COMPANIES: Improbable to Ve Interactive

Published by Directorzone Markets Ltd on December 19, 2016, 9:00 am in News, Other




News about 9 UK growth companies and/or accelerators + turnover in the GRID marketplace, 11th- 17th December 2016:


Martin-Baker £222.8m | Ve Interactive £40m | Harvey Water Softeners £26.4m | E2v £236.4m  | Artfinder | Zappistore | Prettylittlething £17m | Improbable | Franco Manca £29.25m



MARTIN-BAKER: £40m for ejector seat family | The Sunday Times. December 11
DZ profile: Martin-Baker Aircraft Company Limited
Business: Ejector-seat maker, whose jet-powered berths are fitted in combat aircraft including Lockheed Martin’s F-35 stealth fighter. ...and the Eurofighter Typhoon
Founder: co-founder Sir James Martin. The family is ranked 176th in 2017 The Sunday Times rich list with a fortune of £730m.

Location: near Uxbridge, west London
Staff: The company is run by 74-year-old twin sons John and James Martin.
Financials: made profits of £60.4m in the year to the end of March on sales of £222.8m and has paid its founding family £40m in dividends.

1. The company is being prosecuted over the death of a Red Arrows pilot killed in 2011 when ejecting from an aircraft.

Ejection seat family reaps £32m dividend at Martin-Baker | John Collingridge, The Sunday Times. December 17 2017

2. The family has reaped £32m of dividends  ..dipped from £40m a year earlier. Profits fell 20% to £39.4m while revenues dipped 3% to £216m, which it blamed on “problems. . . shipping certain items”.



VE INTERACTIVE: Unicorn on spending spree | Kiki Loizou, The Sunday Times
DZ profile: Ve Interactive Ltd Now Ve Global Uk Limited
Business: technology company that sells web tools aimed at helping retailers boost online sales. Encourages customers to complete their online purchases and has clients including Etihad Airways and Liverpool FC. Ve, which also offers online advertising services, is said to be valued at more than $1bn, putting it among the small cluster of Britain’s “unicorns”.
Launched: 2010
Location: London
Founder: chief executive, David Brown, 44.
Staff: 850 staff across 34 international offices
Financials: has revenues of about £40m and expects to turn its first profit next year.
1. Is on a £50m acquisition spree, has just paid about £3m for Crave & Lamb, a digital marketing agency and is set to close a further three acquisitions in the next few months. Brown has already bought four businesses since he launched the company.
2. Last year it topped The Sunday Times Tech Track 100 list of the UK’s fastest-growing private technology companies.


Founder leaves as Ve lands cash lifeline | Jamie Nimmo, The Evening Standard. March 6

3. Cash-strapped London start-up VE Interactive has eased fears over its future as major investors forked out to keep the business going after its founder relinquished control. A consortium of investors led by multi-millionaire entrepreneur Doug Barrowman’s venture capital firm ASTON VENTURES made “an immediate cash injection”

4. It comes as chief executive David Brown was replaced by Aston’s boss and former PokerStars director Morten Tonnesen, just days after Ve reportedly failed to pay staff. Chris Akers, the ex-Leeds United chief executive whose AIM-listed investment firm CONCHA has a small stake in Ve, said he backed the move. 

5. The company’s last investment round valued it at $2.7 billion (£2.2 billion), making it a unicorn company — a tech start-up with a $1 billion-plus price tag.
UK tech start-up Ve Interactive looks to survive administration | Madhumita Murgia and Kadhim Shubber, FT. April 25, 2017.
6. ...£1.5bn valuation was calculated after the company had raised about £50m from about 500 wealthy individuals since it was founded in 2009. Ve Interactive’s valuation of £1.5bn was seen as an anomaly compared with the public ad-tech sector, given its revenues were just £33.8m for 2015 and the group was still making losses. ... the sharp drop to £300m last month came with an emergency £3m funding round that rescued Ve Interactive from the brink of collapse. In accounts filed in January, the company said it was still burning more cash than it was bringing in.
7. has almost 1,000 staff and 36 offices

Former tech ‘unicorn’ Ve saved from collapse | Jamie Nimmo, The Evening Standard. April 26, 2017
8. ...which collapsed into administration last night - after failing to raise cash - has been rescued in a management buyout. Ve said today that the new management team including chief executive Morten Tonnesen, brought in by ASTON VENTURES as part of last month’s rescue-funding deal, had bought the firm out. Ve said the move would “safeguard hundreds of jobs”, but hundreds of other job losses are expected.

