EIS approvals fall
Private investor network Growthdeck says that HMRC approved 62% of the 3,270 requests were granted EIS approval in 2018-19, compared with 75% the previous year. This follows a tightening of the rules. In the previous decade the average approval rate was 85%. Nearly 3,000 applications were approved in 2016-17, compared with just over 2,000 last year. Approximately 30,000 companies have raised money through EIS.
Cotswolds takes second bite at crowdfunding
Cotswolds Distillery is raising cash via Code Investing to increase production and market its brands. This is the second crowdfunding by the distillery. The first crowdfunding round in January 2016 was at £7 a share, with a subsequent fundraising in 2018 at £20 a share, and the latest is at £22 a share, which is equivalent to ten times net sales.
Cotswolds Single Malt and Founder’s Choice are the two main whiskies made by the company. Cotswolds Dry Gin is another of the group’s products. Management says that it believes that the company could be self-funding by 2021.
The offer lasts until 13 January (https://equity.cotswoldsdistillery.com/). The minimum investment is £1,012 and there are benefits available to investors depending on the amount of cash they invest.
The benefits include lifetime discounts, early access to new products and distillery experiences. The minimum investment provides a 10% discount on purchases made in the company’s own shops and first access to new whisky releases.
Distillers are popular with investors. Devon-based Salcombe Gin wanted to raise £800,000 in its campaign using Seedrs. And in the first week it had already raised £863,000. The cash is being invested in production capacity, sales and marketing, and product development. There will be extra cash available to invest in sales and marketing. Salcombe has secured a deal with P&O to install the first distillery at sea.
Highlands distillery Nc’nean has raised £950,000 from via crowdfunding through Seedrs. The organic whisky distiller will use the cash to buy bottling equipment and develop its products, which include Botanical Spirit, a mix between whisky and gin. The target is £1m, which would be the equivalent of 5.68% of the share capital.
SulNOx set for NEX Growth Market entry
Fuel emulsifier technology developer SulNOx is joining NEX on 17 December and it will be valued at £42.3m at 50p a share.
SulNOx originally said it planned to join NEX during the summer when it raised £550,000 in pre-IPO funds. It has developed a process that can emulsify hydrocarbon fuels, such as diesel and heavy oils. The products can reduce Nitrous Oxide, Carbon Dioxide and Sulphur Oxide gases and particulates, as well as making combustion more efficient. The emulsifier can be used in existing engines.
Tidal energy technology developer Nova Innovation has gone past its original target of £500,000 and has raised more than £700,000 from in excess of 900 investors. Nova is keen to raise more cash and it has received EIS advanced assurance. Nova is installing up to six of its 100kW turbines in the Bluemull Sound, offshore Shetland Islands. The pre-money valuation was £28.2m.
Peer-to-peer lenders will be faced with much tougher regulation following the collapse of FundingSecure and Lendy. This could lead to consolidation in the sector as smaller platforms close. Seventeen firms have withdrawn applications to be authorised as peer-to-peer lenders by the FCA. The rules include that new customers will only be able to invest up to 10% of their liquid assets in peer-to-peer lending. There will also be more scrutiny of the corporate governance of the platforms.
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