Here we feature the latest equity investment news in Wales
Fund managers are being invited to bid to run the debt and equity elements of a new £130m fund for Wales from the British Business Bank.
The bank, which is the economic development bank of the UK Government, said its new Investment Fund for Wales will consist of three elements all with the aim of supporting the growth plans of Welsh SMEs.
Fund managers are expected to be revealed this summer for a small loans funds ranging from £25,000 to £100,000, a larger debt fund (£100,000 to £2m) and an equity fund with the ability to invest per deal up to £5m. The Development Bank of Wales, which is wholly-owned by the Welsh Government, has confirmed it will bid for each elements - although it is unlikely that one organisation would be awarded the fund management contracts for all three
The British Business Bank said the plan is for the fund to go live this autumn. At this stage it said it was unable to give a funding split on the three element. It was also asked if the equity fund would operate on the venture capital and private equity standard two and twenty model - an annual management fee of 2% and 20% on profitable exits.
Ken Cooper, managing director of venture solutions at the British Business Bank, said: “The new Investment Fund for Wales is designed to increase the supply and diversity of finance available to smaller businesses in Wales.
“Given the geographical spread of Wales’s smaller business population, connecting with entrepreneurs in some of the more rural and hard-to-reach areas will be an important focus of the fund.
“Levels of equity investment and also private debt lending are currently below Wales’s share of the UK’s small business population, so we’ll be working closely with the local finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”
Coincover
Cardiff-based digital asset protection technology venture Coincover has secured a $30m (£25m) equity investment boost to support its expansion plans.
In one of the biggest ever investment rounds into a Welsh start-up, the latest injection of growth capital into Coincover has been led by Silicon Valley-based investor Foundation Capital. The fresh capital will accelerate recruitment, product updates, and partnerships to safeguard the crypto ecosystem. Each year around $3bn of crypto is hacked and stolen.
Coincover provides businesses, infrastructure providers, and consumers products that protect them from both hackers and human error.
It is already working with more than 300 businesses, from exchanges and wallets to hedge funds, family offices, and banks. The firm also works directly with a number of digital asset custodians to keep their clients safe. Current customers include Fireblocks, Bitso, and many more.
The new funding will accelerate customer adoption, ensuring Coincover can aid any digital asset business or individual that needs protection. It is also expected to support a doubling in its current headcount of 60 over the next year.
Coincover was set up in 2018 by David Janczewski and Adam Smith and launched a year later.
Chief executive Mr Janczewski said: “We’re delighted to partner with Foundation Capital, a firm with an unparalleled reputation for helping businesses scale to support customer growth. At Coincover, we’re proud to prevent users from losing access to their cryptocurrency, whether that be through a mistake or the misfortune of being targeted by malicious online hackers.
"In the wake of a challenging year for the crypto market, Coincover is in high demand, as businesses and consumers scramble to safeguard their digital assets. Through this new funding, we can supercharge our service for all existing and future customers – building a better and more mature digital asset ecosystem in the process.”
CanSense
Swansea life sciences firm CanSense, which has developed a blood test that aims to save lives by diagnosing bowel cancer at an early stage, has been boosted with a £1.5m equity round.
Its latest funding has been backed by Mercia, the Development Bank of Wales and liquid biopsy company Nonacus.
CanSense’s test, which combines laser spectroscopy with artificial intelligence, is faster, less expensive and less invasive than a colonoscopy procedure and more acceptable for patients than a faecal blood detection kit. It could help detect bowel cancer at an early stage when it is much easier to treat and the chance of survival is much higher.
Studies have shown that it can detect pre-malignant polyps, before they develop into cancer. It can also rule out cancer with a high degree of accuracy and could therefore help GPs decide which patients to refer for further investigations. Currently less than one in ten patients who have a colonoscopy are found to have cancer and unnecessary procedures are estimated to cost the NHS around £300m a year.
The funding, which follows a £1.2m grant from the National Institute of Health Research in 2022, will enable the company to further develop the product and carry out clinical trials in order to meet regulatory requirements and bring it to market.
CanSense’s blood test is based on research by Professor Peter Dunstan, Professor Dean Harris and Dr Cerys Jenkins at Swansea University which was part funded by Cancer Research Wales. They joined forces with Dr Adam Bryant, an entrepreneur and former investment banker with a PhD in physics, to set up CanSense in 2019.
