Wednesday January 1st 2020
News about8 UK growth companies and/or accelerators + turnover in the GRID marketplace, 23rd – 29th October 2016:
Rapha £48m | Car Throttle | Gusbourne £473k | CommuterClub | Ernest | Knomo | Café Football | Bloomsbury Publishing £123.7m
RAPHA: leads peloton | Oliver Shah, The Sunday Times. October 23
DZ profile: Rapha Racing Ltd
Business: clothing for cycling enthusiasts, kit provider to Team Sky until the end of this season. Named after a 1960s cycling team, has won admirers including Sir Bradley Wiggins, but its high prices have offended some purists. A jersey and pair of shorts from Rapha’s new Shadow range cost £480. Mottram said he planned to expand Rapha’s international business, which already accounts for more than 70% of sales.
Founder: Simon Mottram, 50, a former chartered accountant and branding consultant who loved cycling but tired of the garish clothing sold by sports retailers, set out to create sleek designs that could be worn in the pub as well as on the bike.
Staff: has grown its headcount from three to 350.
Financials: saw sales increase by a quarter to £48m, with pre-tax profits more than doubling to £1.1m in the year to the end of January.
Investment: partly owned by ACTIVE PRIVATE EQUITY, which is also invested in cycling retailer Evans Cycles, Honest Burger, Leon and Soho House.
1. Its membership programme, which offers access to 12 clubhouses around the world and subscription to Rapha’s bi-annual magazine, Mondial, now has 7,600 participants.
Former Team Sky cycle clothing supplier Rapha appoints bankers William Blair for sale | William Turvill, City A.M. April 24, 2017
2. Rapha was Team Sky's clothing supplier between 2012 and 2016
3. Rapha is gearing up for a sale, with bankers hired to weigh up the company’s future. Investment bank WILLIAM BLAIR has been appointed for a process that is likely to lead to a sale, although an initial public offering is also being considered.
4. ... achieved revenues of £63m in the year to January, up 30 per cent on the year before from £10m; profits increased from £1m to £4.5m.
5. The firm was a Team Sky clothing supplier from 2012 to 2016.
6. ...also established itself as an international cycling club in 2015 and now claims 10,000 members.
Face it, we’re addicted to growth | Kiki Loizou, The Sunday Times. May 28, 2017
7. Rapha was making sales of £7m when it first hit the Fast Track list in 2010. Rapha has grown with just £5m of external cash from backers including Active Private Equity. He has owned a minority stake in the business since it began, and now owns roughly 19%.
Talking about my Snapchat generation | Kiki Loizou, The Sunday Times
Business: one-stop online shop for motoring enthusiasts. Publishes everything from news articles about car sales to quizzes on the automotive industry as well as reviews.
Location: HQ in east London, offices in New York.
Founder: Adnan Ebrahim, 26
Investment: Last year the company won more than £1m investment from backers including Redalpine and Passion Capital.
News: Signed up to Snapchat two years ago Snapchat is one of five apps used every day to talk to the fans of his website. Has 1.3m subscribers to its YouTube channel, 2m weekly views on Snapchat and about 60m hits on its video content each month. Across all social media the venture claims 10m followers. Car Throttle It sometimes notches up 1m views in a day on Snapchat alone. Ebrahim said the key is to continually plug the company’s presence on other networks. “At the end of all our YouTube videos we direct people to Snapchat. We say that is where the conversation continues,” he explained.
GUSBOURNE: puts the sparkle back into the English wine industry as it angles a move in tourism sector | Francesca Washtell, City A.M. October 24.
Business: English sparkling wine - one of the sector’s most critically acclaimed producers. Gusbourne-grown wines were first released to widespread acclaim in 2010 and last year the group won six gold medals at global competitions despite it still being a modest producer. Gusbourne now has 231 acres of vines at two sites in Kent (main vineyards) and West Sussex. Around five to 10 per cent of production each year goes towards producing still red or white wines, though this is discretionary and if the year isn’t right, the company won’t make it. Gusbourne has an eight-year cycle, taking four years from planting a vine to reach full production and wine resting in the bottle for a further four years
Location: 20 minute drive from Ashford, Kent
Founder: chairman Andrew Weeber, South African, former orthopedic consultant, bought the estate in 2004 and began planting vines the same year.