Death of a unicorn | Oliver Shah, The Sunday Times. May 21, 2017


  • July 2009: David Brown and Steve Clucas set up Ve Interactive to address the problem of shoppers leaving online transactions uncompleted.
  • September 2013: Brown says that he wants to “disrupt” Google’s monopoly and predicts £400m of sales in the following year. Clucas resigns three months later.
  • Throughout 2014: Ve acquires tech start-ups adGENIE, GDM and Qunb.
  • December 2014: Sales come in at £19.7m. Although loss making, Ve mentions “embryonic” expansion in Asia and Italy, Spain and Poland.
  • September 2015: Ve says it is preparing for a potential IPO, but admits 2015’s sales will be “lower than originally forecast”.
  • January 2016: Ve compares itself to Facebook and Twitter and says its enterprise value could hit $30bn.
  • October 2016: Ve tells investors it is talking to Barclays, Goldman Sachs, Morgan Stanley and Haitong.
  • March 2017: Brown stands down as part of a £3m rescue cash injection.
  • Ve goes into administration the next month and is sold for an initial £2m.


Ve was experiencing “bandwidth issues” with its finances. ... it needed up to £6m within days. Some of its directors were prepared to put up their homes as security for the loan. ... alarm bells ringing. Ve had already failed to repay a £1m high-interest loan from the private equity firm, run by Scottish tycoon Doug Barrowman. Aston, Mark Pearson - founder of MYVOUCHERCODES.CO.UK - and an American investor, Andy Astrachan, formed a consortium called TREYEW. Treyew took control at 2pm on Friday, March 3 — two hours before staff were due to walk out over unpaid wages. Treyew’s teams were immediately handed £600,000 of extra payroll costs for separate businesses. The consortium needed to raise at least £20m of further funds to keep Ve trading.  pushed into administration. Aston and Pearson led a buyout for £2m through a new vehicle, ROWCHESTER. Treyew called in the law firm EDWIN COE to investigate:

  • accusations that Ve’s money was used to fund directors’ lifestyles, including the rent on three luxury London flats and a hire purchase agreement for a customised £200,000 Range Rover Overfinch. 
  • claims that Brown used £11.5m of Ve’s money to prop up a network of separate businesses owned by him, his ex-wife and his girlfriend.
  • whether Brown and other people benefited from up to £50m of secondary share sales believed to have been carried out before Ve’s disintegration.
  • Ve did not actually own its US subsidiary; the local management team did.
  • Ve had also amassed £38m of debts and £6m of outstanding interest.

INVESTORS:  Sir John Hegarty, co-founder of advertising giant BBH; Lord Lupton, joint Tory party treasurer and chairman of the bank Greenhill; and Theodore Roosevelt IV, great-grandson of the former US president and a senior Barclays banker. ….500 high-profile people from the arts, business and finance, law, medicine, music and sport. Among the best-known were David Furnish, Sir Elton John’s husband, and Luke Lloyd-Davies, who runs their private office. Siobhan Fahey of Bananarama invested, as did Simon Halliday, the former England rugby player, and Aston Merrygold, who was in the band JLS. There were City figures such as David Lis, former head of equities at Aviva, and bankers from HSBC, Goldman Sachs and Nomura. Together Ve’s backers put in about £55m. They lost almost everything when it collapsed last month.
Ve Interactive, the ex-unicorn tech startup turned phoenix raises £15m and relaunches as Ve Global | Lynsey Barber, City A.M. 13 September 2017

10. Ve Interactive ...has raised £15m from its existing investors who bought it out, understood to include the Scottish property mogul Douglas Barrowman. The fresh cash will go toward hiring staff, which currently numbers around 500, the majority of whom are in the UK, and expansion. It plans to enter China and India and will also focus on the US.
11. ...has now also relaunched itself as VE GLOBAL l to signal the completion of its turnaround and is moving into new offices at Old Street's new White Collar factory 500.



