New Horizons UK venture capital and private equity: creating public value
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//// February 2021 New Horizons UK venture capital and private equity: creating public value
New
Horizons //// 2
About this report
This report has been produced by the British Private
Equity and Venture Capital Association to highlight the
ways in which the industry contributes public value
to the United Kingdom and how in 2021 it can help
address a range of policy challenges and opportunities.
The industry has a significant presence in the UK developed over the
past 30 years. Private equity and venture capital provide UK companies
with the finance and know-how to deliver sustainable business
growth. Active ownership over the medium to long term delivers
economic and social value to those involved in the businesses (from
employees, management and owners on the one hand to customers
and suppliers on the other) and a wide group of stakeholders (the
local communities in which they are based and policymakers).
Both parts of the industry are focused on delivering sustainable
growth for the companies in which they invest: venture capital
firms typically support early stage and younger companies, holding
minority stakes in the businesses, while private equity firms typically
acquire controlling stakes in more established businesses.
Part one of the report highlights the key policy themes and
how the industry is aligned to support policymakers’ objectives;
part two provides further background and detail on how the
industry operates; and part three offers further insights into the
contributions made by private equity and venture capital.
bvca.co.uk //// @bvca
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Private equity and venture capital at a glance
Employment Footprint Focus Sector expertise
972,000 4,290 90% +
people are employed in the UK companies are currently backed of industry backing was directed Technology and healthcare
by companies backed by private by private equity and venture at small and medium sized have been among the leading
equity and venture capital capital in all nations and regions businesses in 2019 sectors for recent investment
of the UK by the industry
Investment scale Global funding Global hub Returns
£43 billion £48 billion 14.2%
has been invested in 3,230 total funds raised in 2019. The Outside the USA, the UK hosts returns have been generated for
companies in the past 5 years number of funds raising new the world’s most significant private pension funds and other investors
capital was 118 equity and venture capital hub, by the UK industry over the past
reinforcing the UK’s financial 10 years, out-performing other
services leadership asset classes
These statistics are taken from BVCA RIA data from 2015-2019 – this reflects the totals of BVCA members.
bvca.co.uk //// @bvca
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Horizons //// 4
Contents
Creating public value
//// 5
Part one
Contributing to UK public policy priorities
//// 6-12
Part two
A guide to the private equity and
venture capital industry
//// 13-15
Part three
Case studies: creating public value
//// 16-58
Contacts
//// 59
bvca.co.uk //// @bvca
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Creating public value
1. COVID – delivering economic people employed in businesses in the competitiveness of the UK’s investment
recovery as the health UK backed by our members, who in climate which will in turn ensure the
emergency recedes recent years have invested in small and ability of private equity and venture
medium sized businesses in all parts capital in the UK to support the
2. Cohesion – addressing of the UK and have continued to do so public policy objectives which are
disparities in economic and throughout the current COVID crisis. the priorities for 2021 and beyond.
social opportunities in the
Looking ahead the industry is well
nations and regions of the UK positioned to support the UK in a
3. Competitiveness – developing growth-led recovery. Substantial
the UK economy’s position in funding is available to support the
The past year has been unlike
the world after Brexit economic recovery through immediate
anything we have experienced
investment and ongoing active portfolio
before. In a rapidly changing world, 4. Climate and sustainability – management of those businesses.
the COVID pandemic has joined setting course for Net Zero Opportunities are being explored Michael Moore
climate change, technological in the context of wider throughout the country, developing new Director General, BVCA
disruption and social change in environmental, social and tech sectors and growing established
fundamentally challenging and governance objectives parts of the economy alike. The industry February 2021
altering the way we live. The has embraced the need to invest
resulting health emergency has This agenda is ambitious, but has and act responsibly, recognising the
cost over two million lives and support across the political spectrum pressing timescales to adapt the
caused unprecedented economic and elsewhere. Everyone has a part economy and society to changing
damage in all parts of the world. to play, not least in the business environmental and other realities.
community. Responsible businesses To deliver this public value, private equity
For policymakers in the United Kingdom, recognise that in addition to and venture capital attract significant
as elsewhere, the demands have been generating economic value for the flows of international capital into the
acute and the responses on a scale rarely country they must also produce social UK, along with talented individuals from
seen in peacetime. This reality will continue value, bringing the two elements across the globe. This underpins the UK’s
for some time. But alongside the ongoing together to create public value. position as the world’s largest hub of
management of the COVID crisis, attention in capital and expertise for venture capital
The private equity and venture capital
2021 is also focused on other critical policy and private equity outside the USA.
industry certainly understands these
priorities. In four areas of policy in particular We therefore welcome commitments
imperatives. There are nearly a million
there is clear intent to make progress: to maintain the attractiveness and
bvca.co.uk //// @bvca
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Horizons //// 6
Part one
UK public policy
Challenges and opportunities:
how venture capital and private
equity can and will contribute to
UK public policy priorities
New
Horizons //// 7
Four public policy priorities
1 2
COVID Competitiveness
Supporting the economic Driving technology, innovation,
recovery growth and productivity
3 4
Cohesion Climate
Providing opportunities Delivering ESG objectives and
across the UK working towards Net Zero
Part one bvca.co.uk //// @bvca
New
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Supporting the COVID recovery Creating public value
$14.8bn $15.0bn
COVID-19 continues to have an Conditions may remain challenging in the Venture capital investment
unparalleled impact on people’s lives immediate future, but the industry is in the UK
and jobs. The responses from government continuing to invest, which will deliver $9.8bn
$9.2bn
Ecosystem update – end of year 2020
have been on a scale never seen before economic growth and job creation to
Technation / Dealroom – UK tech
and have been essential to support the underpin the recovery. After a pause
$5.9bn
economy through the crisis. For its part, in the spring of 2020, investment activity $5.4bn
the private equity and venture capital has increased again, providing immediate
industry is invested in all significant benefits to the economy – Q3 and Q4
sectors of the economy and in all parts both registered 200+ deals and around
of the UK. Throughout this period, £37.4bn of aggregate deal value1.
