Thursday February 14th 2019Ends
Thursday February 14th 2019
Cellnovo | Metail | Trint | Footasylum £110.4m | Aerfin $82m | Dearman | Drayson Technologies | BTL | Nanoco £0.47m | Kromek £9m | Xeros £2.4m
News about 11 UK growth companies and/or accelerators + turnover in the GRID marketplace 9-15th July 2017:
CELLNOVO: Cash injection | Sabah Meddings, The Sunday Times. July 9
DZ profile: Cellnovo Limited
Business: Makes and markets a wearable insulin pump for people with diabetes
Location: Bridgend, Wales
Founder: Julian Shapley, 41, chief science officer, who established Cellnovo after watching family members with diabetes grapple with the condition. He studied biochemistry and micro-engineering at Cardiff University before working at the international space school in Texas.
Investment: has raised €17.5m (£15m) of fresh investment. Cellnovo’s latest capital injection, representing a 26.4% stake, was raised through a share sale. The company is listed in Paris. …floated in 2015 with a value of €113.6m. Today it is worth €54.1m.
News: Cellnovo will use the cash to fuel the development of an artificial pancreas and boost continental expansion. The artificial pancreas is being developed to monitor blood glucose levels automatically and inject insulin into patients’ bodies when it is needed.
METAIL: Fitting room boost | Laura Onita, The Sunday Times
DZ profile: Metail Limited
Business: fashion technology start-up which allows shoppers to create 3D models of themselves and try on clothes virtually. Metail’s technology is incorporated into retailers’ websites in eight countries and 7.7m customers have created a “MeModel” so far. The software uses bust, waist and hip measurements to create a virtual representation of a shopper’s body in 10 seconds. Retailers pay Metail an upfront fee as well as a share of the sales they make via the technology.
Location: has offices in London and Cambridge
Founder: Tom Adeyoola, 40, a Cambridge graduate, - previously an executive at the gambling tech company Inspired Gaming - after he saw his wife return disillusioned from shopping trips.
Financials: has yet to make a profit
Investment: has landed a £10m investment from a Hong Kong garment powerhouse ….TAL APPAREL, one of Metail’s existing investors. The Far East company makes clothing for retailers including Charles Tyrwhitt, J Crew and Burberry. Metail has now raised £22.5m of outside investment. Adeyoola said he no longer had a majority shareholding in the company.
News: Adeyoola plans to expand into the menswear market.
TRINT: Li Ka-shing backs start-up that has a way with words | Danny Fortson, The Sunday Times
DZ profile: Trint Limited
Business: British start-up that uses artificial intelligence to transcribe audio files. Trint charges as little as $12 for a searchable transcription that is delivered in minutes. Early customers include ESPN, VICE NEWS and NATIONAL PUBLIC RADIO in America, as well as academics and law firms. The tool is not 100% accurate but Kofman said it is better than professional transcription services that can charge up to $100 for an hour of tape and take a day to turn around.
Founder: Toronto-born Jeff Kofman, an award-winning journalist who said the idea came to him after spending “thousands of hours of my life transcribing interviews”. At a tech conference he met a developer called Laurian Gridinoc who said it might be possible to create a system that automatically transcribed files. Kofman left America’s ABC News, where he was London correspondent, in late 2014 to work on the idea full-time.
Investment: has raised $3.1m (£2.4m) from a raft of top investors including Hong Kong billionaire Li Ka-shing, owner of the mobile phone operator Three.
1. He plans to use the cash infusion from Li’s venture capital firm Horizons Ventures to hire more staff and improve his product.
2. More than 80% of the content on the internet is audio or video, none of which is searchable. The goal, said Kofman, is to make all of it accessible. He added: “It is taking dark data and shedding light on it.”
FOOTASYLUM: JD Sports founders in £40m sprint | Daniel Dunkley, The Sunday Times
DZ profile: Footasylum Limited
Business: sells premium trainers and sportswear. …sells most of its shoes to customers aged between 16 and 25. Has 61 stores, selling well-known brands such as Adidas, Nike and Converse, as well as its own labels including Kings Will Dream and Glorious Gangsta.