Adam Bryant, the company’s chief executuive, said: “Symptoms of bowel cancer are non-specific so it is hard for GPs to detect. Many patients are sent for a colonoscopy but the majority of these tests are negative, creating an inefficient pathway which is now at breaking point. Our test could help GPs to make the right triage decisions, freeing up diagnostic services and ensuring high-priority patients are seen as quickly as possible. By detecting bowel cancer at the earliest possible stage, it could also significantly improve outcomes for patients.”
Bowel cancer is the second most common cause of cancer deaths in the UK, accounting for over 16,800 deaths each year. Early detection is paramount – patients diagnosed with stage 1 colon cancer have a 95% chance of surviving for five years or more, compared to just 5% for those diagnosed at stage 4. Currently only 15% of cases are detected early but the NHS long-term plan aims to increase this to 75% by 2028.
Rafael Joseph, investment manager with Mercia, said: “CanSense is one of a new generation of cancer diagnostic tools which have the potential to save many lives and lower the burden on the NHS. Mercia has a specialist knowledge of this field and has backed a number of innovators. CanSense is another piece in the puzzle and its ability to detect cancer at the earliest stage is particularly exciting.”
Andy Morris, investment executive in the Technology Venture Investments team at the Development Bank of Wales, said: “We’re pleased to have backed CanSense during this investment round with equity support. Their testing technology shows huge potential, with benefits for NHS backlogs if adopted widely, and we’re glad to support the work of this company as it brings its expertise to Wales’ increasingly strong med-tech sector.”
Creo Medical
One of Wales’ leading medical devices company, Creo Medical, has raised over £33m following two share offerings which will fund its continued global expansion. The Chepstow-based Alternative Investment Market listed firm announced last month that it was looking to raise a minimum of £25m via a conditional placing and subscription of new ordinary shares and a further £5.2m through an open offer.
The company closed its first share offering having raised £28.5m. Now, the company has announced that it has also raised the further £5.2m, taking the total fundraise to £33.7m and exceeding its original target by more than £3m.
Joint brokers Cenkos and Numis led the fundraiser. In January, Proactive research analyst John Savin put £100m valuation on Creo in a research note on the group but added that Creo could be worth up to between £200-£250m.
The funds will be used to help the firm maintain momentum in the business following its significant operation progress last year, including the commercialisation of its electrosurgical devices. The directors also expect the funds to allow Creo to breakeven with its cash flow and achieve profitability.
Research from Proactive on Creo Medical’s close of an oversubscribed £33.7m fundraise reported that the latest fundraising exceeded expectations with the open offer by about 32%.“This should allow Creo to continue the development of its minimally invasive surgery devices as well as make important investments in training medical professionals to use its devices, and in commercialising its core technology and consumables to markets in the US, Asia, and Europe.”
The Development Bank of Wales, a long-term investor in Creo, supported the latest fundraising with a £1.5m investment.
A spokesman for the development bank said: “We are pleased to have backed Creo Medical during their extended open offer, with £1.4m in equity investment. We have supported Creo for more than 10 years, and we’re proud to continue our support for a consistently innovative and promising Welsh medtech company.”
Motomec
Aberdare-based independent garage business Motomec has been acquired in a management buyout.
With a six-figure loan from the Development Bank of Wales Alexander Sage and Carl Adams have take ownership of the business which was established by Eddie Hawkins in 1987.
Motomec has three work stations, an MOT station and parking for around 20 vehicles on site. The company also has technicians who are qualified to carry out repairs and servicing to electric and hybrid vehicles.
Mr Sage, aged 27, said:“Eddie has built the business from the ground up getting it to where it is today and where it continues to deliver services at the highest possible standard.
“We’ve been increasingly running the business over the last year as Eddie has prepared for retirement so we’ve had plenty of support to make the transition from employees to owners but as young entrepreneurs, there is still a lot to take on. That’s why we are so grateful to the development bank for their help – their solutions focussed approach has enabled us to take advantage of this great opportunity to take the business forward and focus on the future of the business. Eddie has given us a fantastic opportunity and hope that he enjoys his well-deserved retirement.”
Sally Phillips, investment executive with the Development Bank of Wales, said: “Motomec is a long-standing and profitable business that has been servicing and repairing vehicles in the community of Aberdare for 36 years. With a strong reputation, the small team is proud of their work and committed to securing the long-term success of the business.
“Here at the Development Bank of Wales, we’re passionate about working with young people to help them realise their business ambitions. There is plenty of support available for young entrepreneurs in Wales, from business advice and workshops to loans and grant funding for start-ups, acquisitions and management buy-outs. We’re pleased that we’ve been able to help Alexander and Carl to fund their management-buy out and help them on their journey.”
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