BVCA members have worked closely 2015 2016 2017 2018 2019 2020
Given the right economic conditions,
with the businesses in which they have
and with an attractive investment climate
invested, providing additional finance,
maintained, the industry will be able to Total UK private equity quarterly
strategic guidance and operational
support significant further investment into deal volume and value (£bn)
expertise. This intense engagement is
new opportunities, utilising the record 334
a key part of the business model of 309
amounts of capital raised in 2019. As it
the industry.
has done before it will invest across all 298
284 283 236
stages of a company’s development – from
Private Equity Review: FY 2020 (page10)
207
start-ups in deeptech, fintech, medtech
Stabilisation to recovery and life sciences supported by venture
While great uncertainty remains, the capital, to growth capital and the buyout
KPMG UK Mid-market
137
optimism generated by the rollout of the of more mature businesses, which is the
COVID vaccines means that during 2021 focus of private equity.
the country can look forward to a shift £19.8 £22.2 £27.6 £38.2 £34.5 £15.3 £17.9 19.5
in the economy, from stabilisation to
recovery. Private equity and venture capital Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
will support both of these phases. While 2019 2020
Tech Nation – 2020 in review
the industry’s initial focus during the crisis
has been to support its existing portfolio
of investments, capital has continued to
be raised by BVCA members to invest in
the development of new opportunities. 1
https://assets.kpmg/content/dam/kpmg/uk/pdf/2021/01/
uk-mid-market-pe-review.pdf (page 10 - overall UK PE activity)
+50% Job vacancies in tech have
climbed 50% since July 2020
Part one bvca.co.uk //// @bvca
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Developing UK competitiveness Creating public value
Technology and innovation, Sustained productivity increases involve the Productivity change under 4.1%
3.7%
growth and productivity adoption of new technology and EY’s report private equity ownership
EY Annual report on the performance
shows a 3.3% annual increase, over 12 2.9%
Academic research has demonstrated years, in the level of capital expenditure on 2.2% 2.1%
of portfolio companies XIII
1.9%
numerous times that private equity backed tangible assets by these businesses. Private
companies are more productive than other equity is actively looking for investments
businesses in their economies. They are in technology-enabled companies across
also, on average, more innovative, filing all sectors and this will continue to drive
more patents2. productivity in the future. 2017 2018 2019
This is reinforced by BVCA-commissioned Many new venture-backed technology Portfolio companies ONS benchmark - UK private sector
research. EY have analysed the performance companies are creating innovative software,
of 53 companies representing many of the among other products, which will increase
£36.5bn £19.7bn
largest buyouts in the UK. This report3 the productivity of whole sectors of the
Innovation Nation 2020
shows that labour and capital productivity UK economy, like banking, insurance and
BVCA Fuel for the
increase under private equity ownership, healthcare. Specific case studies can be
Combined turnover generated by Collectively contributed to UK
by 1.5%–3.3% and 12.2% per annum found in part three of this report. venture capital and angel investment Gross Domestic Product (GDP)
respectively, while Gross Value Added backed businesses in 2018
The UK has created, over several
per employee across most of the last decades, the largest hub of private equity
12 years has increased by more than and venture capital expertise in Europe.
the UK private sector. The country is therefore well placed to London is the only European top ten destination
benefit from the attractive private equity and for VC investment (2016-2020)
venture capital ecosystem it has created.
Beijing $131.0bn
However, in order to benefit long-term, the
“Productivity isn’t everything, UK has to remain an attractive destination San Francisco $108.0bn
London – europe’s global tech city (dealroom)
but in the long run, it’s for international capital flows, and a magnet New York $76.5bn
Note: VC funds data for 2020 until 14/12
almost everything.” for global talent, to build on the country’s Shanghai $59.8bn
highly regarded legal and financial systems London $36.7bn
Paul Krugman, Nobel prize-winning economist Bengaluru $23.5bn
and dynamic and skilled workforce.
Boston $19.8bn
Singapore $19.7bn
2
The Impact of Private Equity Buyouts on Productivity and Jobs by Cambridge, US $18.0bn
John Gulliver, Wei Jiang :: SSRN
Los Angeles $15.6bn
3
EY Annual report on the performance of portfolio companies XIII
Part one bvca.co.uk //// @bvca
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Supporting UK cohesion Creating public value
35%
The COVID crisis has brought additional north of England5. Some of the most
attention to the long-standing gaps in exciting new developments in particular
economic performance between the sectors, such as pharmaceuticals,
UKTech.News
different nations of the United Kingdom medtech and AI6, each supported
The UK is home to 35%
and the regions within them. The by venture capital, are having a
cohesion challenges facing the UK, positive impact across the UK - and
of Europe’s unicorns
as characterised by the ‘north-south
divide’ or the need for ‘levelling up’,
are a priority for government.
this is expected to continue: Bristol7,
Manchester8 and Edinburgh9 received
substantial venture capital investment
43%
to fund university spinouts in 2020.
Private equity and venture capital firms
have created an investment footprint
in all parts of the UK, supporting Six of the UK’s 14 unicorns
Holistic view
a wide range of communities and are in the North West
business sectors and are well placed The case studies in this report further
to help address this challenge. illustrate our member’s investment UKTech.News
activities and show that the UK
56%
BVCA Report on Investment Activity 2019
is a prime destination for investment.
