News about 9 UK growth companies and/or accelerators + turnover in the GRID marketplace, 18th – 24th September 2016:
Gtech £66m | ESG £77.3m | Harry Specters | Livity £5m | Connection Crew | Union Hand-Roasted Coffee £9.2m | Oxbotica | Ginx TV | Bricklane.com
GTECH: boss cleans up | Robert Watts, The Sunday Times. September 18, 2016
DZ profile: Grey Technology Limited (Gtech)
Business: makes cordless hedge trimmers, lawn mowers, strimmers, vacuum cleaners and an electric bike unveiled last year, featuring a lithium-ion battery disguised as a water bottle. First success was a cordless electric floor sweeper in 2002.
Founder: Nick Grey, 48. Grey left his job at the appliances maker Vax in 2001 to set up his own company, with the aim of producing cordless vacuum cleaners. Gtech — short for Grey Technology. He resigned and put down £6,000 apiece on two buy-to-let flats. The rental income was enough to cover the loans on both, plus Grey’s own mortgage. He then lived on £18,000 of savings for 18 months while he worked on a prototype.
Financials: Gtech’s profits climbed to £12.9m on turnover of nearly £66m in 2015. Has seen sales nearly triple in just one year. Assets have nearly doubled to £15.7m in 12 months.
Investment: The inventor and his family own all of the Worcestershire business, which paid a dividend of £4m last year.
Gtech bumpkin Nick Grey blows hot and cold on Dyson | Oliver Shah, The Sunday Times. August 27, 2017
1. …more than 200 employees and sales that should hit £120m this year. It has expanded into electric bikes and lawnmowers.
2. Gtech pulled its products from John Lewis in 2014 …. they are talking once more and Grey hopes to “partner with them again this autumn”.
Gtech, founded by Nick Grey, cleans up | Liam Kelly, The Sunday Times. September 2, 2018
3. ...pre-tax profits up 56% to £15.4m in the year to last November; sales up by £30m to £120m ....did not pay a dividend. Instead, it invested profits in research and development on new battery technology.
4. Gtech’s history has been marked by a series of rows with DYSON, which turned over £2.5bn in 2016, with both sides taking legal action against the other in disputes over various advertising claims.
ESG: 3i puts Midlands boffins on the block | Daniel Dunkley, The Sunday Times
Business: environmental and food testing business that inspects trains, laboratories, hospitals and shopping malls for toxins and other health and safety risks. It has more than 5,000 clients, including Sellafield, the nuclear fuel reprocessing and decommissioning site. It also works with Dong Energy, the Danish owned wind farm developer that completed a £10bn stock market float this year. ESG operates from more than 30 sites in Britain, and employs more than 1,300 people after completing 15 acquisitions in eight years.
Location: Burton upon Trent, Staffordshire
Financials: made an underlying profit of £8.4m last year on turnover of £77.3m, according to accounts for 2014, the most recent available
Investment: FTSE 100 private equity firm buyout firm 3i took Inspicio private in 2007 for £345m. It sold off chunks of the business to buyers including French giant Bureau Veritas. The rump of the company was renamed ESG in 2010.
1. 3i has hired DC Advisory to find potential buyers for ESG. Bankers said the business would be worth £100m at auction. 3i declined to comment.
2. A sale would leave 3i with a dwindling pool of British companies in its portfolio. This summer it sold Mayborn, the owner of Tommee Tippee cups, to Chinese buyer Ping An. Its other British business, Agent Provocateur, has also been tipped for a sale.
Start-ups with a mission — and a story to believe in | Emma Broomfield, Sunday Times. September 18.
Business: Chocolate company and social enterprise founded to create jobs for young people with autism. Every truffle produced is handmade to exacting standards. Production of up to 7,000 chocolates a day for customers such as healthcare giant Johnson & Johnson and Microsoft.
Founder: Mona Shah, 46. Shah dreamt up the blueprint for Harry Specters with husband Shaz, 50, in 2011 after growing concerned about what their autistic son Ash, then 13, would do after finishing his education.
Staff: one full-time and two part-time staff - and uses six contractors - all of whom are autistic.
1. Only 15% of the 350,000 working-age people with autism in the UK are in full-time work.
2. This year, to cope with growing demand, she moved from Cambridge to larger premises in nearby Ely.
3. Plans to franchise the model across the UK, believing there is a growing appetite for their offer. “What sets us apart, like most social enterprises, is we have a personal story that people engage with.”