Financials: Sales reached £473,000 last year, though continued investments also resulted in an operating loss of £1.12m. In July, it launched a bond issue to raise up to £10m to put towards capital expenditure on its recently-planted vineyards and equipment.
Investment: In 2013, the company became the first English winemaker to list on the London Stock Exchange. Gusbourne is almost two-thirds owned by Conservative peer Lord Ashcroft, who Weeber describes as a “supportive, but hands-off” shareholder.
1. Weeber: “With wine, you need a market, and we’ve got a market. We’re located on the edge of one of the greatest wine-consuming cities on the planet. London is a key market for us, because it’s an opinion setter.”
2. By the end of next April, Gusbourne is setting its sights on entering the wine tourism market, opening a visitor centre with a shop, events venue and, later, will begin conducting wine tours over the summer. Although some of the UK’s other major winemakers, such as Nyetimber, sometimes offer tours and tasting, Weeber is aiming for it to be an integrated part of the business.
3. In the medium term, Gusbourne is angling for 50 per cent UK sales, 25 to 30 per cent of its turnover to come from cellar door sales and the rest to be exported.
COMMUTERCLUB: co-founders talk desk dividers and the future of mobility | Harriet Green, City A.M. October 24.
Business: travel payment plan firm. The firm provides low-cost loans to users, enabling them to buy an annual public transport pass – whether that’s a season ticket or an Oystercard – then pay back via instalment plans. It works out around 30 per cent cheaper than buying weekly or monthly travelcards, which can cost well over £2,000 over the year. Customers make 11 payments at the same cost as a monthly travelcard, which includes a 5.6 per cent interest rate, saving £200 on average. The firm has over 10,000 users in London and the South East and a 97 per cent score on TrustPilot.
Founders: Petko Plachkov, managing director, and Imran Gulamhuseinwala, chairman, who both worked for Clive Cowdery’s firm, the Resolution Group
Financials: Loans issued by CommuterClub are funded by savers on P2P platform RateSetter
Investment: the pair have raised £1.2m on equity crowdfunding platform Seedrs, counting Andy Murray as a backer.
1. “We’re regulated like any credit provider, but regulation now is very modular, which means it’s easier to comply with.” Of course, the CommuterClub idea isn’t new, points out Plachkov – it already exists through big employers. “So to build something better, our task was to figure out carefully how the transport side worked, leverage P2P, keep regulation-light – we’re not a bank, but we need to be fit for purpose, and build a product that consumers actually want. The takeaway should be: ‘this is so easy, and it saves me money’.”
2. “It’s phenomenally good credit and, for their lenders on the other side, a great alternative asset class,” says Gulamhuseinwala. “We used P2P to help us get started, and the track record has been amazing – less than half a per cent of our entire loanbook has ever defaulted”, Plachov says. “We recognise that we need to diversify our funding base, but there is a real win-win in using it.” In the future, the pair are keen to consider direct matching – offering the same simplicity on the funding side and enabling private individuals to seek a return.
3. In the meantime, the focus is on expansion. “Transportation is all about very thin margins, which means scale – that’s why we’re growing very quickly,” says Plachkov. At the end of last year, CommuterClub rolled out the beta for nationwide coverage.
4. “One of the best things about going national is the traction we’re getting from employers”, says Gulamhuseinwala. Businesses are asking to use the software – which offers a simplicity many legacy systems don’t – and with CommuterClub now countrywide, they don’t have to segment their workforces. The company is already working with a long list of tech companies, from Airbnb to Onfido, and with UK government, offering the service to councils.
5. The small team (“if you’re building something that leverages automation, you don’t need loads of people”) is busiest at the end of each month, when payday comes round. The busiest time of year, however, is the period between Christmas and New Year. “That’s because of the fare increases on 1 January,” says Plachkov. “It’s not a big change, but it really pisses people off. Last December we blew our own targets. We’re going to work flat out this year, then we’ll go on holiday in January. You know your product fits when you can barely keep up; it’s so exciting.”
ERNEST: The free financial coach that sits in your Facebook | Harriet Green, City A.M. October 24
Business: intelligent finance coach, a bot, sits within your Facebook and connects with your bank accounts (an app will come later). He combines natural language processing technology with machine learning. Currently, the new technology has two modes of operation: answering questions and proactive notifications. Go on the website (Ernest.ai), and you can sign up for access to the beta.