Geographic spread Covering the length and breadth of the
country, these businesses clearly
The geographic spread of the industry’s
demonstrate the willingness of our
investment has been notable since
member firms to invest wherever they
its inception: 56% of the industry’s
find diverse talent pools, strong
investment in the past 5 years lies
management teams and innovative ideas. All private equity and venture
beyond London and the south east of
England. To give a further illustration of capital – Investments by region
this, the north west of England saw close over the past 5 years (%)
4
https://www.bvca.co.uk/Portals/0/Documents/Research/Industry
to 10% of all private equity and venture %20Activity/BVCA-RIA-2019.pdf 2015-2019
capital investment in the UK in 20194. BVCA RIA data – 2015-2019
5
6
https://www.beauhurst.com/wp-content/uploads/2021/01/Spotlight-
Of the £43bn invested by BVCA members
44%
on-Spinouts-RAEng.pdf (page 5)
7
https://octopusventures.com/wp-content/uploads/sites/8/2020/
into 3,230 UK businesses from 2015- 11/Octopus-Ventures-Entrepreneurial-Impact-Ranking-2020-1.pdf
(page 11)
2019, £2.3bn of this was in Scotland, 8
https://www.businessupnorth.co.uk/university-spin-out-fund-makes-
Northern Ireland and Wales, £4.5bn half-a-million-pound-first-investments/
9
https://www.beauhurst.com/wp-content/uploads/2021/01/Spotlight-
into the Midlands and £6.6bn in the on-Spinouts-RAEng.pdf
Part one bvca.co.uk //// @bvcaNew
Horizons //// 11
Tackling climate and ESG Creating public value
Investing in Net Zero was launched in June 2020, bringing
Financier Worldwide
63%
together investors and fund managers
The UK was the first major economy to
totalling over £180 billion in funds under of PE firms now take ESG principles
commit to Net Zero by 2050 and will host
management. The network focusses on into account when making investments
the UN COP26 climate conference in
reducing carbon emissions of private
November. The UK’s green technology
equity-backed companies and securing
and green finance ambitions will require
sustainable investment performance. By
investment in early stage technology and Four of the 10 largest deals raised by European
pooling knowledge, opportunities and
entrepreneurs. Case studies in this report purpose driven tech in 2020 were in the UK
best practice, the network can help drive
show companies rethinking how we
investment in companies which will in
shop, to reduce packaging; to companies Company Description City Country Round size Deal date
turn drive the green recovery.
pioneering low carbon electricity and 1 Northvolt Lithium-ion batteries Stockholm Sweden $600m
September
2020
services; to companies revolutionising
Octopus
textiles manufacturing to reduce our 2 B2C sustainable energy supplier London UK $396m April 2020
Energy
Sharing values
reliance on high carbon materials. 3 Lilium
Fully electric vertical take-off
Weißling Germany $240m March 2020
and landing (VTOL) jet
Private equity and venture capital
Private equity and venture capital
backed companies are shining a light on 4 EcoVadis Sustainability ratings software Paris France $200m January 2020
investments build the foundations of
environmental, social and governance
a greener future. The UK Government 5 Kry Telemedicine platform Stockholm Sweden $154m January 2020
(ESG) by increasing the quantity and
aims to mobilise £12 billion in government Refurbished electronics
quality of reporting, which helps 6 Back Market
marketplace
Paris France $121m May 2020
investments and up to £36 billion from
drive behavioural changes. UK private
the private sector to deliver a ‘Green 7 Arrival Electric buses and vans London UK $113m January 2020
equity signatories to the UN Principles
Industrial Revolution’10. In 2019, venture September
for Responsible Investment increased 8 Connexin Smart city infrastructure Hull UK $106m
capital invested £336 million in Net Zero 2020
by 127% between 2015 and 2020. This Tokamak Fusion power research
companies in the UK, 55% more than 9 Abingdon UK $87m January 2020
transparency helps investors to select Energy company
France and 18% more than Germany11. February
private equity and venture capital firms 10 Volocopter Fully electric helicopter Bruchsal Germany $87m
2020
which share their values.
The State of European Tech 2020 – Atomico
Joining the dots for a
green recovery
Financier Worldwide
In an industry built on connections and
sharing good ideas, the UK branch of
the Initiative Climat International (iCI)
10
The Ten Point Plan for a Green Industrial Revolution (publishing.
service.gov.uk), 2020
11
Technation – net zero report, 2020 48% of UK private equity firms now report to
investors, in detail, on ESG impact
Part one bvca.co.uk //// @bvcaNew
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Keeping the UK competitive: the investment environment
Public value is at the heart of This has in no small part been achieved Private equity and venture capital firms impact of the pandemic on the health and
what private equity and venture by the UK’s longstanding approach to in London, Edinburgh, Manchester and economy of the UK means that everyone
can deliver for the UK. enterprise, summarised over 20 years ago other cities across the country are an will need to take a role in the recovery. The
by former Prime Minister Gordon Brown: important part of a broader financial industry acknowledges that this will include
Consequently, senior political figures in services ecosystem which makes Britain fair contributions to tackle the fiscal gap,
the UK have for many years recognised a globally significant financial services as well as its role in funding entrepreneurs
the importance of ensuring that the centre. This status is founded on the and innovators to assist the recovery.
attractiveness of Britain’s investment “[the] capital taxation ease of doing business in the UK and In addressing any wider tax issues, the
environment and its international system should better… the country’s regulatory, legal and tax international context will remain important.
reward risk taking and frameworks which set and maintain The current approach in the UK echoes
competitiveness are maintained.
promote enterprise.” world-class standards. international practice, by recognising
As the Prime Minister Boris Johnson gains made by private equity and venture
Former Prime Minister Gordon Brown However, the competitiveness of the
has stated: capital, in the main, as capital - this
UK’s investment environment is not
successfully incentivises entrepreneurial
unchallenged and other jurisdictions
investment, risk-taking and value creation
in Europe and elsewhere have been
over an extended period.
