Investment opportunities show future’s looking bright
We feature the latest equity deals involving Welsh firms to support growth and job creation
Chepstow-based IQ Endoscopes has raised more than £4m to support its growth plans.
The funding round will provide investment to achieve regulatory approval for its single-use flexible gastroscope, as well as accelerating the development of its single-use flexible colonoscope.
The round has been led by the Development Bank of Wales and Creo Medical. Last year both investors providing a £1.5m seed investment which saw IQ Endoscope relocating to Wales.
The latest round has also been backed by Nepcoe Capital Partners and Australian Unity’s Future of Health Care Fund.
IQ Endoscope’s Q-vision technology will replicate the physical handling and ergonomic performance of reusable endoscopic technologies, through a patented and sustainable single use platform. Single use endoscopy will not only eliminate all threat of cross contamination between endoscopy procedures, but also increase throughput of patients and allow greater access to flexible endoscopy procedures on a global scale.
Matt Ginn, chief executive of IQ Endoscopes, said: “We are delighted to have secured this Series A fund from our original investors as well as welcoming new co-investors to the round.
“We would like to thank both the Development Bank of Wales and Creo Medical for their support and funding since our seed investment in July 2020.
“This new funding will allow us to achieve regulatory approval for our single use flexible gastroscope (Q-vision G100) as well as accelerating the product development of our single-use colonoscope.
“We will continue to expand our team in South Wales and look to build critical foundations that will allow us to rapidly commercialise our technology on a global scale.”
Creo was supported by the Development Bank of Wales as an investor over multiple rounds up to its float in 2016. The Development Bank is an active equity co-investor, with funds available for high-growth potential technology businesses from seed and spin-out through to IPO (float) and beyond.
Craig Gulliford, chief executive of Creo Medical, said: “Creo Medical is delighted to have supported IQ Endoscopes in its series A equity funding round. It is a scale-up business with an excellent management team and a compelling, unique patented technology.
“Their mission to transform the delivery of endoscopy services by eliminating the challenges and risks presented by traditional reusable endoscopes complements our dedicated vision of improving patient outcomes in the emerging field of therapeutic endoscopy. We look forward to supporting them as they scale.”
Dr Richard Thompson, senior investment executive at the Development Bank of Wales said: “Having worked closely with IQ Endoscopes since their initial seed investment in July 2020, the development bank has been impressed with the executive team and their compelling technology offering in the flexible endoscopy market. The company is focussed on developing a technology platform that not only addresses a vast global market but will have a profound positive impact on healthcare. It has been a pleasure co-invest again with Creo Medical, the angel syndicate as well as our new co-investors.”
Victor Windeyer, portfolio manager of Australian Unity Future of Healthcare Fund, added: “The Australian Unity Future of Healthcare Fund makes purposeful investments designed to generate long-term capital growth, and to enhance the health and well-being of Australians. We look domestically and globally for such companies we were impressed with the IQ Endoscopes team, their product and their ambition to address the issue of cross contamination in endoscope procedures.”
HAYDALE
Ammanford-based technology firm Haydale Graphene Industries has raised £5.1m (gross) from an oversubscribed fundraising.
The Alternative Investment Market listed firm facilitates the integration of graphene and other nanomaterials into the next generation of industrial materials and commercial technologies.
The fundraising will be used predominantly to fund general working capital needs of the business, support the scaling up of manufacturing capacity at the Ammanford site and drive forward product rollout into the US market.
CHARACTER.COM
Swansea-based online retailer of children’s licensed clothing and accessories Character.com has secured a multi-million-pound equity investment to support its growth plans.
Investor BGF, formerly known as the Business Growth Found, has taken a 23% stake in the business. It represents its sixth investment into a Welsh firm.
Founded in 2009 by husband-andwife team Stephen and Karen Hewitt, Character.com has seen revenues grown from less than £10m four years ago to more than £50m in the last financial year to end of July.
Over the past 12 years, it has become one of the largest online retailers in its market, with customers across Europe and North America.
Co-founder and managing director Mr Hewitt said: “We are delighted to agree a partnership with BGF. We have grown our business substantially since founding it in 2009, and it was hugely important to us that we found a partner which would support us to drive the next phase of growth whilst maintaining the culture and brand which we love.
“We have found this in BGF, and we are excited about realising our future plans for the business together. The retail environment is changing fast but there are some really exciting opportunities out there for us as a business. “
Edwin Davies led the deal for BGF alongside Hannah Waters and Alex Garfitt. Grant Thornton provided corporate finance advice to Character. com.
As part of the investment by BFG Karen Hubbard joins the board of Character.com as non-executive chair.
Ms Hubbard has significant experience in retail through her career at The Card Factory, B&M and Asda and
is currently chair at Redu Group and Bgf-backed Moteefe.
Victorian Sliders
Carmarthenshire sash windows firm Victorian Sliders is creating 50 jobs on the back of a £14m equity investment from BGF.
In its biggest investment in a Welsh firm, BGF has taken a 31% equity stake in the Ammanford-based business.
Established in 2005 by its founder and chief executive Scot Starkey, Victorian Sliders, will create the new jobs over the next 12 to 18 months.