Business: youth marketing agency and social enterprise. The thousands of young people it mentors each year receive training and support, while the work Livity produces for clients benefits from their insight. Counts Google, Barclays and Unilever as clients.
Location: Brixton, southwest London
Founder: Sam Conniff, 40 and Michelle Morgan, 45, to
Financials: has sales of £5m
Investment: Livity has secured a £1.5m investment from social fund Impact Ventures UK in return for a minority share. The fund, managed by LGT Venture Philanthropy and Berenberg Bank, received £15m from Big Society Capital. It aims to provide long-term growth capital for innovative social enterprises.
News: It launched a sister operation in South Africa in 2011.
Business: social enterprise that sets up live events, and since 2004 has helped create 144 jobs for people with a history of homelessness. Initially the aim was for the entire crew to be composed of formerly homeless people but that model could not be sustained. The Ideal Home Show and Royal Ascot are clients.
Founders: Warren Rogers,37, co-director and Charlie Dorman, 38.
Staff: fluctuating workforce of about 100
News: They now offer a 10-week on-the-job training programme for people who have been homeless.
UNION HAND-ROASTED COFFEE: We sold out to Starbucks but couldn’t kick addiction | Laura Onita, The Sunday Times
DZ profile: Lunar Ventures Limited
Business: Union’s whole-bean and freshly ground coffee is sold by Waitrose and Ocado. It is also served in restaurants and cafes across the country, which accounts for 70% of revenues. Today they buy from about 40 farmers in 14 countries, including Rwanda, Costa Rica and Ethiopia. The beans, including the geisha variety from Panama, which Union sells for £100 a kilogram, are hand-roasted in batches. They use two 50-year-old Probat roasters and check the colour and temperature at all times.
Location: Canning Town, east London
Founders: Steven Macatonia, 56, a former medical research scientist, and Jeremy Torz, 53, previously an optician,
Financials: Last year the company posted pre-tax profits of £740,000 on sales of £9.2m. Total sales are expected to hit £11m this year.
Investment: with £400,000 from the sale of their business to Starbucks in 1998, they bought warehouse space in Canning Town, east London, and set up Union Hand-Roasted Coffee. The founders own 90% of Union, with the rest held by friends and family.
1. went to coffee plantations in Guatemala to learn about sourcing high-quality beans and realised how invisible so many farmers are and how little influence they have on being able to ask for a sustainable price for their coffee.
Back in Britain, they decided to work directly with growers and co-operatives. The founders claim to pay farmers almost double the current benchmark arabica coffee price per lb of $1.72.
2. Last year Union launched Coffee Club, a subscription service delivering coffee to buyers’ doors, to boost online orders.
Caffeine for connoisseurs with a conscience | Rhymer Rigby, FT. April 21
3. … has won a Queen’s Award for sustainable development 2017
4. The company has a longstanding relationship with the Abahuzamugambi Ba Kawa co-operative in Rwanda. When the project started in 2002, Rwandan coffee was only commodity grade and traded at poor prices. However, Union recognised that many of the farmers were growing Bourbon coffee plants — an arabica cultivar — which had the potential to produce high-quality, premium-grade coffee. Working in conjunction with the development agency USAID, Union showed the farmers how to process their crop in order to end up with a better and more consistent product. Union launched its first Rwandan single origin coffee in 2002 “and now speciality roasters are clamouring for Rwandan coffee”, he says. “We started with 300 poor farmers in a ghost town and we now work with 5,000 farmers who have 20,000 family members. The town is a thriving community.”
Union also aims to improve working conditions. “… we’ve worked with growers to construct good-quality dormitories and toilets.”
5. “We don’t report to shareholders and the choices we make in business are not driven by absolute profitability,” he adds. “Sourcing ethically requires a huge amount of work and administration.” However, the sector is buoyant, and the coffee market in the UK is still expanding. Last year, Union turned over £11.5m, bought 500,000kg of coffee and grew by 20 per cent.
OXBOTICA: Oxford smart cars take on US technology giants | Peter Campbell, FT. September 19, 2016.
DZ profile: Oxbotica Limited
Business: driverless technology. Oxbotica builds more than just the sensors and lasers needed to guide the vehicle along public roads — it makes the robotic brain, the software that powers the entire system, processes the data and learns from mistakes to improve all the time. Because they learn from driving experiences, the cars will become increasingly smart in their environments as they become more familiar with the roads and conditions.