This international competitiveness has making inroads in recent years, eroding
“We are number one in Europe
underpinned the growth of the UK’s the country’s competitive standing. It is Alongside the wider business environment
for the emerging technologies important that no further ground should in the UK, an appropriate tax, legal and
private equity and venture capital industry
that will transform the lives of be lost, so the ambition expressed by regulatory environment will support the
in recent years. Funds managed by the
every single human being. Tech senior policymakers to see UK financial continued attractiveness of the UK as an
UK-based industry attracted nearly
companies are increasingly £50bn of investment capital in 2019, services grow, based on continued investment and employment location for
striving not solely to maximise approximately 90% of which was international openness, technological private equity and venture capital. This will
profits but to achieve a wider raised from international investors. This innovation and by embracing green enable the industry to continue to create
purpose, deploying the arsenal significant pool of capital is managed by a finance, is welcome. the public value highlighted in this report.
of technology against the specialist investment community based in As we transition to new arrangements,
giant evils of hunger, the UK, but drawn from across the world, the debate over the future of taxation of
poverty and disease.” meaning that the UK hosts the largest businesses and individuals is of great
hub of private equity and venture capital importance. The private equity and venture
Prime Minister Boris Johnson
expertise in Europe – as highlighted capital industry understands that the
elsewhere, it is the most significant
anywhere outside the USA.
Part one bvca.co.uk //// @bvcaNew
Horizons //// 13
Part two
Venture capital and
private equity in the UK
How the industry makes and delivers
its contributions to public valueNew
Horizons //// 14
Understanding private equity and venture capital
Funding the future the interests of the private equity firms
and their investee companies are
Private equity and venture capital are
closely aligned.
types of investment for companies with
high-growth potential. Private equity
and venture capital funding is part of
Venture capital funds work with founders
of high-risk, early-stage companies with Differences between venture capital
the growth journey for many small and
medium sized companies. Venture capital
significant potential for growth. In turn
for injecting capital, venture capital funds
and private equity
backs founders while private equity often receive an ownership stake, giving funds
allows entrepreneurs and parent companies a direct interest in the success of the
to pass ownership onto their management company. Venture capital has an outsized
teams. In addition private equity and venture influence on the economy and society; a
Venture capital Private equity
capital funding allows the company to relatively small venture investment early
Invests in emerging/high growth Invest in more mature/established
expand its reach, take risks, scale, and/ in a company’s life can help to create a industries businesses
or weather the bumps on the road to transformational, global company.
becoming a mature, larger business. Management team takes over
the business and founders/investors
Founders stay in the business – the
sell shares. In a secondary buyout
And onto the next stage… VC fund invests cash for new shares
investors usually back the same
A long term view In venture capital this will be the next management team
The duration of the investment varies funding round; and in private equity
Mainly private but can be
but generally it is between three and the next private equity investor in a Always private companies
public/quoted companies
seven years. secondary buyout, until the business
is listed on the stock market or sold to Majority/controlling stake in
Minority stake in more companies
large corporate investors. fewer companies per portfolio
Actively growing the Investment VC invests in early stage
PE can invest in public companies
companies alongside other
Private equity firms will work alongside and takes them private
investors (e.g. angel investors)
management teams to support the
growth and development of their portfolio Mixed funding structure –
Equity only
companies. To generate investment equity and debt
returns they must sell at a higher price
which means the company needs to
increase revenues and profits; therefore,
Part two bvca.co.uk //// @bvcaNew
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Company life cycle and investment requirements
Global Private Equity
Mid Market
Private Equity
Growth/financing requirements
Growth Capital/
Private Equity
Venture Capital
Startup Funds
Business Angels
Family Capital
Pre-startup Startup Growth Development Maturity & sale
This chart is illustrative only – firms in different parts of the industry may operate in more than one part of this investment spectrum, depending on their fund strategies.
Part two bvca.co.uk //// @bvcaNew
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Part three
Venture capital and
private equity in action
Case studies and further informationNew
Horizons //// 17
Case studies
In this part of the report we highlight case studies which highlight the way the industry operates and how individual businesses create public value.
These growth case studies offer insights on how the industry can deliver for each of the public policy priorities.
COVID recovery Competitiveness Cohesion Climate
• CMR Surgical • ATG • Bollington Wilson Group (Cheshire) • ELeather
Supported by CIC Supported by ECI Partners Supported by Inflexion Supported by ETF Partners
• Curve OS Limited • Concirrus • British Engineering Services • Smarter Grid Solutions
Supported by Outward VC Supported by IQ Capital (Manchester) Supported by Scottish Equity Partners
Supported by Inflexion
• Fishawack Health • Dr. Martens • The Modern Milkman
Supported by Bridgepoint Supported by Permira • Glide (Clevedon) Supported by ETF Partners
Supported by Inflexion
• Gammadelta Therapeutics • HEG (Host Europe Group) • UK Power Reserve
Supported by Abingworth Supported by Cinven • Merlin Entertainments (Poole) Supported by Inflexion and Equistone
Supported by Blackstone
• Huboo • Purplebricks • Vital Energi
Supported by Episode 1 Supported by DN Capital • Moneypenny (Wrexham) Supported by Scottish Equity Partners
Supported by ECI Partners
• Lovecrafts Group • Revolut • Willerby
Supported by Highland Europe Supported by Seedcamp • Neurovalens (Belfast) Supported by Equistone
Supported by IQ Capital
• Modulr • Riverlane
Supported by Frog Capital Supported by CIC • Radius Payment Solutions (Crewe)
Supported by Inflexion
• Onfido • Shazam
Supported by TempoCap Supported by DN Capital • SHE Software (East Kilbride)
Supported by Frog
• Phlexglobal • Thought Machine
Supported by Bridgepoint Supported by IQ Capital • Skyscanner (Edinburgh)
Supported by Scottish Equity Partners
• PragmatIC • TransferWise
Supported by CIC Supported by Seedcamp • WEALTH at work (Liverpool)
Supported by Equistone
• Random42 • Winterbotham Darby
Supported by Vespa Capital Supported by Equistone • WHP Engineering (Gateshead)
Supported by Endless
• Verona Pharma • Wireless Logic
Supported by Abingworth Supported by ECI Partners
Part three bvca.co.uk //// @bvcaNew
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Growth case study
CMR Surgical
CMR Surgical is on a mission to What lasting value did Future growth plans
transform surgery for patients around the PE/VC investment bring? CMR’s ambition is to make the benefits Sector
world, with innovative technology and
CIC invested in CMR in their Series A and of keyhole surgery available to everyone Healthcare and Life Sciences
data that can improve surgical care. In who needs it by building the world’s
supported the company through investments Supported by
only six years, CMR has gone from initial best medical robotic system and making
in the Series A+, Series B and Series C at Cambridge Innovation Capital
concept to Versius, its next-generation which point it achieved unicorn status. It has it available at an affordable price.