Founders: JD Sports founders John Wardle, 72, and David Makin, 53, in 2009, four years after they sold out of JD Sports. The company started out as a single store in Wilmslow, Cheshire, in 2005. Makin opened the first Footasylum store in Cheshire in 2005 before he was joined by John Wardle as chief executive in 2008.
Staff: which employs more than 820 people
Financials: According to its last set of accounts, Footasylum made a gross profit of £48.5m in the year to February 2016, up from £35.5m the year before. Turnover rose to £110.4m for the year.
Investment: the entrepreneurs own 10% of the store chain. Makin’s three children own 90% of the business, which is run by Clare Nesbitt, Makin’s daughter.
1. The families of JD Sports tycoons are set to reap £40m from the sale of a stake in their latest high street venture.The Wardles and Makins have hired the investment bank GCA ALTIUM to sell a chunk of Footasylum. The shareholders are keen to sell 40% of the company, which has been given a price tag of more than £100m.
2. Wardle and Makin engaged in a fierce battle with Sports Direct tycoon Mike Ashley and JJB Sports founder Dave Whelan for high street supremacy in the early 2000s. In the early days of Sports Direct, Ashley called for an Office of Fair Trading investigation into his northern rivals, over the alleged price fixing of England and Manchester United replica shirts.
3. The latest payday comes after Wardle and Makin invested much of their JD Sports fortune into Manchester City when it was struggling in the early 2000s. The duo are credited with helping to keep the football club afloat, before its sale to former Thai prime minister Thaksin Shinawatra in 2007.
Footasylum kicks off in style as UK’s youngest boss makes market debut | Graeme Evans, The Evening Standard. November 3, 2017
4. floated on AIM on Thursday ... made a stunning stock market debut. Shares, trading under the ticker FOOT, surged 22% to 205p, giving Footasylum a valuation of £214 million. Almost two-thirds of the business is still in the hands of founder David Makin and his family.
5. Current chief executive Clare Nesbitt, who is 30 and Makin’s daughter, becomes Britain’s youngest boss of a listed company as a result of today’s market debut.
Footasylum shares plunge as retailer warns on current trading | Alys Key , City A.M. Tuesday 19 June 2018
6. ....share price was down 43.3 per cent at 95p in early trading as the company announced full year results for the year to 24 February: Revenue was up 33 per cent at £194.8m, with online sales up 41 per cent. But profit before tax was just £1.9m compared to £8.1m last year, due to the costs of the company's entry into the Alternative Investments Market (AIM). Excluding exceptional costs, adjusted profit before tax rose four per cent to £8.4m. Chief executive Clare Nesbitt said that trading since the beginning of the new financial year had "undoubtedly" been impacted by the tough environment on the high street. She added that this, combined with Footasylum's ambitious plans for investment, meant underlying earnings were likely to show similarly modest growth in the current year.
AERFIN: We started fixing aero engines and it just took off | Laura Onita, The Sunday Times
DZ profile: Aerfin Limited
Business: the company helps airlines such as Lufthansa and Thomson to fit recycled aero engines and takes used ones off their hands. Engines in aircraft made by Airbus and Boeing typically have a 20-year lifespan before parts have to be replaced.
Location: Caerphilly, south Wales
Founder: Bob James, now 53, had just turned 30 and had a young family to care for when — calamity — the aircraft engineer was made redundant. In 1995, he set up his first company, TES Aviation, with former colleague Ashley Cooper. In 2007, he sold his stake in the aircraft maintenance contractor and then quit two years later to launch AerFin with £2m of the proceeds. He has since grown AerFin into a multimillion-pound company. In its largest deal, AerFin this year bought a fleet of 15 aircraft (Embraer E170-LR regional jets) from Saudi Arabian Airlines. More than half of them will be refurbished and find a new life in Asia or Africa, said James.
Financials: made pre-tax profits of $4.3m (£3.3m) on sales of $82m last year.
