The SFC SEIS Fund is a new generalist SEIS Fund targeting a portfolio of primarily early stage SEIS companies across all sectors with strong growth and compelling exit prospects.
Investors can take advantage of EIP and SFC collective experience, access and expertise in the UK early stage sector, with the aim of investing in the next wave of high potential British companies.
The SFC SEIS Fund will take advantage of the UK’s nurturing landscape which includes the presence of world-leading universities and Fortune 500 companies, specialist tech capabilities, great infrastructure, a pre-eminent financial centre, and supportive policies for SMEs.
These assets have allowed London to develop a dynamic start-up hub, illustrated by the development of “Tech City”, the technology cluster located in East London. According to the report “Titans of Tech – European Tech Comes of Age” published by GP Bullhound in July 2018, there are 25 British “unicorns” (a start-up company valued at over $1 billion) which boast a cumulative value of c. $60bn (GP Bullhound, July 2018). These companies operate across various sectors such as financial services (Funding Circle, Transferwise), e-commerce (ASOS), real estate (Zoopla) or even food delivery (Just Eat, Deliveroo). Several of these companies are now publicly listed on the London Stock Exchange or the NASDAQ. These early successes are paving the way for many more. These companies have shown how “disruptors” can be successful when having access to the funding to fuel growth, either by grabbing significant market shares from the incumbents or developing completely new offerings with the ability to build sustainable businesses.
From an investor’s point of view, this shows not only a potentially huge market opportunity but also the possibility of a clearer route to exit (the realisation of gains for investors) either via trade sales to established firms or public listings of fast growth companies.
Martin Sherwood, founding partner of Enterprise Investment Partners comments: “SFC is in a key position in the early stage investment scene, a testament to the strength of their investment model, the quality of their deal flow and the strong activity and diversity of their angel network. We pride ourselves in working with highly experienced asset management teams, whilst providing quality and value for our investors. With a focus on transparency, we aim to transform exceptional concepts into successful and fast-growing businesses.”
The SFC SEIS Fund will invest into the most exciting SEIS opportunities that come through SFC’s award-winning network and syndicate partners. In July 2016, SFC was awarded the ‘Lead Syndicate of the Year’ by the UK British Angels Association (UKBAA) and won the ‘Best Angel Syndicate’ award at the 2017 Growth Investor Awards. Most recently, SFC was named the ‘Best Innovation or Rising Star in EIS/SEIS – Company 2017’ by the EIS Association. Startup Funding Club is a leading organisation in the UK early-stage investment world and operates an award-winning Business Angel Network and a series of SEIS/EIS funds.
This isn’t the first fund for EIP and SFC, who already working together on their SFC EIS Growth Fund, which was set up to capitalise on the early stage investment market by investing in companies in their “growth” or scale-up phase, i.e. businesses that have recently come out of the “start-up” phase by demonstrating significant commercial traction and fast growth, with potential for future capital appreciation. This fund has already invested in some disruptive businesses, including Transcend Packaging, an alternative packaging provider, who in their first 6 months post investment secured the contract to supply eco-friendly paper straws to fast food giant McDonalds.
The new SFC SEIS Fund is open for investment and limited to £10 million. The main closing dates will take place on 31 October 2018 and 31 March 2019 unless fully subscribed earlier.