surgical robotic system which has been Location
achieved regulatory approval in multiple Cambridge
used to perform over 1,000 procedures territories and has commercial operations in 6
globally, including in the NHS; the globally countries with over 1,000 clinical procedures Initial investment date
July 2016
accepted benchmark for value-based conducted with its Versius robotic system to
healthcare. Versius brings all the benefits date. The excellence of its system through its
versatility and cost-effectiveness, is delivering Impact of PE/VC investment
of keyhole surgery to the patient while
providing surgeons with greater dexterity, on the company’s ambition to bring the Number of employees
benefits of keyhole surgery to a much wider Pre-investment: 49
precision, and better visualisation than Latest: 594
patient population.
manual keyhole surgery, allowing them
to perform more complex procedures. The credit for the progress they have made
falls entirely with the founders, management,
and dedicated staff. What CIC sought to
What did the business need? do alongside its co-investors was bring
in a corporate structure that allowed the
CIC invested in CMR at the first Series A “Our success is in no small
company to thrive and grow. CIC wanted to
which was the first institutional round. The part thanks to CIC, who has
create an environment where strategy could
company had a great management team, be constructively discussed, consensus
always had the long-term
an incredibly strong technology base and reached, and decisions implemented without vision to support CMR.
huge ambition. The entrepreneurial spirit impeding the entrepreneurial spirit that was Since its initial investment,
of the founders had created a dynamic, fundamental to the success of the company. CIC has continued to support
fast-growing company with a strong internal CIC brought on a former surgeon with our growth and has shared
culture. The company needed additional experience in laparoscopic surgery, who was in our mission to transform
capital to expand the capabilities in-house able to provide informed challenges to the surgery, for good.”
and to develop their system prototype. team as they developed their clinical strategy.
Per Vegard Nerseth, CEO
Part three bvca.co.uk //// @bvcaNew
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Growth case study
Curve OS Limited
Curve consolidates all your banking Future growth plans
and loyalty cards into one through
Going into 2021, Curve’s main areas Sector
its mobile application, providing
of focus with regards to growth are Consumer Retail
automated rewards, credit, no FX fees to increase the number of product
and seamless expense management. Supported by
features within its app and to roll out Outward VC
its offering into the United States.
Location
Bristol
What did the business need?
Initial investment date
Curve needed capital to scale growth in June 2017
new markets, including North America, and “Using [Outward VC’s] deep
Amount invested
to accelerate the development and roll out knowledge of how to support £1.2m
of new product capabilities (i.e. Curve
early-stage founders, they took
Credit), while increasing conversion
from its current customer base.
a chance on us when others Impact of PE/VC investment
were more sceptical, giving us Turnover
full and warm access to their Pre-investment: £0-1m
Latest: £5-10m (2020)
What lasting value did network and material advice at
PE/VC investment bring? cross sections of our journey. Number of employees
Pre-investment: 35
Over the three years since Outward VC’s
It was a potent combination, Latest: 285 (2020)
initial investment into Curve, the fund which helped us shape our
introduced the management team to new vision into reality.”
partners (such as Alipay and Facebook)
Shachar Bialick, CEO
and new investors (such as Vulcan
and Tazlina Global). Additionally, Outward
VC promptly reacted to Curve’s migration
from Wirecard, providing safeguarding
and settlement accounts, alongside other
payment solutions, through Investec Bank.
Part three bvca.co.uk //// @bvcaNew
Horizons //// 20
Growth case study
Fishawack Health
Fishawack helps pharmaceutical Bridgepoint also kicked off a project
groups bring new products to market to improve Management Information
through the rollout of IT systems, which Sector
through the provision of specialised
will provide more readily available Healthcare and Life Sciences
and value-added services. The business
utilisation data to control costs. Supported by
serves more than 100 clients globally
Bridgepoint
and helps to commercialise more Bridgepoint is enhancing Fishawack’s M&A
than 300 drug compounds. strategy to become more proactive. Under Location
Bridgepoint’s ownership, the company Knutsford
Founded in 2001, the business has has completed two add-on acquisitions: Initial investment date
been built up organically and through StoneArch, a Minneapolis-based creative March 2020
small add-on acquisitions to become agency with a strong reputation in the
a global player. Today it operates medical device and health technology Impact of PE/VC investment
from 14 offices in the US, Europe sector, and The Hive Health Group, a Number of employees
and India. Fishawack has three strategically led healthcare marketing Pre-investment: 840
principal service lines: Medical Affairs, and scientific communications business Latest: 850 (Jan 2021)
Commercial Services, and Consulting. based in London and New York.
