News about 8 UK growth companies and/or accelerators + turnover in the GRID marketplace, 12th - 18th June 2016:
Vinaya | Calm | Red Arch £3.7m | Imperial Innovations | Mission Therapeutics | Yoyo Wallet | Cell Medica | Feature Space
* OFF-GRID: Auto Trader £281.6m | Oxford Instruments £361.1m
* AUTO TRADER: boss in £80m windfall | Daniel Dunkley, The Sunday Times. June 12.
Business: web site to buy and sell new and used cars
ICB Classification: 5377 Specialized Consumer Services
Staff: Trevor Mather, 48, CEO in 2013. Has scooped share windfalls totalling £80m since joining the second-hand car website just three years ago. In April, Mather sold 7.1m shares worth £26.4m. He retains a £50m share hoard.
Financials: Revenues rose 10% to £281.6m in the year to the end of March, generating £177m of cash over the period. Reported a 19% rise in underlying operating profits to £171m.
Investment: was jointly owned by Guardian Media Group and buy-out firm Apax. GMG sold its 50.1% stake to Apax for £619m. Apax sold its remaining shares in the business last week and made £76.4m from the sale.
After a surge in its fortunes, Auto Trader now stands on the cusp of the FTSE 100 with a market value of £4.3bn.Auto Trader’s share price has increased 60% since the company floated last spring
Digital detox. Entrepreneurs are seeking ways to shut out the background noise | Kiki Loizou, The Sunday Times
Business: Vinaya Wearable technology that filters out online noise. Launched Altruis, hi-tech jewellery programmed to send a subtle vibration when important contacts get in touch, allowing other calls and messages to be ignored. The company’s latest Zenta range uses biometric sensors to track a user’s emotions through a bracelet and keeps a record of their behavioural patterns.
ICB Classification: 3763 Clothing & Accessories
Location: Shoreditch, east London
Founder: Kate Unsworth, 28
Investment: Through a crowdfunding campaign on Indiegogo the business has already pre-sold about 1,000 Zenta bracelets and raised more than $150,000 (£100,000) to take the products to market next year. Has also raised cash from more conventional sources. Last year she banked almost £2m from venture capital firms Passion Capital and Playfair Capital. Other shareholders include Michael Birch, who founded the social network Bebo, and Robin Klein, an investor who backed Lovefilm and Zoopla. Eileen Burbidge, partner at Passion Capital, who is also chairwoman at the government’s Tech City UK.
Business: free mobile app that trains users to meditate, be more “mindful” and reduce stress levels. More than 5m people worldwide have downloaded it so far.
ICB Classification: 5377 Specialized Consumer Services
Founder: Michael Acton-Smith, the entrepreneur behind Mind Candy, the maker of children’s game Moshi Monsters.
Investment: has raised more than $1m from angel investors to date
News: is now taking Calm into classrooms. He will offer the app free to every teacher in the world who can pass on the lessons to children growing up in a digital age
RED ARCH: Need to fire up the Audi? Try my turbocharged start-up | Laura Onita, The Sunday Times
Business: Red Arch churns out 100,000 performance parts a year. Its products are fitted to Rolls-Royces, Aston Martins, Range Rovers and BMWs. There are plans to add to the range of 400 products and to rebalance exports: 97% of sales are to Germany.
ICB Classification: 3355 Auto Parts
Location: Daventry, Northamptonshire
Founder: Engineer Mike Theaker, 50, and his wife, Jackie, 53, own 70% of the business with the rest split between three company directors.
Staff: 40 engineers, technicians and support staff
Financials: making profits of £200,000 on £3.7m sales. Foreign sales accounted for 95% of revenues last year, earning it a Queen’s award for international trade. Revenues are expected to reach £7m this year, but prospects could be hindered if Britain votes to leave the European Union in the June 23 referendum.
Investment: launched with £320,000 savings.
1. Although lucrative, selling to the higher end of the car industry has its challenges. “We have to guarantee continuity of supply,” he said. “Stoppages can cost tens of thousands of pounds a minute.”
2. Burgeoning demand for accessories is mostly down to car leasing,
3. Red Arch brought manufacturing in-house in 2010 as demand grew. “We were finding it more difficult to get the quality and quantity we needed from our suppliers,” he said. Theaker dug deep into his funds to open a £1m state-of-the-art manufacturing plant last year. “We decided not to go for second-hand machinery but bite the bullet and buy equipment that produced the quality we needed.”
“Right now we’re able to move products about in a very simple way,” said Theaker. “If there’s a trade deal there will be additional costs to our customers in Europe.”
Neil Woodford builds stake | Madison Marriage, FT. June 14
DZ profile: Touchstone Innovations Plc
Business: technology-focused investment company. Has links to researchers at Imperial College London, the University of Oxford and the University of Cambridge, with stakes in a range of early stage science and technology companies.
Financials: made a pre-tax loss of £5.9m in the six months to the end of January, and has never paid a dividend.
Investment: Aim-listed company
1. Neil Woodford, WOODFORD INVESTMENT MANAGEMENT, set up in 2014 has built up a 21 per cent / £11.6m stake in Imperial Innovations, underlining the fund manager’s commitment to backing small British companies with scientific expertise. The stake in Imperial Innovations is divided between his two funds, Woodford Equity Income and the Patient Capital Trust. Woodford Equity Income, which has £8.7bn of assets, primarily invests in companies that deliver sustainable dividend growth. Mr Woodford, the UK’s best known fund manager who won over investors during his 25 years at INVESCO Perpetual by turning a £1,000 investment into £23,000.
