Off to a good start
The availability of capital is a perennial issue for technology
start-ups, but for Finance Wales, early stage growth investment is
a key part of its investment strategy. Securing a well-structured
investment package from the outset can smooth the growth path and
contribute to long-term success.
Investment and more
“In the last financial year, we made 30 new investments in
IP-rich, technology based businesses, 14 of which were
co-investments and this year is equally busy,” Smith continues.
“We’re seeing some really strong business plans, impressive
technologies as well as more co-investment opportunities.”
Finance Wales’ £150 million fund is an attractive proposition and
last year, 5 technology-based businesses relocated to Wales to take
advantage of investment from Finance Wales. “We can invest or
co-invest over a number of rounds and growth stages and that’s
really attractive for many early-stage businesses,” Smith
explains. “Wales also offers generous R&D grants, incubators
specifically for high-tech businesses and access to university
centres of research excellence.”
Ambition, potential - pass go
Finance Wales can invest up to £1 million in innovative
businesses developing and commercialising novel IP-based
technologies targeted at growing markets. It can also follow its
investment as the business grows.
Finance Wales has invested £365,000 over two rounds in Ocelus, a
medical devices company developing a needle-free way of
administering drugs. Ocelus used this investment to develop its
proof-of-concept and pre-production prototype. It also received
Welsh Assembly Government R&D grants of £197,000.
Invest to make a difference
“We’re focussed on sectors such as advanced engineering, clean
technologies, medical devices, future internet-based technologies
and ‘plastic’ electronics,” Smith explains. “Securing the right
investment package is crucial, so we often co-invest with a number
of sector-specific institutional investors.” Portfolio company, Q
Chip is commercialising its drug-delivery technology originally
developed at Cardiff University. Finance Wales recently concluded a
£2 million co-investment round in partnership with Curzon Park
Capitol and existing shareholders.
Clean tech G-volution
G-volution’s patented Optimiser multi-fuel system reduces fuel
costs by an estimated 10 to 15 per cent and carbon emissions by
around 8 per cent. Using a £400,000 equity investment from Finance
Wales, private investors and company founders, G-volution will
expand and develop the Optimiser to target other commercial vehicle
new sector applications. It aims to capture 10 per cent of the
heavy goods vehicle market by 2015.
The current economic conditions have reduced the capital available generally, but for early-stage, technology-based businesses it's gone from bad to worse as most don't fit the risk profile of the banks or institutional investors. And I don't really see this situation improving in the near future.
Steve SmithDirector, Technology Venture Investments