What did the business need? Future growth plans
Fishawack would benefit from further Bridgepoint’s business plan envisages
professionalisation and has significant continuing to drive organic growth,
operational improvement potential. margin enhancement, and M&A
to add complementary services,
broaden Fishawack’s customer base,
What lasting value did
and consolidate the sector. “In partnering with
PE/VC investment bring? Fishawack is a robust platform that will Bridgepoint, we have
Bridgepoint has held the asset for less
be used as the base for a buy and build made a step-change
strategy in the attractive but fragmented
than 12 months. During this short period, pharmaceutical commercialisation in our ambition.”
Bridgepoint has already created a clean services sector. Bridgepoint has identified Oliver Dennis, CEO
and simplified organisational structure and more than 75 potential targets, from
successfully recruited a new Chairman. smaller in-fill acquisitions to potentially
transformational opportunities, which
will help to rapidly build scale.
Part three bvca.co.uk //// @bvcaNew
Horizons //// 21
Growth case study
Gammadelta Therapeutics
Gammadelta Therapeutics is developing three major institutions, put the board treatment of cancers and as the data
the potential of gamma delta T cells in place, including representation on the is generated, the company will look to
board by Abingworth, and helped recruit its future either as a stand-alone public Sector
to create improved immunotherapy
the management team including Paolo company or as a UK based entity for Healthcare and Life Sciences
of cancer and other serious diseases.
Paoletti, the former head of Oncology at a large pharmaceutical company. Supported by
Based on the pioneering research of
GSK. Abingworth was also instrumental Abingworth
Professor Adrian Hayday at King’s College
in bringing Takeda into the collaboration. Location
London and the Francis Crick Institute,
London
the company plans to exploit unique
properties of tissue resident gamma Initial investment date
August 2016
delta T cells for effective immunotherapy.
“The significant advances we
Takeda Pharmaceuticals has formed a
strategic collaboration with GammaDelta
have made would not have
and, together with Abingworth, has been possible without access to “Abingworth’s decision to provide
committed up to $100 million in funding the company-building expertise the seed finance and operational
and has an exclusive option to acquire and continued financial support support needed to create
the company for an undisclosed sum. of Abingworth. We look GammaDelta highlights the key
forward to continuing this highly role VCs can play in bringing
productive relationship as we cutting-edge technology from the
What did the business need? work to realise the transformative laboratory into mainstream drug
Abingworth helped create the company, potential of the world-leading development. We are making
working with leading academic and world science of Professor Adrian significant progress in our
expert, Professor Adrian Hayday, at mission to deliver highly effective
Hayday and Dr Oliver
Kings College. This included negotiating allogeneic immunotherapies
Nussbaumer that underpins
licenses with three institutions and based on the unique properties
then bringing in Takeda as a key funder GammaDelta.” of Vδ1+ T cells, which could
and supporter of the company. Paolo Paoletti, CEO provide important patient survival
benefits in the treatment
of cancers.”
What lasting value did
Paolo Paoletti, CEO
PE/VC investment bring? Future growth plans
Abingworth provided the initial seed The company has the potential to
capital, negotiated the licences from have an enormous impact on the
Part three bvca.co.uk //// @bvcaNew
Horizons //// 22
Growth case study
Huboo
Huboo are a tech-driven multichannel model. The Product Development team has
ecommerce fulfilment company. Huboo increased significantly in size, as have the
front-line Sales & Marketing teams so that Sector
integrates with online marketplaces such
the company can continue to scale at pace. Technology
as Ebay, Amazon and many more for
Funding from investors has played a central Supported by
free, and securely store, reliably pick and
role in their journey so far and our expansion Episode 1
package, and smoothly deliver orders.
into new territories is testament to that. Location
Their unique software driven approach
Bristol
to fulfillment means that they can serve
clients of all shapes and sizes, from the Initial investment date
What lasting value did April 2019
smallest eBay seller to multi-million-pound
PE/VC investment bring? Amount invested
brands, and their service is far cheaper
The continued support from investors £18.5m
than any known like-for-like competitor.
has supercharged the company scaling,
Huboo offers two months free storage creating a huge volume of new jobs Impact of PE/VC investment
for each new shipment and has grown in what has been a challenging and Annual turnover
substantially since inception. Their unprecedented employment environment. Pre-investment: £0.24m
expansion roadmap outlines plans to This positive impact for the local job Latest: £12m
take the company in to mainland Europe market will be replicated as the company Number of employees
and North America by the end of 2021. grows across the UK, and throughout Pre-investment: 2
Europe and North America. Latest: 250
The company has delivered cutting edge,
What did the business need? innovative award-winning technology which “This investment played a crucial
Investor funding was needed for the
has fuelled our consistent and significant role in propelling our growth. It has
company to accelerate expansive growth
growth. Due to their success, Huboo have enabled us to build and continue
plans, starting nationally in the UK and
made their first acquisition – an online to build teams of exceptional talent,
expanding into mainland Europe and North
marketplace – as they focus on diversifying and curate award-winning technology
America later in 2021, creating hundreds of
their product and service range. to disrupt the fulfilment market,
jobs in the process. resulting in rapid and continued
expansion.”
