Thursday February 14th 2019Ends
Thursday February 14th 2019
News about 14 UK growth companies and/or accelerators + turnover in the GRID marketplace, 6th - 12th November 2016:
Electric Jukebox | Loungers £48m | Evans Cycles £133.4m | ASI Data Science | Allworld | Featurespace | Darktrace | Magic Pony | Echobox | Cleo | Ultimate Products £60.7m | Pepa & Co £204k | Coinvestor | Azzurri £233.8m
ELECTRIC JUKEBOX: Sheryl’s jukebox bet | Peter Evans, The Sunday Times. November 6 2016
Business: digital music venture which claims it takes “music streaming to the mainstream” and wants to take on streaming services such as Spotify, Apple Music and Tidal. Unlike Spotify and other app and online-based music streaming services, Electric Jukebox is a piece of hardware that plugs into a high-definition TV and is controlled by a voice-activated remote device. It will cost about £150. It has secured licensing agreements with labels including Sony, Warner Music and Universal, which will also become shareholders.
Founder: technology entrepreneur Rob Lewis
Investment: investment by a listed company backed by the property tycoon Nigel Wray. Other investors include former EMI boss Alain Levy, Sir Malcolm Williamson, the senior independent director at insurer Aviva and a former chief executive of Standard Chartered, Robbie Williams, Stephen Fry and Sheryl Crow.
1. Will raise £8m when it reverses into an AIM-listed company this week.
2. Spotify, the world’s biggest music streaming service, has more than 100m users and is rumoured to be considering a market float next year. It made a loss of $200m (£160m) last year.
LOUNGERS: Pub stake on the menu | Daniel Dunkley, The Sunday Times
Business: 77-strong pub chain. Set up Loungers in Bristol and the model - known for its distinctive decor and gastropub food - has since been rolled out nationwide.
Launched: in 2002
Founders: Alex Reilley, Jake Bishop and Dave Reid (who sold out in 2012)
Financials: most recent accounts showed an operating profit of £2.5m in 2015 on turnover of £48m. It is forecast to generate underlying annual earnings of about £15m.
Investment: Reilley and Bishop own just over 50% of the business, alongside the private equity firm Piper.
News: are to sell a large stake in their bar and restaurant empire in a £150m deal. The founders have drawn the interest of buyout firms Equistone and Inflexion Private Equity. Pub chains Fuller’s and Greene King have also been mooted as potential buyers. The advisory firm GCA Altium has been hired to find potential buyers. Piper is expected to sell all its stake. Reilley and Bishop want to retain a shareholding, and may even decide to hang on to their controlling interest.
Evans Cycles wheels in garden centre chief | The Sunday Times, The Sunday Times
Business: cycle store chain
Financials: Profits slumped in the year to October 2015, but its trading is thought to have improved since this summer. Pre-tax profit for the year ending October 31, 2015 fell to £1.36m, down from £4.46m during the prior 12-month period. Evans said that impacted gross margins and resulted in lower sales growth than planned, although turnover grew 4.5% to £133.4m after it opened seven new stores
Investment: ECI Partners, which bought the bike retailer from Active Private Equity for £80m in May last year
News: EC1 is understood to have hired Andy King, 55, from Dobbies Garden Centres as the new boss to replace chief executive., Nick Wilkinson, who left in September. King stepped down after three years at the helm of Dobbies when the company changed hands this summer, but he continues as an adviser to the board. Internal sources said that King had been found by headhunters at Clarity Search.
ASI DATA SCIENCE
Business: AI school - trains computer scientists in using artificial intelligence. Works with companies including easyJet and the BBC
Investment: £1.5m of new investment. Investors include LocalGlobe and Jaan Tallinn, one of the founders of Skype.
ALLWORLD: Marine’s trade fairs on parade for £400m | Simon Duke, The Sunday Times. November 6
Business: exhibitions business whioch organises trade shows and corporate jamborees in Asia and the Middle East. Allworld was created two decades after Kelly’s father, Leo, led a management buyout of the Asian wing of exhibition organiser Andry Montgomery.