2. Companies backed by Imperial Innovations, mentioned in this article:
Business: is developing technology to treat oncology-related conditions and neurodegenerative illnesses such as Parkinson’s disease. University of Cambridge spinout.
ICB Classification: 4573 Biotechnology
Staff: Dr Anker Lundemose – CEO; formerly CEO of Norwegian vaccine company Bionor Pharma; Mission is his fourth CEO position and he has been involved in a total of six biotech exits/IPOs.
Investment: Imperial Innovations investment £5.8m; % share holding 21.6%; Carrying value £10.1m
DZ profile: Yoyo Wallet Limited
Business: Yoyo Wallet is a smartphone app that acts as a virtual wallet. Has created an app that offers a better experience for retail customers, simplifying and speeding up in-store transactions by combining payment and loyalty via one easy scan. Yoyo also provides a marketing platform for retailers that enables digital customer engagement in-store. Retailers also gain tools to better target customers through loyalty rewards, offers and incentives. “Founded at Innovations by a team of highly experienced entrepreneurs from the card and mobile payments industries.” The app was launched in early 2014 across 32 food and drink outlets at Imperial College London. By August 2015, the team has signed 21 Universities as customers. The team have also deployed the solution at 34 head office corporate catering locations.
Founder: Alain Falys, CEO & Co-founder, is a Venture Partner of Imperial Innovations and was the co-founder and former CEO of OB10, the world’s largest electronic invoicing network which was sold to Tungsten in 2013 for £99m and subsequently floated on AIM in 2013 as Tungsten Corporation. Prior to that was Senior Vice President of Visa.
Investment: Imperial Innovations (now TOUCHSTONE INNOVATIONS) investment £7.0m; % share holding 51.4%; Carrying value £9.5m
Yoyo raises £12m as fintech defies Brexit fears | Martin Arnold, FT. June 27
1. ...has raised £12m from investors including the German retailer METRO GROUP and fund manager NEIL WOODFORD to finance its expansion in Europe and the US. … takes the total Yoyo has raised in three rounds to over £20m. Other investors include Taavet Hinrikus, co-founder of TransferWise. Its latest fundraising was also backed by Touchstone Innovations, the Aim-listed venture capital arm of Imperial College London.
2. Yoyo, which recently passed the milestone of processing more than 1m monthly payments for its 400,000 registered users, has grown rapidly since its creation four years ago as a mobile app to pay for goods in university student unions.
3. 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.
4. It allows consumers to pay for goods using their mobile phone and keeps all their loyalty card schemes updated automatically. Companies find it useful to track customer behaviour and to send personalised offers to them over the app. “We address a fundamental problem for retailers — they want to know their customers better,” said Alain Falys, the former Visa executive who co-founded Yoyo. “We have combined the best of Starbucks mobile experience with the advantages of Tesco’s Clubcard scheme,” said Mr Falys. He said that unlike banks — which struggle to tell a retailer what products a customer bought — Yoyo allows them to build a profile of each client. “You get to reach out and communicate eyeball-to-eyeball with your customers.”
5. Mr Falys also forecast that the EU’s incoming Payment Services Directive 2, forcing banks to allow third party payment providers to access their clients’ accounts, would create an opportunity for Yoyo to bypass big lenders and pass savings on to its clients.
6. The company has 60 staff and tens of millions of pounds in revenues.
7. It recently appointed as its chairman Phillip Riese, the former president of American Express consumer credit cards, who is an investor in the company.
Business: is developing treatment for post bone-marrow transplantation viral infections
Founder: Gregg Sando – CEO. After a career in investment banking, completed his Immunology MSc degree at the medical school of Imperial College. Formed Cell Medica in cooperation with a small group of the leading clinicians and immunologists who were pioneering this new mode of medical treatment.
ICB Classification: 4573 Biotechnology
Investment: Imperial Innovations investment £12.3m; % share holding 27%; Carrying value £21.0m.
Business: Predictive data analytics company seeking to predict how people react to situations based on behavioural patterns. The technology can be applied to any business that generates and needs to understand large amounts of data, such as retail, finance, mobile, gaming, fraud prevention, customer insight, security and insurance. The company has developed a behaviour analytics engine (ARIC) based on Bayesian statistics and research undertaken at the University of Cambridge by Professor Bill Fitzgerald and Featurespace CTO, David Excell. The ARIC engine began in the University of Cambridge’s Engineering Department.
ICB Classification: 2791 Business Support Services
Staff: Martina King – CEO. Former Managing Director of augmented reality company Aurasma, Martina King has an extensive career in media technology and was previously Managing Director of Capital Radio and Yahoo Europe. She is also currently a non-executive director of Cineworld and Debenhams.
Investment: Imperial Innovations investment £3.9m; % share holding 37.5%; Carrying value £6.8m.
* OXFORD INSTRUMENTS: swings into profit; revenues drop | FT. June 16
Business: maker of high-technology research tools. Started in a researcher’s garden shed and became Oxford university’s first commercial spin-off
ICB Classification: 2757 Industrial Machinery
Financials: before tax of £13.1m in the year ended 31 March, following lower restructuring costs that led to a £9.6m reported loss last year. Adjusted profit before tax – removing one-off items – was up 3.6 per cent to £37m, in line with expectations. Group sales were down 4.9 per cent to £361.1m amid pricing pressure from MRI system manufacturers and reduced demand for superconducting wire. Saw revenue drop last year due to lower sales of its superconducting wire, which is used in hospital MRI scanners.
1. Has been hit in recent years by factors such as slowing demand for analysis products in China, pressure on funding for US research and economic sanctions against Russia. This led to two profit warnings in 2015.
2. Recent appointment of a new chief executive, finance director and chairman-designate.