London-based Newable Private Investing has launched its first evergreen enterprise investment scheme (EIS) for young companies wanting to scale up.
With an initial raise of £10 million in the first year, the Newable Scaleup Fund 3 addresses the funding gap between seed stage and Series A. Its target is high growth early stage companies that have moved from concept to a working business model but don’t yet have the numbers to attract venture capital or private equity.
The firm hopes to invest in seven to ten businesses operating in cutting edge industries through the fund, with particular emphasis on electronics, automation, medtech and spacetech.
Newable was founded in 1982 under the name Greater London Enterprise. In 2016 the company rebranded, and in 2017 it acquired the London Business Angels network.
Alexander Sleigh, investment director at Newable, said: “We are delighted to launch our first evergreen fund, through which we will continue to invest in visionary, knowledge-intensive companies creating the technologies of tomorrow.
“Our selection process, which includes scrutiny by our extensive angel network at events throughout the year, is crucial – if you want to pick winning businesses, five hundred brains are better than one.”
“Our investment strategy is absolutely aligned with the true spirit of EIS, identifying and supporting early-stage businesses we believe will have a profound, long-term impact in their space, and through doing so delivering on returns for our investors.”
Each year around 1,900 early-stage companies fit Newable’s investment profile. The firm presents around 100 of these businesses to 500 angel investors; in the end, roughly 20 receive funding.
This intense screening process results in a failure rate that’s less than half the London average; Newable boasts a success rate of 33%. In 2018 its average round size was £1 million.
Movers and shakers
Recent success stories include Hallmarq Veterinary Imagining, developers of specialist MRI scanners for horses, cats and dogs, which yielded five-fold returns when it completed a management buyout led by August Equity in December 2018.
Hallmarq makes what is currently the only MRI scanner in the world that is large enough for a standing horse. For professionals this means better diagnostics without general anaesthesia, which can be fatal. While most vets use refurbished human machines, Hallmarq’s systems are developed specifically for the physiology of companion animals.
The current NPI portfolio includes popular costume jewellery brand Astrid & Miyu, corporate catering delivery service City Pantry and flexible office provider Citibase.
The firm has already snapped up several high-tech ventures including Rezatec, a cloud-based analytics platform for satellite data; Sphere Fluidics, facilitating advanced screening and characterisation of cells for applications in biotech and pharmaceuticals; and Hummingbird Technologies, an agritech company using drones to provide farmers with sophisticated insight into crop development.
Chris Manson, CEO of Newable, said: “At Newable, we’ve been supporting young businesses across Britain for more than 35 years, at the heart of the ecosystem, bringing a mix of hands-on experience and expertise, market connections, and financial support.
“We see it as our mission to give people the confidence boost they need to take the next step – to start, sustain, and grow their companies. We see their potential, we understand the challenges they face – in particular, the widening gap between seed and Series A – and we are building innovative investment products to help them address those challenges.”