HARVEY WATER SOFTENERS: Mr and Mrs Jones of Acacia Avenue can’t get enough soft water | Laura Onita, The Sunday Times
DZ profile: Harvey Water Softeners Ltd
Business: makes water softeners products and sells them from £700 to £1,800. The devices reduce the concentration of calcium and magnesium ions, which make water “hard”, and help save money. “It makes your dishwasher and kettle last longer, it saves on the cleaning — no more limescale stains — and you use 80% less washing powder.”. In 1988, Bowden developed an under-the-sink water softener. Sales took off and the company moved to its Woking factory. Makes more than 20,000 units a year for homes in hard-water areas, typically southeast England.
Location: Woking, Surrey
Founder: Harvey Bowden
Staff: 187. Son Casey, 36, joined the business in 2004
Financials: Last year, made pre-tax profits of £5.8m on sales of £26.4m.
1. The family own 100% of the business and are considering a share-option scheme for staff.
2. There are plans to expand the company’s manufacturing facilities in the next five years and increase sales on the Continent, the source of 30% of its revenues.


* E2V

Essex tech firm agrees to £620m takeover by Teledyne | Lucy Tobin, Evening Standard. December 12
UK tech group e2v agrees £620m sale to US conglomerate | Lauren Fedor, FT. December 13
DZ profile: e2v technologies (UK) Ltd
Business: UK electronics company which designs, develops and manufactures technology systems and components for a range of sectors including space, automation, healthcare, communications and safety. Makes image sensors, radio frequency generators and semiconductors used in planes and power products for cancer radiotherapy treatment. Also powers broadband in space and provides the technology behind astronomy imaging
Launched: Began in the early 1940s as a part of the Marconi group, manufacturing magnetrons for defence radar systems. First registered as a separate company in Chelmsford, Essex in 1947 changing its name to English Electric Valve Company Ltd.
Location: Chelmsford
Staff: 1,750 people across 9 engineering locations and 6 sales offices in countries across Europe, America and Asia. Chief executive Stephen Blair, who joined in 2014. Neil Johnson, chairman of e2v
Financials: turnover £236.4m for the year ended 31 March 2016, up from £224.9m a year earlier. Adjusted pre-tax profit grew to £40.8m from £39m while reported pre-tax profits rose to £37.8m from £30.1m.
Investment: listed on the London Stock Exchange’s junior Aim market in 2004
News: E2V has agreed to a £620 million takeover from California-based industrial conglomerate Teledyne. Teledyne chief executive Robert Mehrabian. Teledyne, which is listed on the New York Stock Exchange, has a market capitalisation of about $4.5bn. Like e2v, the California-based company makes digital imaging products and software, as well as electronics for the aerospace and defence industries. The acquisition is subject to approval by e2v shareholders and the two companies said they expected the deal to be completed in the first six months of next year.



ARTFINDER: UK art marketplace raises $2.2m | Emma Haslett, City A.M. December 14
DZ profile: Art Discovery Limited
Business: art marketplace with more than 250,000 artworks for sale - the website allows its users to find art at an affordable price
Launched: March 2013
Location: London and Miami
Founder: Swedish entrepreneur, Jonas Almgren
News: said today it has raised $2.2m (£1.7m) - through a new VC investor, Oxford Capital - and William Tunstall-Pedoe, the Cambridge AI guru who founded Evi, which later became Amazon's Alexa. It's going to use the money to accelerate its US growth - including a new office in Miami, Florida, set to open in February 2017 -and add machine learning capabilities to its visual search technology.


ZAPPISTORE: Stephen Phillips explains how he got through his first VC raise | Philip Salter (Director of The Entrepreneurs Network), City A.M. December 14.
DZ profile: Zappistore Limited
Business: online research provider - automated, self-service platform for buying research services. Merging with a technology company and getting funding from WPP strengthened ZappiStore’s ambition to cement itself as a real tech player – albeit one operating within the market research industry.
Launched: 2012
Location: Camden, London.
Founder: Stephen Phillips
Financials: By the end of this year ZappiStore will have doubled revenues and next year he expects to do the same.
Investment: investor, Prime Ventures, from Holland
News: Although they were growing organically and were profitable, he wanted to expand rapidly, so about a year and a half ago he tried to find a corporate finance house to help (find a VC). But the deal took longer than planned. The business plan projected annual growth from £6m to £15m, but this was starting to slip in the second quarter, as besides the distraction from the raise they were rebuilding a lot of the code.