Investment: In 2014, the founder sold an 80% stake to American fund manager CARVAL to accelerate growth. “CarVal will seek an exit at some point,” he said. He owns 12% of the business and has no urge to increase that.
1. The CarVal deal valued the company at £13.6m, according to accounts at Companies House. The cash helped AerFin to spend more than £65m on old planes, engines and parts worldwide, selling or leasing them to airlines after refurbishment. “The industry is renowned for consuming a lot of cash,” he said, and his venture needed a backer “with big pockets”. Even a small used engine can cost as much as $2m.
2. Last year international sales soared to £52.8m, placing it first in the Sunday Times International Track 200 list of companies with the fastest-growing international sales.
3. James plans to grow AerFin’s leasing arm and expand in Asia. He opened a warehouse in Singapore last year.
DEARMAN: War photographer turned king of cool who’s tackling London’s pollution crisis | Michael Bow, The Evening Standard. July 10
DZ profile: Dearman Ltd.
Business: tech start-up manufacturing company making futuristic engine systems which run on liquefied air which comes in the form of liquefied nitrogen (LiN). At the heart of the system is an engine, known simply at the Dearman, which …works like a high-pressured steam engine but powered by LiN …slightly bigger than a fold-up bicycle but with the look of an old film projector with the casing removed. It could probably fit in a large suitcase. The liquid is kept at 196 degrees below freezing and warming it causes it to expand, propelling the engine’s pistons and throwing off cool waves. Dearman makes an entire transport refrigeration unit based on the engine, which bolts onto delivery vans and trucks.
Location: research and manufacturing centre at Croydon
Founder: Toby Peters, 52, ex-Fleet Street journalist and war photographer in conflict zones. After a career in energy research followed….became a visiting professor of power and cold economy at the University of Birmingham. Toby Peters and Peter Dearman (inventor of the engine) met in 2004 and co-founded energy start-up HIGH VIEW. In 2011, the shareholders of High View and agreed to spin the engine idea into a separate business. …that became the Dearman Engine Company. The firm originally comprised three people based in Covent Garden. It used Imperial College’s facilities.
Investment: backed by venture capital firm PARK VALE
1. Around 70% of the food we eat has to be chilled, and everything from data centres to vaccines need a cold environment. But there’s a problem — those icy blasts of cold rely on diesel gas engines, which pollute the air.
2. Sainsbury’s started piloting the gear in London last year, delivering chilled goods to stores from Putney to Stratford. The retailer liked it so much that it’s taking another one this year.
3. Dearman will make about 20 of the systems this year and plans to scale up.
4. The firm is also making a push into foreign markets — with trials at a data centre in Malaysia — and it plans to take the UK technology to India.
5. new chief executive last month
DRAYSON TECHNOLOGIES: UK digital health start-up to commercialise products with NHS | Sarah Neville, FT. July 9.
DZ profile: Drayson Technologies (Europe) Limited
Business: UK digital health start-up
Location: London W10
Founder: Lord Paul Drayson, a former Labour government science minister. Almost 25 years ago, Lord Drayson undertook his first spinout from Oxford university, when he founded POWDERJECT to commercialise a needle-less vaccine. The company went public in 1997 and, although the technology never found a mass market, PowderJect was eventually sold to US-based Chiron Corporation in 2003 for more than £500m. “I think we were the first biotech to make a profit,” he said.
Investment: To support the SRA, Drayson Technologies has raised a £10m Series C investment led by Neil Woodford’s fund management business WOODFORD INVESTMENT MANAGEMENT. Drayson Technologies has raised more than £41m to date.
1. licensing deal in which the National Health Service will receive a share of royalties from successfully commercialised inventions. The University of Oxford and Oxford University Hospitals NHS Foundation Trust, will receive an aggregate £5m of equity in Drayson Technologies as part of a five-year strategic research agreement (SRA). The university and the trust have worked together to develop products including software applications and devices to monitor patients, or to assist them in managing chronic diseases. These have been clinically validated, demonstrating that they are cost effective and provide real benefit to the NHS. The deal has been structured to ensure that if products are commercially successful the NHS receives a financial return.
