Beauhurst says that deal numbers fell in the first quarter of 2018 to their lowest levels since the third quarter of 2014. They were 10% lower than the fourth quarter of 2017.
There was £1.26bn invested in 329 deals in the first quarter of 2018. The amount raised was more than half the level in the previous quarter, while there were fewer deals worth less than £500,000 as a percentage of the total in the quarter. There was a greater percentage of deals in the £2m-£5m range.
Fintech remains a major source of deals but artificial intelligence deal numbers have been on a downward trend for more than a year and were at their lowest level since the third quarter of 2015.
Crowdfunding deal numbers fell from 112 in the fourth quarter of 2017 to 83 in the first quarter of 2018, although that was slightly higher than the 78 a year earlier. The amount raised was down from £68.8m to £53.8m, but higher than the £39.9m raised the year before. Crowdcube and Seedrs handled 35 and 32 deals respectively.
Private deals continue to raise more money than is being raised on AIM. This does not take account of smaller companies that have floated on the Main Market, though.
In 2015, private fundraising deals outstripped AIM fundraisings, helped by some particularly large deals, which is taken to be £50m plus. The trend has continued since 2015. Many private deals have been particularly large, for example, Deliveroo raised £285m in 2017. This reflects how much more can be raised these days without going public.
Annual AIM fundraisings by new and existing quoted companies have stayed in the £4bn-£6bn range, while private deal levels have soared past £10bn in 2017.
Beauhurst argues that these figures reflect an increase in patient capital. It also believes that flotations are being deferred until a later stage in a company’s development.
Backers will still want to cash-in on investments and flotations and trade sales are the main ways of doing that.
There are still smaller businesses that find it difficult to raise the capital they need to grow, whether they are quoted or not. They fall between a small start-up business and a large, well-known brand like Deliveroo.
Merseyside Assured Homes is offering a three-year bond via Abundance Investments. The bond offers an annual interest rate of 4.5% when acquired via the Abundance platform.
The plan is to raise up to £4.25m, which is repayable in June 2021. Merseyside Assured Homes is a developer of social housing and supported living accommodation and the cash will help finance 30 developments in the Liverpool area. The developments are mainly two or three bedroom homes.
These homes will be leased to a social housing landlord for 50 years.
Britbots plans to launch The British Robotics Seed Fund II, which will focus on UK-based robotics and artificial intelligence companies. This would be eligible for EIS and SEIS relief.
Former GB judo team member Dominic Keen is the founder of Britbots. He was chief executive of mobile commerce business MoPowered, which floated on AIM in December 2013 at a valuation of £15.8m. He left the board of the renamed mporium in September 2015 after the company changed its business strategy to focus on digital marketing and analytics.
Britbots also has three individual company offers that are currently open. All three offers are eligible for EIS relief.
Tethered Drone Systems, which builds autonomous drones for use in surveillance and communications, has raised £174,700 out of the £250,000 it is seeking. The pre-money valuation was £1.34m.
Robotic surgical platform developer Freehand Surgeon has raised £441,000 of the £500,000 it is looking for. The pre-money valuation was £6.01m.
Zoa Robotics builds affordable robots inspired by nature and it has raised £188,300 out of the £250,000 target. The pre-money valuation was £1.22m.
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