The company has been investing in
Martin Bysh, CEO
software and people to provide the best
customer experience in the industry and
challenging the perceptions of fulfillment
with their unique human-centric Hub
Part three bvca.co.uk //// @bvcaNew
Horizons //// 23
Growth case study
Lovecrafts Group
Lovecrafts Group is a leading online the largest online player in the USA,
crafts community, which lets creative increasing the business scale by over
50%. Secondly, the investment allowed Sector
minds find inspiration from leading
the business operationally to grow: moving Consumer Retail
experts and designers, learn new
into larger warehouse facilities, developing Supported by
techniques, connect with like-minded
more robust operational warehouse Highland Europe
people all over the world, and shop craft
management, and continuing to develop Location
supplies. Essentially, it is a mix of content,
the online presence of the business. London
community, and commerce, and is a Thirdly, they were able to recruit a world
complete ecosystem for makers. Initial investment date
class independent Chairperson, Peter
July 2015
Bazalgette and a seasoned CFO who
has IPO experience, Marcus Jennings.
Impact of PE/VC investment
What did the business need?
Number of employees
Highland Europe have invested in five Pre-investment: 50
rounds at LoveCrafts, from Series B round Future growth plans Latest: 160
to Series C rounds, and co-led three internal LoveCrafts are looking to list on the London
rounds alongside Scottish Equity Partners AIM market during 2021 and plan to use the
and Balderton Capital. The investment was proceeds of the IPO to continue to make
essential to complete several acquisitions, strategic acquisitions and fuel their growth.
improve operations, recruit new team As investors, Highland Europe are not
members, and fuel growth. expecting to exit at IPO but see it as
another funding round.
“The investment in
Lovecrafts by our
What lasting value did syndicate has been
PE/VC investment bring?
essential to grow the
The investment was key to bring about
business, internationalise
several significant changes to the business.
Firstly, it has enabled the acquisitions and recruit great
of Debbie Bliss, Sew & Sew and most people.”
recently Webbs Inc. by December
Edward Griffith, CEO
2020. Excluding the Webbs deal, these
acquisitions represent over 20% of total
sales. The Webbs transaction is more
transformational and makes LoveCrafts
Part three bvca.co.uk //// @bvcaNew
Horizons //// 24
Growth case study
Modulr
Modulr are an API driven B2B Payments- business across the UK and Europe. Frog
as-a-Service platform and Electronic provided support across sales & marketing
and talent & organisation functions to Sector
Money Institution (EMI) delivering a
drive product development and achieve Technology
new type of payment account. Modulr
strong operational growth across the UK. Supported by
enables businesses to segregate
Frog Capital
client funds, automate and receive Frog Capital helped Modulr complete
payment flows more efficiently and successful investment from key corporate Location
partners and deliver a healthy growth plan London
cheaply than traditional banking.
across 2020 and into 2021, while winning Initial investment date
One of Europe’s fastest growing payment £10m grant through the ‘RBS Alternative February 2019
platforms, Modulr are working with 100+ Remedies Package’ and securing cash
clients across multiple channels enabling headroom through debt facilities, and Impact of PE/VC investment
the growth of some of Europe’s most receiving investment from Highland Number of employees
successful businesses including Revolut, Europe, PayPal and FIS World-pay. Pre-investment: 109 (Mar 2019)
Liberis, Paxport and Wagestream. Latest: 201 (Dec 2020)
Modulr has continued to expand and grow
their business across the UK and Europe,
they have grown >85% and enjoyed 120%
What did the business need? revenue growth (2018-20).
“The Frog Capital
Modulr needed a Scale-Up partner with
both fintech experience and operational
team have had a very
expertise to help scale the business Future growth plans constructive impact. Their
across the UK and Europe. The business Modulr continue to expand its products team of operating experts
would benefit from investors who could
provide operational expertise across sales
and services to existing clients, as well have been particularly
as secure new clients and expand across
& marketing, leadership & talent, and the Europe. Recent investment from PayPal
useful in the areas of sales
finance function, particularly regarding and FIS Wolrdpay, two of the largest & marketing and helping
corporate partnership and investment. global payment companies, is a strong us attract further top
endorsement of Modulr’s continued
success and will further support their tier investors.”
What lasting value did growth ambitions across product Myles Stephenson, CEO
PE/VC investment bring? development, business development
and expansion across Europe.
Since Frog Capital’s investment in February
2019, Modulr has expanded and grown its
Part three bvca.co.uk //// @bvcaNew
Horizons //// 25
Growth case study
Onfido
Onfido are setting the new standard for growth strategy and valuable customer
digital access. The company digitally introductions, both in the U.K. and
North America. Sector
proves a user’s identity using artificial
Technology
intelligence, and facial biometrics. TempoCap’s investment allowed the
Onfido gives companies the assurance Supported by
company to expand its operations across
TempoCap
needed to onboard customers remotely Europe, through key hires and more
and securely. established presence in France, as well Location
as build a foothold in Asian markets such London
Recognised as a global leader in AI for as Singapore. Initial investment date
identity verification and authentication, 2017
Onfido have approximately 400 team
members across seven countries, and is Future growth plans Impact of PE/VC investment
enabling digital access for some of the Turnover
Onfido maintain a growth strategy focused
largest companies around the world. Pre-investment: £3.6m (2016)
on accelerating their international presence, Latest: £27.6m (2019)
expecting their future revenue growth to be
Number of employees
driven by the US and EU. The company
What did the business need? plans to expand the current product, which
Pre-investment: 150 (2017)
Latest: 400 (2021)
In their series C round, Onfido needed is aimed at onboarding new customers for
additional support to implement a growth fintechs and banks, to include services
strategy and accelerate its international focused on ‘identity’ across the client life
presence, with a particular focus on US cycle. The goal is to manage end-to-end “TempoCap’s investment and
customer growth. The company also digital identity through services centred on support has been critical to funding
needed funding to facilitate product onboarding, reauthentication, password our business plan, including our
development, to aid the expansion of the recovery, and fraud mitigation. accelerated expansion in the US.
company’s machine learning technology, Additionally, the team has provided
while maintaining its market-leading substantial value-add in the form of
position in speed and accuracy. large customer introductions and
strategic advice to support plans
for continued growth.”