2. This gives the company an option to license intellectual property developed by Professor Lionel Tarassenko, head of the university’s department of engineering science. His research group has developed digital health products in partnership with the NHS Trust. Professor Tarassenko said his team’s work on wearables, smart devices and machine learning algorithms had enabled the delivery of real-time, personalised healthcare to patients.
BTL: The Blockchain Brothers - Guy and Hugh Halford-Thompson on running the world's first public blockchain firm | Elliott Haworth, City A.M. July 10.
DZ profile: BTL Group Ltd
Business: BTL has created an enterprise-focused blockchain platform, Interbit, which enables companies to build business applications faster, with greater efficiency, heavily reduced maintenance, and fewer security vulnerabilities. Industry heavyweights in the finance and energy space are already using the platform to explore the opportunities of private blockchains.
Location: One Canada Square, Canary Wharf, alongside offices in Vancouver and Calgary
Founders: brothers Guy and Hugh Halford-Thompson, respectively chief executive and chief innovation officer …who work some 5,000 miles away from one another, with Hugh in London, while Guy stays in Canada. …the pair’s other company, QUICKBITCOIN, was responsible for the UK’s first Bitcoin ATM in Shoreditch
Investment: publicly traded company on the Toronto Stock Venture Exchange
1. Like many fintech firms, it all started on Old Street. The move to the Wharf came via an invitation to join LEVEL 39, the Canary Wharf Group’s exclusive incubator for fintech firms. The move was, says Guy, “an opportunity to become close to the banks, the finance space. We’re doing a lot of work in energy as well, and a lot of the energy companies we’re working with have big offices here.”
2. BLOCKCHAIN uses a decentralised public ledger on a network of replicated databases synchronised via the internet – meaning if one node in the network fails, the data will not be lost. The ledger is visible to anyone within the network, meaning the records it keeps are easily verifiable. This cuts out the need for a central administrator, and therefore any chance of error or fraud, while drastically reducing labour costs. …Guy says that due to its roots in bitcoin, “a lot of people see blockchain associated with just finance and payments, but that’s really just scratching the surface. That’s kind of like saying the internet is only really good for email.”
3. As Open Banking and the update to the Payment Service Directive (PSD2) approaches, an increasing number of firms are being forced to open up their data. Asides from regulation, by creating secure channels between institutions using Interbit – cutting out the need for an intermediary – it makes the process of say, a trade, far quicker and easier, not to mention more secure. “Every time two companies trade, it’s a lot more efficient if they can access some bits of each other’s data. Right now they do the trade and then there’s a whole back-office process before they’re synced up. But if they can share some element of that data in real time, in a controlled environment, it’s a lot more efficient.”
4. Interbit is still in the test stages, having completed trials with energy behemoths – BP and ENI, for example. The brothers tell me that some of the most exciting problems they’re solving are in fact some that might appear to be the most boring. Hugh gives the example of the confirmations process of a trade.
5. BTL was listed on the Toronto Venture Exchange (TSX) in 2015, which is not dissimilar to the UK’s Aim market. “…being a listed company has allowed us to grow at the pace of the industry. It’s allowed us to raise capital as and when we need it. That capital has come at significantly less cost than it would if we’d taken the VC route – the VC route is very aggressive. Also, as a side effect of that, it’s allowed us to provide a platform of legitimacy – when we go and work with a company like BP or Visa, being publicly listed makes it a lot easier for them to work with us.”
6. The way BTL has been running trials is what Guy calls a “thin wedge approach”. “We picked confirmation because we knew it was an area we could demonstrate value quite quickly, validate the tech, validate the business cases, and allow the companies to demonstrate internally the value of Interbit. Once we’ve done that, we can then start to bring additional parts of that process onto the same platform over time. It’s innovation rather than trying to disrupt and change everything at once.” The brothers are transitioning into a private beta, not yet open to the public, with the goal of taking it to a late beta or version 1.0 by the end of the year.