Online fashion outfit Boohoo buys big slice of smaller rival | Clare Hutchison, Evening Standard. December 14 buys controlling stake in PrettyLittleThing for £3.3m | Lauren Fedor and Mehreen Khan, FT. December 15.
DZ profile: 21 Three Clothing Company Limited
Business: web-based fashion brand
Founder: founded by Boohoo co-chief Mahmud Kamani’s sons Adam and Umar. Umar is now chief executive.
Financials: Revenue increased to £17m in the year ending in February - a more than 400 per cent increase on the previous year - and it is expected to see sales growth of 150% this year.
1. Online fashion retailer Boohoo today bought a controlling stake in PrettyLittleThing, a smaller rival run by the son of its founder. Boohoo will pay £3.3 million for a 66% slice of the business, whose recent campaign stars Lionel Richie’s model daughter Sofia, to bolster its presence in the UK and overseas. Boohoo had the option to buy the entire group for £5 million under a March 2014 agreement, but said the 34% stake it didn’t buy would incentivise PrettyLittleThing bosses.
2. Peter Williams, Boohoo chairman. Announced the acquisition as it said it expected revenues to rise by between 38 and 42 per cent this financial year, up from previous guidance of between 30 and 35 per cent. In September it reported revenues of £127m for the six months to August 31, up 40 per cent on the previous year. Shares in Boohoo, which listed on London’s junior Aim market in 2014, jumped more than 8 per cent in morning trade on Wednesday, to 128.19p. Boohoo shares have risen more than 200 per cent in the past 12 months.


IMPROBABLE: partners with Google on virtual worlds | Madhumita Murgia, FT. December 14
DZ profile: Improbable Worlds Limited
Business: secretive UK virtual simulation start-up and software developer, which creates sophisticated virtual worlds for games and other applications.  ....has never disclosed revenues and is still in beta mode, has built a platform called SpatialOS capable of “recreating the real world”, from modelling traffic across entire cities, to simulating telecoms networks and even biological systems. It distributes computing power across thousands of servers, like a giant supercomputer, and enables highly detailed modelling of lifelike situations, such as a marine ecosystem. 
Location: London. 
Founders: founded by two Cambridge university graduates - Herman Narula, 29, chief executive and Rob Whitehead, 26, chief technology officer. Mr Narula, the son of a billionaire construction tycoon in New Delhi, ... In 2012, he made the controversial decision to avoid the family business and go out on his own. After meeting at Cambridge, he and Mr Whitehead set up shop in the Narula family’s 19th century estate in Hertfordshire. ...for almost 18 months ...coding, prototyping with about 20 people
Investment: has raised $20m from well-known Silicon Valley backers ANDREESSEN HOROWITZ. The company had previously raised funds from a group of angel investors including AMADEUS CAPITAL PARTNERS.  March 2015 valued  at about $100m. Alex van Someren of Amadeus Capital. Fred Destin, former partner at Accel and now a seed investor. LOCALGLOBE - Improbable’s earliest institutional investor 
1. Improbable has emerged from “stealth mode”, announcing a deal with Google that will allow game developers to use its technology to create sophisticated virtual worlds. The agreement, which begins early next year, will subsidise access to its technology for game developers and use Google’s cloud services.
2. So far has operated on an invite-only model, where game developers such as Bossa Studios, Spilt Milk Studios and HelloVR can create densely detailed games similar to those pioneered by Second Life’s Linden Lab. They are on a far larger scale: the worlds can be populated by thousands of people simultaneously, who can move seamlessly between areas and congregate in large groups anywhere in the created universe.
3. Although Improbable is currently focused on make-believe worlds, it has already garnered customers who are modelling solutions to real-world problems. These include academics, local governments such as the city of Cambridge, and private companies using it for applications such as training a virtual fleet of self-driving cars in London.