Launched: 2014. has been an independent company for less than two years
Founder: Professor Paul Newman
Financials: does not disclose accounts, but says it has made a profit every year so far.
Investment: spinout from Oxford University has received several million pounds of funding.
1. ...the group’s technology already in warehouse forklifts, mining lorries and even on Nasa’s Mars rover. Professor Newman sees cars, taxis, driverless pods and forklifts as “applications” of the underlying technology that can learn from the experiences of each other.
2. The company is set to roll out driverless pods in Greenwich and Milton Keynes that use its systems under programmes part-funded by the UK government to spur homegrown development in driverless technology. The investment drive, which will see up to £100m allocated to research projects, has also led to similar schemes in Coventry and Bristol. In Greenwich, London, the company’s technology will power driverless taxi pods for use in pedestrianised areas.
Oxbotica looks to expand globally in fundraising | Peter Campbell, FT. September 19, 2018
Start-up and brains behind self-driving cars to double workforce as it considers IPO
3. …has raised £14m to fund a doubling of its workforce and expand globally, with the possibility the company will consider an initial public offering in the future. .....has developed self-driving software that can be sold into any ground vehicle, from port trucks and mining vehicles to cars. Its systems are in use in a number of parts of the world, as well as on NASA’s Mars Rover. Its new shareholders include AXA, the insurance company, IP GROUP, which helps businesses commercialise intellectual property, and PARKWALK ADVISORS, which invests in fast-growing university spinouts.
4. The funding will allow Oxbotica to open new offices in North America and Asia, taking on new teams as it works with customers to integrate its technology into their products. It is targeting an office in Silicon Valley, Japan and Australia, as well as possibly China and another North American destination. Oxbotica will grow to about 200 employees under the current expansion phase, he added.
5. ... has developed a system that allows vehicles to learn from the mistakes of other cars on the road, enabling them to become more adept with every journey. It licences the technology, or part of it, to companies wanting to develop their own self-driving vehicles, allowing the business to scale without needing to ship parts or components. The company is trialling cars driving around Oxfordshire, and will run a fully autonomous fleet of cars between London and Oxford next year, as part of a trial to gather data and test new services, such as how insurance products will work on self-driving cars.
GINX TV: ITV and Sky buy stakes in 24-hour video gaming TV channel | William Turvill, City A.M. September 20
Business: owner of a channel that screens video gaming 24 hours a day. Ginx TV broadcasts Turner's ELeague tournament, FaceIt's eSports Championship Series, and Valve's The International Dota 2, among other programmes. Ginx eSports TV, the UK and Ireland’s only 24-hour esports channel, launched on Sky in June.
Financials: reported gross assets of £0.9m and a pre-tax loss of £0.7m in the year to 31 December.
Investment: ITV and Sky have each invested £1.55m in Ginx TV for 16.5 per cent shareholdings. Both companies also have the option to increase their stakes. Sky has also recently invested in the Drone Racing League and TV rights online marketplace TRX.
BRICKLANE.COM: This new proptech startup wants to help generation rent buy their first home | Lynsey Barber, City A.M. September 22
Business: property technology (proptech) startup which launches today. Designed to help first time buyers to get on the first rung of the property ladder. Calculates that a £1,000 investment in properties in the three cities in the last five years would give annual returns of 6.3 per cent. Savers will be able to take advantage of the tax free returns by putting as little as £100 in the account and contributing £50 per month, while existing Isa accounts can be switched over. Heawood: as well as property returns being significantly higher than returns on cash savings accounts amid record low interest rates right now, there is also an element of social good since those tenants in the rental properties will know their cash is going towards helping someone in the same situation as them.
Founder: Simon Heawood
Investment: has landed £1.3m in seed funding from online property pioneer Zoopla and Robin Klein's venture capital firm LocalGlobal, has alongside further unnamed investors within the finance, technology and property worlds. Cash will go into a Real Estate Investment Trust (REIT), which will invest in rental properties in Birmingham, Manchester and Leeds with investors making returns from the rental yield. A second fund will follow to invest in London property.
News: Klein has invested in other proptech startups, including Zoople, artificial intelligence powered mortgage advisor Trussle and the self-styled "Amazon for renting" Goodlord. Klein: “Bricklane.com’s product is an elegant, tech-enabled answer to the problems of the housing crisis, and could help a whole generation of people who feel shut out of the market gain an entry …Their property Isa connects savers with investments in a uniquely user-friendly way that could revolutionise the way young people save for their first home, as well as providing a higher quality service for tenants.”