QIB Q4 2020: Reflections on 2020
We’re rounding the year off on a high - with reflections on investment patterns and news of a new £10m co-investment fund targeting South West businesses.
On Thursday 3rd December, investors and enablers of investment gathered online for the final Quarterly Investment Briefing for 2020. The event focused on a round up of the last year from an investment perspective and featured lightning talks from the UK Business Angels Association and from our data partner Beauhurst. We rounded off the event with some good news thanks to Bristol Private Equity and Newable who shared news of their investment activity this year and of the £10m fund which has recently been announced.
We started by celebrating the 12 companies that had raised over £18m between them since mid September and since then we have heard some good news from the Living Map team in Bath who announced an £850k raise. Our lawyer friends tell us that the traditional annual flurry to get deals done before the end of the year is playing out again in 2020 so I hope to bring you more good news for Q4 in my final monthly investment update via TechSPARK.
We looked briefly at the total equity investment raised this year so far only to find we are lagging well behind 2019, and 2018 and our guest speakers confirmed that this is reflective of a wider national picture too. Thanks to our new virtual event delivery, we have a video of all the best bits (below) which I really encourage you to watch. So, rather than share a full rundown of the event in my usual style, I thought I’d pick out my top 5 takeaways:
- Rod Beer, MD of the UKBAA left us on an optimistic note with the observation that angel investors, who largely have been more conservative with their novel investments in 2020, will want their money to go further in 2021 which may prompt ‘levelling up’ that Boris would be proud of as investors shift their investments away from London and the South East.
- For budding angel investors out there, Rod also shared some research which is hot off the press - a Monte Carlo Simulation conducted by Founder Catalyst which indicates that the ideal portfolio size is 17 investments and that investors will see an average 2.7x return with this approach.
- Henry Whorwood, Head of Research & Consultancy at Beauhurst gave us a story of two halves. The number of deals and volume of investment is not hugely down on the same period last year (13% and 17% respectively), he anticipates that across the country this will be on par with 2019 once the end of year deals come through. However, when it comes to first round deals, things look rather more bleak - number of deals are down 30% and volume of investment is down 52%.
- Looking locally, Henry also shared the news that Bristol comes 8th in terms of number of deals with 43 so far (when looking outside of London only). I observe that we’re trailing slightly behind Leeds where NorthInvest have made some significant progress in driving investment and well behind Manchester where the Northern Powerhouse Investment Fund received a further £100m from the Chancellor recently. We also learnt that in the South West AI, Cybersecurity and FinTech are leading the way in terms of deal numbers - which is reflective of the pattern seen across the country albeit in a slightly different order.
- Jerry Barnes of Bristol Private Equity Club (BPEC) shared news of their achievements in the 4 years to September 2020: 23 companies invested in to the tune of £7m, and 41 deals in total including follow-on making an average of £300k deal size. He also shared his excitement for the arrival of the Newable fund which will see a further £10m available for companies in the South West which Jake Ronay went on to explain - do check out the slides for more detail on this.
If you are keen to access the new Newable fund, you have a couple of options - if you’re based in Bristol and raising equity investment, apply to BPEC for funding via their website and if they think your company fits the investment thesis for Newable (see slides) they will make the necessary introductions. If you are based in the wider South West, you can approach Newable directly via Jake Ronay.
And on that note, I’ll bring this summary to a close and invite you to share it with anyone you think might be interested. Watch this space for the final numbers for 2020 in my December Investment Update.
Watch the event back
This article is written as part of the Investment Activator Programme (IAP) in the West of England. This programme is run by TechSPARK and is kindly sponsored by TLT LLP, delaware, Smith & Williamson, West of England Combined Authority, UWE, Sanderson, Engine Shed and Rocketmakers.
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