Equity fundraisings generate £7bn in 2018
UK companies raised £7bn in 2018, according to Beauhurst, although that was lower than the £8.27bn raised in 2017. This figure is still much higher than any year prior to 2017. However, more money was raised through crowdfunding than in the previous year.
The number of investment deals fell by 10% to 1,572 and the average investment was 15% lower at £5.4m. The largest seven fundraisings accounted for more than £1bn of the cash raised.
The amount raised by fintech companies was £1.27bn, which was nearly as much as the previous year. Artificial Intelligence businesses raised £686m, which is more than the previous two years combined.
Crowdcube was responsible for 168 fundraisings with Seedrs accounting for 158. However, Crowdcube raised £143.2m, compared with £81.8m by Seedrs. SyndicateRoom funded 35 companies, raising £25.1m.
Crowdfunding had a strong fourth quarter of 2018 with 95 deals, raising £105.7m.
Axioma claims efficiency for funding
Axioma Europe Ltd is the latest firm that believes it can make motor insurance claims handling more efficient. Axioma is seeking up to £400,000 at a share price of £15 via Crowd for Angels. That equates to up to 19.9% of the company and would value the company at £2.05m.
Machine learning is used to categorise motor claims and automate the handling of the claims through its marketplace of garages and engineers.
The business is pre-revenues and they are expected to be modest for the next couple of years. In 2021, the business plan predicts revenues of nearly £4m and EBITDA of £2.05m. This suggests Axioma could be a highly operational geared business with margins expected to be even higher on near-quadrupled revenues the following year.
Management appears to believe that even the minimum funding level will be enough to get the business to profit. Of course, things rarely go smoothly.
Co-founder and chief executive is experienced in technology and mergers and acquisitions-focused investment banking. Co-founder Alexandre Ikeni has advised start-ups and other insurance businesses. The two men own 60%/40% respectively, prior to any new money.
Axioma is eligible for EIS and SEIS. The minimum subscription level is £240,000. The pitch closes on 21 April.
The Growth Stage is a regulated membership platform that connects institutional investors to private companies seeking finance. The London-based firm held its inaugural summit in Manchester on 26 February. This will be followed by summits in Edinburgh, London, Dublin, Stockholm, Palo Alto and New York.
The platform was launched in October 2018. It is free for private companies to join and there is a charge of 1% of any successful fundraisings.
Currently on offer is a company seeking to raise cash via a share issue and a bond issue by another company. There are also potential deals in existing shares of private companies.
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