What lasting value did
David Clarke, CFO
PE/VC investment bring?
TempoCap have provided Onfido with
strategic advice regarding the company’s
Part three bvca.co.uk //// @bvcaNew
Horizons //// 26
Growth case study
Phlexglobal
Phlexglobal are a specialist provider What lasting value did What did the investment achieve?
of Trial Master File (“TMF”) software PE/VC investment bring? Bridgepoint bought Phlexglobal for £42m Sector
and services to global pharmaceutical
Under Bridgepoint ownership, Phlexglobal at an EV/EBITDA multiple of 9.1x in 2014, Healthcare and Life Sciences
companies and clinical research and 2.5 years later, sold the business
implemented greater strategic focus on Supported by
organisations. A TMF is a collection of for £116m at 13.5x EV/EBITDA. The
the development and implementation of Bridgepoint
essential documents created during technology, and significantly enhanced significant valuation multiple re-rating
a clinical trial for regulatory purposes. Location
its software development capability with is evidence of the transformation of the
Amersham
Phlexglobal offer an end to end solution a 45% increase in R&D investment and company from a project-led TMF services
to cater for all potential TMF needs of its the launch of an upgraded eTMF product, provider to a fully outsourced provider Initial investment date
of electronic TMF (eTMF) solutions. July 2014
clients, from fully outsourced electronic which led to client wins in the clinical
eTMF software provision with associated research outsourcing sector. Phlexglobal Amount invested
transitioned from being a services led €28.2m
document processing services, as well
as a range of project related services. TMF business to having a more balanced
software and services offering. Impact of PE/VC investment
Turnover
Phlexglobal strengthened its business
Pre-investment: £15.4m
What did the business need? development function and significantly Post-investment: £23.9m (Dec 2016)
expanded its international presence.
Phlexglobal needed support in the evolving
As a result, the US accounted for
repositioning of the business from a
59% of revenue at exit vs. 34% at
service led hybrid offering to a technology
entry. Bridgepoint helped Phlexglobal
led hybrid offering. It also needed to
to enter the Japanese market (3rd
preserve the continued growth in overseas “We have enjoyed significant
largest globally at the time).
territories with a focus on the USA, the growth under Bridgepoint
world’s largest pharmaceuticals market. Bridgepoint also achieved significant Development Capital’s
It was recognised that the business
operational improvements: EBITDA ownership, extended our
margins increased by 660bps through the customer and operational
would benefit from expanding
roll-out of a new document processing
existing relationships with Japanese base and relaunched
technology and the creation of a low-
pharmaceutical customers. Investment in PhlexEview, our eTMF
cost centre in Poland (with Bridgepoint’s
the company’s software platform would
Warsaw office playing an important role
platform.”
enable Phlexglobal to take advantage of
in choosing an appropriate location). Rick Riegel, former CEO
the opportunity to replicate its service
eminence in the eTMF software market.
Part three bvca.co.uk //// @bvcaNew
Horizons //// 27
Growth case study
PragmatIC
PragmatIC is a world leader in ultra- based radio frequency identification makes innovative electronic solutions
low-cost flexible electronics. Their (RFID). This would extend the Internet of readily accessible to businesses of
Things to the Internet of Everything. all sizes across a diverse range of Sector
flexible integrated circuits (FlexICs)
industries. The company plans to expand Technology
are thinner than a human hair and
and deploy a global network of 100 Supported by
can be invisibly embedded in objects,
What lasting value did FlexLogIC lines, geographically placed Cambridge Innovation Capital
enabling innovators to create novel
for efficient manufacturing and delivery.
solutions to everyday problems that PE/VC investment bring? Location
FlexIC-based RFID is already being Cambridge
are not practical with conventional Cambridge Innovation Capital’s
electronics. FlexICs are manufactured on adopted in multiple market segments Initial investment date
understanding, strategic input, and
addressing worldwide challenges, including December 2014
a revolutionary FlexLogIC® production continued investment support throughout
healthcare (NHS), pharma (Schreiner
system, a scalable manufacturing the evolution of the business has made
them a reliable partner for PragmatIC for
MediPharm), waste management (UK Impact of PE/VC investment
model for cost-effective high-volume
Government) and sustainability.
production. FlexIC Foundry™ service more than six years. Under the guidance Number of employees
of CIC, the potential for PragmatIC’s Pre-investment: 12
is a service, is a less time intensive, Latest: 85
technology in RFID, attracted investment
and cheaper service for developing
from Avery Dennison, the world’s
application-specific flexible devices.
largest RFID inlay manufacturer, which
led to the complete installation and
commissioning of the first FlexLogIC
What did the business need? production system in 2018. “CIC has been a vital partner
PragmatIC needed funding to support its for our business during the
In 2019, PragmatIC formally launched its
transition from Research & Development to development, installation and
ConnectIC® RFID product line, securing
pilot production. The company had already commissioning of our first
orders for over 20M units from global
demonstrated a viable fabrication process companies eager to add connectivity
FlexLogIC system and launch of
for their FlexICs, but the business needed and intelligence to their everyday our first commercial products.
investment to support their development items. Later that year the company Their understanding of deep tech
of FlexLogIC®, a scalable, self-contained announced their FlexIC Foundry™. companies has allowed them to
and fully automated production system. support us effectively on
PragmatIC also needed support to this journey.”
expand their product development Future growth plans Scott White, CEO
and commercial activities, to prove the
PragmatIC’s vision is to embed their
technical achievability and strong demand
technology in a trillion smart objects
for the ability to give everyday items a
over the coming decade. FlexLogIC,
unique electronic identity, through FlexIC-
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