Founder: Niall Bellabarba
1. At the turn of the year, the three-strong team will be raising £2m, with the funds put towards making the engine behind Ernest more intelligent and able to answer more complicated questions. Things like: “I want to buy a house; how much do I need to save for what deposit over the next six months?” You’ll also be able to do things like add other accounts – like your partner’s, so you can save together. Bellabarba is confident that now is the right time for technology like Ernest to enter the mainstream. “Machine learning technologies are progressing, language processing tech is a huge area of development and all the big companies are looking at the space.”
2. While doing an MBA, Bellabarba started to look at eye tracking technology. Roping in a couple of friends, they started a project – “as an academic exercise” – to see if there was any mileage in the idea. In the end, one of the companies they were talking to offered to pay them if they continued, and REALEYES DATA SERVICES was born. Bellabarba ran the company from 2007 to 2010, then sold it. It was after this that Bellabarba went into finance, joining iShares, which was then bought by BlackRock. “…from there, I set up WideRun.” WideRun was a VR training system for sports, but it came too early.
KNOMO: bag maker unveils London and New York expansion plans | Joanna Bourke, Evening Standard. October 26
Business: Luxury business bag maker. British brand, which sells £299 carry-on cases as well as laptop bags, sells its accessories online or in concessions such as Harrods and John Lewis. Counts Pippa Middleton and Samuel L Jackson as fans. Is now nearing a deal to open its first standalone shop in Covent Garden by the end of the year, with plans for three more in the capital by 2019.
Founder: former Credit Suisse banker, Howard Harrison
Investment: The expansion has been aided by a £3 million investment from private equity firm Rockpool.
News: plans to expand in London and New York. Has also sewn up an agreement to stock its goods in US retail giants Macy’s, Saks Fifth Avenue and Anthropologie.
CAFÉ FOOTBALL: Ryan Giggs and Gary Neville expand restaurant empire in Far East | Michael Bow, Evening Standard. October 26.
Business: has branches in London and Manchester and will open in Singapore in 2017. A third Café Football in the UK is due to open this year at Manchester’s National Football Museum.
Founders: Ex-football Manchester United stars Gary Neville and Ryan Giggs
1. Are moving their restaurants chain abroad for the first time to the home turf of the duo’s Singaporean backer Peter Lim.
2. More café and hotel sites are planned for China, Thailand, India and Malaysia, Neville and Giggs told Bloomberg, as they ramp up expansion plans.
3. Lim, Giggs and Neville are co-owners of GG Hospitality. It runs a hotel close to Manchester United’s Old Trafford ground and a second site is planned for Manchester’s old stock exchange.
BLOOMSBURY PUBLISHING: gets boost from Harry Potter and Pope Benedict XVI books | Joanna Bourke, Evening Standard. October 27
Business: Book publisher
Financials: buoyant period for the firm in six months to August 31 - revenue up 19% to £62.7 million. (£123.7m in year to 29 February 2016.) Digital sales rose 8% and print revenues jumped 25%. Pre-tax profit dropped to £100,000 from £300,000 after losing a key contract.
1. Nigel Newton, the boss of Bloomsbury Publishing has revealed Harry Potter is still working his magic for the business, and said a new book from Pope Benedict XVI would boost second-half sales and that there has been “huge” pre-order numbers for the retired Pope’s autobiography Last Testament. Kindle and hard-copy demand has been strong in the UK, Ireland, America and Australia.
2. Bloomsbury web site: "...the Bloomsbury 2020 investment will significantly accelerate the growth of digital revenues by implementing a new digital publishing plan in our move to become a leading non-consumer publisher in the B2B academic and professional information market. The plan is to increase the output and speed to market of a range of new digital products, provide a robust scalable set of platforms, and improve the strength, depth and geographical spread of our institutional digital sales team.
...The principal focus for Bloomsbury 2020 this financial year is to deliver the digital platform upon which many of the new services will be based, and to hire the new content acquisition team and sales and marketing teams. We are on track to achieve these, with the first services on the new platform, the Arcadian Library Online and Bloomsbury Popular Music, launching this financial year as scheduled. Having digitised and developed Arcadian Library Online, Bloomsbury will be providing sales, marketing and distribution services to make it available to universities, libraries and individuals around the world as a perpetual access product. Popular Music will be a Bloomsbury subscription service for institutions."