Staff: CEO, Brendan Kelly, 54, took the reins in the early 2000s after his father retired. Previously he served with the Royal Marines, in the Special Boat Service
Financials: Allworld makes underlying profits of about £30m a year and is likely to fetch between £375m and £450m, industry and city sources said. Kelly and UBM declined to comment.
Investment: Sources with knowledge of the auction said Kelly is the sole owner of the business. It is unclear, however, whether other family members have shares in the business, which is controlled by offshore vehicles.
1. Kelly put Allworld up for auction earlier this year and a takeover is expected to be sealed by Christmas. A larger rival, UBM, which runs the world’s biggest jewellery fair, in Hong Kong, and has a market value of £2.8bn is considered to be the frontrunner in the race, sources said.
2. Kelly could earn as much as £400m from the sale and become a new entry on The Sunday Times Rich List — ranking somewhere between preppy clothing tycoon Johnnie Boden and advertising magnate Sir Martin Sorrell.
3. Tim Cobbold, the boss of UBM, has ample resources to outbid rival bidders, which include several private equity firms. Last year he offloaded its PR Newswire division for $841m (£672m). Cobbold has made no secret of his desire to make further acquisitions after swooping on US events competitor Advanstar in a £600m deal two years ago.
Britain can crack AI, if we put our minds to it | Kiki Loizou, The Sunday Times
Five British AI start-ups have been bought by giants of the tech world over the past four years. DEEPMIND, whose systems learn how to play computer games like a human being, was acquired by Google for £400m two years ago. In February, SWIFTKEY, which works on predictive mobile phone keyboards, was bought by Microsoft for more than £200m. Thanks to the plethora of ideas spilling out of an elite group of universities, at least four more businesses are thought to be on the radar of American predators.
DZ profile: Featurespace Limited
Business: fast-growing artificial intelligence developer specialising in fraud detection. CAMBRIDGE UNIVERSITY spinout that uses AI and behavioural analytics to identify fraud more accurately, sells its software to banks, bookies and payment providers. It also helps financial firms to detect and prevent fraud in real time.
Founders: David Excell, an Australian academic, and the late Bill Fitzgerald, a Cambridge professor
Investment: CAMBRIDGE ANGELS GROUP, CAMBRIDGE CAPITAL GROUP, HIGHLAND EUROPE, INVOKE CAPITAL PARTNERS, NESTA VENTURES, TOUCHSTONE INNOVATIONS, TTV CAPITAL, WORLDPAY
1. five former Mike Lynch (founder of Autonomy) employees among its staff — and ARM Holdings, another tech world-beater founded in Cambridge, has also been a rich source of recruits. Dr Mike Lynch on the board of directors.
Fraudbuster Featurespace, led by Martina King, raises £25m | Liam Kelly, The Sunday Times. January 27 2019
2. chief executive Martina King, former managing director of YAHOO EUROPE and CAPITAL RADIO… ex-GUARDIAN MEDIA GROUP …who worked for Mike Lynch at Autonomy
3. received a $25m investment in a round led by New York-based private equity firm INSIGHT VENTURE PARTNERS and MISSIONOG. It takes the total raised so far to £53m. Investors include Mike Lynch’s Invoke Capital. Martina King, said the cash would be used to hire staff and increase operations in Europe and America.
Mike Lynch quits Featurespace after $25m funding | Simon Duke, The Times. January 29 2019
4. Mike Lynch, 53, former chief executive of Autonomy, has stepped down from the board of Featurespace. Mr. Lynch was charged with conspiracy and fraud by American prosecutors over the sale of the company he founded to Hewlett-Packard in 2011. He has also stepped down from the board of DARKTRACE, a cybersecurity company worth more than £1 billion which counts Invoke as its largest investor. Mr Lynch resigned this month as a director of SOPHIA GENETICS, a Swiss genomics start-up, when it raised $77 million of new financing.
DZ profile: Darktrace Limited
Business: cyber-security company tipped as one of the world’s hottest AI start-ups by Silicon Valley analysts. Its technology learns from previous cyber-attacks to give clients personalised security. Each attempted hack makes its system more intelligent. It already has 22 offices and customers in 20 countries.