UPDATE: SoftBank injects $500m into UK tech start-up | Madhumita Murgia and Arash Massoudi, FT. May 12, 2017

4. ... is raising $502m from Japan’s SOFTBANK in a deal that will value the business at more than $1bn and mark the largest-ever venture financing round for a private British company.  ....second major UK investment in under a year by SoftBank:lLast July, Cambridge-based chip designer Arm Holdings £24.3bn takeover deal, just weeks after the UK had voted to exit the EU.  Improbable confirmed that SoftBank will own a non-controlling stake in the business, meaning that it holds less than 50 per cent of the company’s equity. All the funds from the latest investment will go towards developing technology including SpatialOS, as well as hiring for the start-up’s London and San Francisco offices.
Improbable moves closer to making virtual worlds a reality | Madhumita Murgia, FT. May 13, 2017
5. ...the company is trying to build a platform that is analogous to Microsoft’s Windows or Apple’s iOS. He says the company’s SpatialOS allows users to build highly detailed virtual worlds that enable super detailed simulation of real world situations. This enables scientists, city planners or companies to better predict how complex, interconnected processes — such as traffic systems in a large city or marine life in an ocean — might behave in real life. The best way to figure out how a massive, knotty economy will react to a disruption, for instance, is to build an exact virtual version and then introduce that change. SpatialOS is still in beta mode and the company has never disclosed revenues publicly. However, its technology has been tested by a host of game developers and academics, ranging from civil engineers to epidemiologists. The company has also signed up paying customers ranging from local governments to security professionals, academics and businesses. One client is using it to train a virtual fleet of self-driving cars in London.

For instance, the company recently created a complete simulation of the city of Cambridge, including its sewerage and mobile networks, power grids and road traffic. It plans to expand the size of these types of simulations to allow clients to spot security vulnerabilities or solve traffic and communication issues at scale.

SoftBank-backed Improbable makes a big bet on video games | Tim Bradshaw, FT. March 29, 2019

6. …while Improbable still holds “metaverse” — a virtual twin of the real world - ambitions in the longer term, for the foreseeable future the company is focusing on video games. ...on creating a “one-stop shop multiplayer solution for developers”, including managing cloud computing requirements as well as SpatialOS itself, that will vastly reduce the upfront costs of creating an online multiplayer game akin to runaway hit Fortnite. partners such as Fortnite developer EPIC GAMES, which is creating a new $25m fund with Improbable to finance new games studios, and CRYTEK, which is developing a new “AAA” title on SpatialOS. This month, Improbable revealed that it also plans to develop its own games. New internal studios have been set up in London and Edmonton, Canada. 

7. SpatialOS’ protracted development process. ... unsettling for developers ....very public spat over licensing terms at the beginning of 2019 with UNITY, the game engine developer that many creators were using in tandem with SpatialOS. All that has left some early SpatialOS adopters wondering if Improbable can ever deliver on its ambitious vision for persistent virtual worlds that appear really “alive” to gamers.

8. Last year, Improbable raised another $100m from Chinese internet group NETEASE, which is one of the world’s largest developers of online multiplayer games, at a valuation above $2bn.

9. ...revenues for the year ending in May 2018 fell to just £579,859, from £7.8m in the previous year. At the same time, its annual losses increased tenfold to £50.4m

10. ...has done work with a range of government clients in the US and UK, which it is largely unable to discuss. A $5.8m US army contract made up more than half of its 2017 revenues. But the majority of Improbable’s customers so far have been smaller, independent games developers, including BOSSA STUDIOS, creator of Worlds Adrift, and KLANG, which is in the early testing stages of its multiplayer simulation Seed.                  


FRANCO MANCA: pizza prices won't be rising because of Brexit | Joanna Bourke, Evening Standard. December 16
DZ profile: Franco Manca 2 (UK) Ltd
Business: Pizza restaurant chain - currently 43 sites – well-known for its small range of good value pizzas and sourdough base cooked in a wood burning brick oven.
Launched: 2008
Location: London
Founder: Giuseppe Mascoli, from Naples, southern Italy,
Staff: Chairman David Page
Financials: Sales rose to £29.25m for the year to March 27, up from £8.3m for the previous year, while pre-tax profit reached £423,000. Revenue rose 43% to £19.9 million in the six months to September 25 from a year earlier.
Investment: Mascoli sold his business last year for £27.3m and took a 5pc stake in the Aim-listed FULHAM SHORE, run by former Pizza Express chief executive David Page. Fulham Shore is also behind The Real Greek brand.
News: Page has said that the firm’s plans to expand in London — with six more restaurants expected in the year to March 2018 — has kept partners, including olive oil makers in Crete, “relatively happy”. “Our suppliers are being understanding because …As long as we keep expanding and they see order sizes increase, we are finding that they are prepared to take a hit on profit margins rather than hike up prices.” It said it is also in talks with High Street retailers to open up within their department stores where there is excess space.