The new jobs are being created through a doubling in the firm’s production capacity and investment in its recycling plant, helping it to cement its position as Europe’s largest specialist manufacturer of UPVC vertical sliding sash windows.
Manufacturing 2,000 windows a week, Victorian Sliders is expecting to deliver more than £30m in revenues this year. The business currently employs 318 and supplies more than 5,000 trade customers throughout the UK via its own fleet of vehicle. It operates from a purpose-built 240,000 square foot production facility.
Mr Starkey said: “We are delighted to have secured this investment from BGF, while also benefiting from their unparalleled business expertise. This investment will enable us to grow faster, support our customers better and expand our existing team of highly skilled and dedicated employees.”
Set up in 2011, BGF has invested over £2.5bn in more than 400 companies, making it the most active growth capital investor in the UK.
TAHDAH VERIFIED
Software firm Tahdah Verified have secured a £1m equity investment to support its job creation and growth plans.
The investment round into the Llandudno-based firm has been supported with £750,000 from Liverpoolbased fund management special, Alliance Fund Managers [AFM], which is mandated to invest on behalf of the Merseyside Special Investment Fund (MSIF), and £250,000 from the Development Bank of Wales.
It is the first time the two investors have co-invested together on an investment. The funding from the MSIF has come from its Merseyside Loan and Equity Fund.
Tahdah, established by chief executive Neil Rylance in 2016, provides a multi-tenant cloud-based system for awarding bodies, training providers, membership associations and clubs, employers and candidates.
The system provides real time insight and data to clients, while also acting as a fully verified lifetime record of achievements for end users. Current users include Mountain Training, the Chartered Institute of Management for Sport and Physical Activity (CIMSPA) and the Royal Life Saving Society UK.
The equity investment will now be used to grow the business with the further development of the functionality of the platform and the creation of new jobs in Llandudno as well as a new office in Liverpool.
Mr Rylance said: “We’ve worked hard over the last few years to develop Tahdah as a secure online featurepacked management system that can be tailored to meet the bespoke needs of our customer base.
“With a solid foundation, we’re now ready to take advantage of this fast growing sector and I’m particularly pleased to be doing this with the support of MSIF and the Development Bank as co-investors. North Wales is my home and I’m proud to say that Llandudno is the birth place of Tahdah while Liverpool is where my parents originate from. It’s also home to my team, Everton Football Club.”
Marc d’abbadie, head of equity at AFM, said: “We are delighted to be backing Neil and the team at Tahdah’s expansion into Liverpool. We were impressed by the traction Tahdah has with its current clients as well as its potential to scale, and are excited about its future.
“We are also very pleased to be coinvesting with the Development Bank of Wales, who are forward-thinking and hands-on investors who understand the challenges of running a technology business.”
Colin Batten, investment executive for the Development Bank of Wales, said: “With the right support and equity investment from the Development Bank and Merseyside Loan and Equity Fund as investors, Tahdah will be in a much stronger position to develop and grow.
“MSIF has an impressive track record as a supportive funding provider so we’re delighted to be coinvesting with them for the first time and working together to help drive the growth and future success of Tahdah as an innovative technology venture from their base in Llandudno.”
FREIGHT LOGISTICS SOLUTIONS
Pontypool-based transport logistics firm Freight Logistics Solutions (FLS) has secured a £2.2m equity and debt investment.
The funding from the Development Bank of Wales will help the firm’s client mitigate the impact of driver shortage and an ageing workforce, as Covid, Brexit, alongside customs and changes to the IR35 tax regime combine to create a perfect storm.
Grant Thornton’s Cardiff corporate finance team and Capital Law’s legal team advised the shareholders, with O’brien & Partners providing tax advisory services.
Employing 40 staff, FLS operates primarily within the UK and EU road freight space.
With an extensive subcontractor network of haulage firms across the UK and Europe, it optimises customers’ logistics operations and transport spend using a suite of tracking and KPI reporting measures.
Managing director Ieuan Rosser said: “The combination of Covid-19, Brexit and changes to IR35 means the UK road freight industry is faced with some incredibly difficult times with the shortage of drivers only getting worse.
“Manufacturers and shippers are having to maximise their options as many hauliers are understandably unable to commit to their previous arrangements with driver availability and cost dictating demand.
“Indeed, many are changing their transport model to ensure that they have the best possible capacity during these times.
“As a supply chain management company, FLS have access to over 50,000 vehicles across UK and Europe. We also benefit from strong buying power and all-inclusive customs – it’s an increasingly attractive option for our rapidly growing client base.”
Joanna Thomas, senior investment executive at Development Bank of Wales, said: “The FLS management team has a great vision for the future, and they share a commitment to being one of the UK’S leading providers of end-to-end supply chain solutions from their base in Pontypool.
“Our funding will enable investment in technology that will drive further growth and we are looking forward to working alongside Ieuan and his team to deliver on their plans.”
The Development Bank was advised by Geldards’ corporate team in Cardiff. Partner Alex Butler was the lead adviser, supported by Ewelina Wagiel and Joga Singh.