Manufacturing boost in quantum dots, radiation detection and waterless washing machines | Andy Bounds and Chris Tighe, FT. July 14.
The North and Midlands of England were built by industrialists creating new products to drive the industrial revolution. The regions still have plenty of innovative companies with breakthrough technologies but they now face a stiffer task to get them to market, often depending on bigger players elsewhere. Some are finally rewarding investors’ patience.
DZ profile: Nanoco Group Plc
Business: makes quantum dots - nano-sized particles that emit light when stimulated by an electric current and create clearer colours in TVs, smartphones and lighting.
Staff: Mike Edelman, chief executive
Financials: Edison estimates Nanoco will become profitable in the year to July 2018, with its shares forecast then to be trading at twice today’s value. To July 2016: £0.47m revenues and £12.6m Pre-Tax loss.
Investment: Listing/Admission to trading May 2015, London Stock Exchange Main Market
News: has just achieved its first commercial sale to WAH HONG INDUSTRIAL CORPORATION, one of the world’s largest manufacturers of optical films and sheets for the display industry. The sale came via Dow Chemical but still vindicates Nanoco’s decision to end an exclusivity agreement with the US company last year after a Korean manufacturing factory took longer than expected to complete.
DZ profile: Kromek Group Plc
Business: serves the medical, security screening and nuclear markets and develops high performance radiation detection products based on cadmium zinc telluride
Location: Headquartered in County Durham with US operations too
Financials: has yet to make a profit. Revenues of £9m in the year to April 30, on which it made £3.8m pre-tax loss, are expected to increase to £12.5m this year.
Investment: floated on Aim in October 2013. In February, investors backed a £21m fundraising.
1. received a boost from news that GENERAL ELECTRIC has introduced its own range of CZT-based SPECT (single photon emission computed tomography) scanners. Although not a supplier to the US group, Kromek now has an opportunity to supply GE’s competitors with products using CZT, its core technology since it began life in 2003 in DURHAM UNIVERSITY’s physics department.
2. As well as strong medical imaging sales and prospects, Kromek has won contracts worth more than $12m from the US DEPARTMENT OF DEFENSE for its portable “dirty bomb” radiation detectors. It has also clinched its first long-term contract in the security screening market. In total, it has signed contracts worth more than $40m over the past 24 months.
Niche manufacturers benefit from global outlook | Michael Pooler, FT. July 20, 2018
3. at the Nato summit last week, Belgian police officers wore small devices resembling smartphones during security sweeps: Kromek wireless detectors capable of producing a map of radiation levels, in order to uncover threats such as radiological “dirty bombs”. Kromek also supplies its DS3 personal radiation detectors that were on show in Brussels to Darpa, an agency of the US Department of Defence.
4. recently broke even for the first time at an underlying leve, with EBITDA of £500,000 in the year ended April 30. Revenue increased almost one-third to £11.8m. Kromek has a market value of £73m.
DZ profile: Xeros Technology Group Plc
Business: maker of the near-waterless washing machine. Has patented polymer beads that draw dirt and other contaminants from materials. To demonstrate that the technology, which was developed at LEEDS UNIVERSITY, worked in commercial laundries, Xeros had to spend heavily to build the machines and lease them to hotels and other laundries. Now other manufacturers are putting them into production, leaving Xeros free to make beads and recycle them, as more of a service business, or “rent collector” as its broker Jefferies terms it.
Financials: With total losses over the past five years at more than £43m, Jefferies estimates that another £30m-£50m is needed until the company is cash positive by 2022. Revenues to Dec 2016: £2.4m.
Investment: The group floated on Aim in March 2014
News: has finally cracked its second big target market: leather processing. In July it bought a small US workwear cleaner. Tanneries use a lot of water and chemicals, creating an effluent that is expensive to clean. Earlier, this month Xeros signed a 10-year deal with Wollsdorf of Austria, which provides leather for luxury carmakers, among others. With five other tanneries in trials, Jefferies estimates this market could soon be worth £4m-£5m a year.