Since its launch in April 2014, the Wales Technology Seed Fund has invested £3 million, leveraging an additional £3 million in co-investment –a pound-for-pound funding ratio.
The £7.5 million fund makes investments in early stage science and technology companies from £50,000 through to £250,000. Companies looking for investment from this fund must have a technology-focused business plan and be located in, or willing to relocate to, Wales. So far the Wales Technology Seed Fund has invested in 21 ambitious companies. Most investments are equity based.
Recent deals have included equity investments in software companies Paperclip, Hudman and Koherent.
A six-figure investment in Cwmbran-based Hudman took the Technology Venture Investments team at Finance Wales to the £3 million milestone.
The software firm provides cloud based enterprise and accounting software for manufacturing, engineering and construction industries. The latest deal follows angel investment from David James who was put in touch with the company by xénos – The Wales Business Angel Network.
James, who is now the managing director of Hudman, said:
“This investment is going to help accelerate our company’s growth. We’ve already seen success in the B2B market with our software and we’re looking forward to building on this success over the next two years and beyond.”
The fund was launched by the Welsh Government to address the lack of early stage capital identified by the Innovation Wales strategy.
Economy Cabinet Secretary Ken Skates said:
“The fund is supporting young technology starts ups at a critical stage of their development and providing the seed funding needed to support the commercialisation of their intellectual property.
“I am pleased to see the fund is having an impact and businesses are also benefiting from Finance Wales’ links with private and institutional co-investors. We need to support home grown talent and attract more of these types of business with high growth potential to Wales.”
Last financial year Melanie Goward, Finance Wales’ Technology Seed Fund Manager, led investments into three technology start-ups – Nemesis, Trecento and Kitlog.
“The impact of the fund has been tremendous,” explained Goward. “We’ve been able to work with a range of ambitious companies starting out. We’ve been able to support home-grown talent as well as luring exciting early growth firms to Wales.”
One firm to benefit from seed funding is North Wales based software company Kitlog. They secured a six-figure co-investment deal through the fund. The company created and own the Papertrail platform, an online tool for logging statutory paperwork and records. Their software is already saving thousands of staff and contractors time and money managing safety compliance and statutory inspections.
“Finance Wales has helped us to mature our business into a better position for success,” explained Kitlog CEO and co-founder Ben Scholes. “Melanie has contributed at our Board meetings, which has been a big help. We’re looking forward to gaining more experience working with her and tapping into future networks via her contacts.”
The firm, which has offices in Conwy and Newcastle-upon-Tyne, launched Papertrail in 2013. The B2B software is now being used internationally and has helped businesses from a range of industries improve their compliance requirements, reducing risk and improving operational efficiency.
“The Wales Technology Seed Fund provides excellent opportunities for technology-focused early stage companies based in Wales,” added Goward “We’re active co-investors and have experience of structuring competitive equity and debt packages. The Finance Wales Technology Ventures team is hardworking and creative, and we really enjoy working with high growth potential firms across the science and technology sector.”