Staff: Nicole Eagan, chief executive
Financials: last year saw 600% growth in revenues
Investment: Money has come from investors including HOXTON VENTURES and America’s SUMMIT PARTNERS as well as Autonomy founder Mike Lynch, to fund international expansion. Last year Mike Lynch, founder of Autonomy, led an $18m investment round. In July, raised $65m from backers, including the global private equity house KKR. The injection gave the company a valuation of more than $400m. Lynch wants to see Darktrace flourish further instead of agreeing to an early sale.has won more than $40m (£27m) in backing and has a valuation of $100m.
Hot UK cyber security startup Darktrace raises $75m series D at $825m valuation | Lynsey Barber, City A.M. July 11, 2017.
1. has raised $75m (£58m) in a series D round of funding, valuing it at $825m, almost double of what it was when it raised $65m this time last year. The fresh cash comes from INSIGHT VENTURE PARTNERS, a new investor which led the round, with existing investors Summit Partners, KKR and TENELEVEN VENTURES coming back for more. It brings total finding for the startup which has also been backed by Mike Lynch, the founder of Autonomy and one of the UK's most successful entrepreneurs, to $179.5m according to Crunchbase.
2. Darktrace's growth continues apace, with staff numbers doubling in the past 12 months to 500, the total value of its contracts with businesses such as BRITISH LAND and METRO BANK worth $200m, up 140 per cent on the previous year the startup said.
3. Darktrace's innovative Enterprise Immune System product uses AI to monitor company's systems, spotting any unusual activity and potential breaches as it happens rather than after the fact, and alerting
Cyber security group Darktrace earns $825m valuation | Hannah Kuchler, FT. July 12, 2017.
FT READER COMMENT - Under the hood: “$200M in committed business, 500+ employees, dual HQ of the UK and San Francisco. But I smell a rat because according to companies house, Darktrace has such small revenue that it falls below the reporting thresholds and its parent company is a British Virgin Islands company. So maybe a great success story with a great technical team in place, but it seems disingenuous to claim to fly a British or US flag when in reality all the returns will be channeled offshore. Happy for my poor financial acumen to be corrected.”
DZ profile: Magic Pony Technology Limited
Business: video-picture-enhancing venture
Investment: backed by venture capital company BALDERTON CAPITAL. Recently, Twitter bought Magic Pony for £122m.
News: Suranga Chandratillake, a partner at Balderton Capital said a takeover by a larger tech business is sometimes unavoidable. “Magic Pony built an amazing system, but for it to have real scale it had to have access to one of the big repositories of video and image data — and there are few of those,” Chandratillake said. Selling out to a foreign bidder may sound like a bad thing for Britain’s economy, yet he argues that, in many cases, deals are bringing in “American dollars [that] are going to fuel a UK ecosystem”.
Business: helps media companies target their audiences more effectively through social media
Founder: Antoine Amann
Business: AI start-up which taps into a user’s finances to learn from their spending habits. It can send reminders when bills are due or alert users if, say, they have spent more on Uber rides this month than last. The app can even alert them if a different bank could offer them a better interest rate on their money.
Location: Southwark, southeast London
Founder: Polish-born Aleksandra Wozniak, 30.
Investment: has raised £600,000 from angel investors
News: “For the first time, small teams like ours can build this type of complexity without 50 engineers and lots of money,” said Wozniak.
ULTIMATE PRODUCTS: Auction saleroom taught me how people are ready to part with cash | Laura Onita, The Sunday Times
Business: a wholesaler of crockery, luggage, kitchen gadgets and fireplaces. Sells brands such as Russell Hobbs, Salter and Beldray to some 300 retailers, including Tesco, Argos and Robert Dyas, in 38 countries. It has an office and showroom in China and plans to expand its foothold in America in 2017. Controlling the design and manufacturing of its own labels allows Ultimate to stay ahead of the competition. His bestsellers are blenders, spiralisers and “anything to do with [The Great British] Bake Off”.
