to walk. Path Finder’s device is at least two years from commercial launch.
Founder: Denmark-born Lise Pape, 34, was inspired to come up with her Path Finder shoe by her father’s illness.
News: has obtained grants from James Dyson and Innovate UK, the government’s innovation agency,
DZ profile: Gyrogear Limited
Business: makes a glove with gyroscopes for Parkinsons’ sufferers that helps stabilise the hand and prevent shaking. The device is more than a year away from production.
Investment: has raised £700,000 from friends and close family of its founders
DZ profile: Netclean Technologies AB
Business: helps tackle child sex abuse. Uses an array of methods to identify the location of scenes of such abuse from photographs or videos on the internet — and passing details to the relevant authorities. It’s technology is licensed to child protection agencies or law enforcement authorities such as the US Federal Bureau of Investigation for free. Large companies also pay NetClean to monitor their telecoms networks. NetClean is able to detect when employees are using office equipment, such as laptops, to view material involving child sex abuse.cIt can then tell the company, which seizes the property — handing the kit over to NetClean to analyse the material.
Innovation: NetClean uses complicated algorithms to piece together minute details found in photographs. Some of these include identifying patterns in wall coverings or on floors.
Staff: Christian Berg, chief executive
Financials: sales of £3.5m for 2014 and net profit of £600,000.
Investment: in 2007 it raised £3m from private investors.
1. Last year more than 1,000 children in the US were rescued from homes where they were being abused sexually because of investigations aided by NetClean’s technology.
2. In the UK, NetClean is working with the British government to roll out its forensic tools to 46 law enforcement agencies including police forces.
But the company charges when its technology is used in broader ways, such as tracking drug gangs or detecting fraud, where linking individuals or places can be key to securing successful prosecutions.
GAMES WORKSHOP: warns on full-year profit / John Murray Brown, FT.
DZ profile: Games Workshop Group Plc
Business: high street stores selling fantasy model games such as Lord of the Rings and Warhammer best known for its Warhammer plastic figurines and the Lord of the Rings strategy battle game. Most sales still come through these stores and around 4,000 specialist hobby, games and toy shops worldwide. Online now accounts for around one-fifth of the group’s total sales. Strategy statement: “We make the best fantasy miniatures in the world and sell them globally at a profit and we intend to do this forever.”GW knows what it is — a manufacturer, not a retailer. The 500 or so Games Workshop stores are there to attract customers as the “front end of our manufacturing business,” with free painting classes and taster sessions, the company says.
Staff: Kevin Rountree, chief executive
Financials: to end of May 2015, the company reported £16.6m PROFIT on revenues of £119.1m.
Investment: Listed on Main Market, London Stock Exchange since Oct 1994
1. the company warned that full-year profits would drop after disappointing Christmas sales. Games Workshop said the fall in sales at its shops was partially offset by a 5.3 per cent increase in online revenues.
2. Has been trialling larger stores in locations with heavier footfall, such as Sydney, Munich, Paris and Copenhagen. It has also been reorganising its sales network, closing 13 stores and opening or relocating 22 “one-man” format shops, plus three larger outlets, in the past six months.
Warhammer creator a winner at communication | Andy Bounds, ft. October 28, 2018
3. The shares were the best performing on the FTSE in 2017, up by more than 250 per cent from 70.5p, and continued the run in 2018. Pre-tax profits almost doubled to £74.5m, from £38.4m, in the year to June 3 2018. Revenue grew from £158m to £220m. ...expect revenue of £235m and pre-tax profit of £68m for 2018.
4. Warhammer and Warhammer 40,000, set in space, require players to buy miniatures, paint them and fight battles according to a rule book, and is growing in popularity worldwide. More than 70 per cent of sales are outside the UK.
5. The shops that recruit new gamers are another barrier to entry for rivals — “Fortress Moat”. This approach protects Warhammer and Warhammer 40k, from cheap imitators. It enables it to create new characters and tell stories through games and social media. There are online painting tutorials, social media channels and a community site.
6. All models are made in Nottingham. The group has bought land to produce more creatures as production lines are almost full. Previous attempts to outsource to China failed as the quality was poor.