Location: Chadderton, a former textile town northeast of Manchester
Founder: Simon Showman, 43. Barry Franks
Financials: reported pre-tax profits of £2.9m on sales of £60.7m for 2015. Revenues of £80m are projected for this year.
Investment: The business was previously backed by private equity firm LDC, which had a 46% stake. He and Franks bought it back in 2014 for an undisclosed amount. Showman is the largest shareholder. Is weighing up a sale or float next year and the City adviser, Shore Capital, was appointed in March to help.
1. Ultimate earned a place on The Sunday Times International Track 200 in 2011, the league table of private companies with the fastest-growing international sales. However, Britain remains its biggest market.
2. In 2009, he and Franks launched a graduate scheme, which accounts for 70% of the workforce today.
3. Since 2009 he has rescued a string of homeware brands from administration and plans to acquire more.
PEPA & CO: Prince George helps childrenswear label romp to success | Lucy Tobin, Evening Standard. November 7.
Business: childrenswear label
Launched: October 2013
Location: showroom off the King’s Road in Chelsea
Founder: Pepa Gonzalez, 34.
Staff: “One part-time worker, plus social media and PR support”
Financials: Turnover £204,000 last year; forecast to hit £573,000 for next 12 months
1.“Initially, I picked Spanish brands that could not be found on the High Street in London but then I launched my own label, Pepa & Co. These styles flew off the rails at the numerous fairs I did in the early days. So I started designing more of my own label, which is still manufactured in Spain.”
2. One of her own designs catapulted Pepa & Co into the public eye: Prince George was wearing the brand’s cotton whale sweater and shorts for photos to celebrate his third birthday. Later, Princess Charlotte wore one of Gonzalez’s dresses to a children’s party on the royal visit to Canada. Gonzalez was sitting in a small bar in Sicily for a friend’s wedding when she found she’d been tagged in a photo of the prince on Twitter by Hello! magazine.
3. From this autumn, Pepa & Co is moving beyond its own website and showroom to be stocked in Harvey Nichols’ new online children’s department.
4. “I’ve constantly reinvested revenues, and still own 100% of the business, but I’m now looking for investment and a partner with experience in online retail to help Pepa & Co to grow. I want to be like Zara Woman was 30 years ago. It filled that gap between very cheap and very expensive clothes…
COINVESTOR: IG Group boss joins fintech startup board | Lynsey Barber, City A.M. November 7
DZ profile: Coinvestor Limited
Business: alternative investment platform which lets investors put their cash into assets usually reserved for institutional investors. The startup, which allows private investors to put money into the same investment deals alongside fund managers, will seek to grow further, adding new products and investments. CoInvestor initially launched with an Enterprise Investment Scheme (EIS) product with Oxford Capital and MMC Ventures.
Investment: has a new round of seed stage funding worth £1.1m.
News: Ian Peacock, head of UK and Ireland at spreadbetter IG Group, the FTSE 250 firm, will join the advisory board.
AZZURRI: Refurbished restaurants power profits rise | Paul McClean, FT. November 7
Business: UK restaurant group that owns Italian chains Ask, Zizzi and Coco di Mama
Staff: chief executive Steve Holmes
Financials: sales in the year to June 26 rose 5 per cent to £233.8m, with like-for-like growth across all three brands. Earnings before interest, tax, depreciation and amortisation rose 6.4 per cent to £35.0m.
Investment: was sold to private equity owners Bridgepoint for £250m in 2014
1. The group said it had invested a record £22.2m on opening and refurbishing restaurants over the past year, in a market which some analysts view as already oversupplied. The company opened four Ask Italian sites and 11 Zizzi sites, taking the total to 112 and 145 respectively. It is also set to launch a pizza restaurant called Radio Alice, later this month.
2. Several casual dining chains have struggled in the past year — shares in The Restaurant Group, owner of Chiquito and Frankie & Bennie’s, have fallen by 50 per cent.
3. “…branded restaurants are growing at the expense of independent restaurants: 36 per cent of millennials now eat out once a week, so eating out is growing, and we find ourselves in a growing market,” Holmes said.