Recovery in fundraisings in the first half of 2019
Beauhurst says that £4.5bn has been raised in publicly announced fundraisings during the first half of 2019. This was the second-best six-month period for fundraisings, behind the second half of 2017. There were 889 deals.
Total crowdfunding investment was £92.4m through 187 deals. That is less than one-third of the cash raised during 2018.
The main increase has been in money raised for growth companies, although more established firms have also raised more. Fundraisings below £500,000 and the more sizeable cash calls both grew with a decline in deals between £1.5m and £2m. The majority of deals are worth less than £2m, though.
FinTech was particularly buoyant during the period, with £1.68bn raised, which was more money than in any other six-month period. The first half figure was more than for 2018 as a whole. The number of EdTech and medical technology deals increased.
OakNorth Bank raised £440m and Ovo Energy, which sponsors the women’s cycling tour of Britain, raised £200m.
Beauhurst says that 13% of the start-up companies that it tracks no longer trade. This increases to 25% of those that raised money in 2011. The highest percentage of these dead companies is in the companies that attended an accelerator in the same year. There were 42% of companies that attended an accelerator in 2011 and did not raise equity investment that have stopped trading. The figure falls to 13% if there was equity investment. University spinouts that also raised equity investment have much better survival rates than those without a share issue.
Surrey County Cricket Club will announce details of a mini-bond on 16 August. Members will have priority for subscriptions between 17th and 30th September. The cash will be used to build an improved Lock/Laker stand. Planning permission was granted last November, and the capacity of the Kia Oval will be increased to 29,000. Construction will begin in late September.
The terms of the mini-bond could be similar to those on offer for the previous mini-bond in 2015, where the interest rate was 5.5%. The rest of the cash for the investment will come from bank debt and cash reserves.
Third Atlantis bond issue
Tidal power company SIMEC Atlantis Energy is raising more funds via Abundance Investment. This is the third fundraising via the crowdfunding platform by the AIM-quoted company and this time Atlantis wants to raise up to £7m via a bond. This is more than previous bond issues raised. The 2018 bond and the initial bond each raised £4.3m.
Atlantis Future Energy 2019 will last for five years and have an annual interest rate of 8%. These are similar terms to the first two bonds. So far, £240,000 has been raised.
The first tidal power project was MeyGen in Scotland and Atlantis wants to use the experience gained to build other projects around the world. This includes projects in north western France. It is also involved in converting the coal-fired Uskmouth power station to use hard to recycle waste to generate electricity.
Cornish Lithium has raised £1.38m from a crowdfunding via Crowdcube. The lithium explorer originally asked for £1m in an EIS-approved fundraise. The investment is equivalent to 6.46% of the company, based a pre-money valuation of £20m. The cash will be used for further exploration of the area of Cornwall where it has exploration rights for lithium and other battery materials. The plan is to drill three holes this summer in order to extract lithium samples and data. Cornish Lithium (www.cornishlithium.com) was keen to give local people the chance to invest.
The Seedrs secondary market opens at 11am on the first Tuesday of the month and closes at 11am on the following Tuesday. Investors can request to sell shares at any time, but if they want to buy then it has to be in the week when the market is open. The buyers do not pay a fee, but sellers are charged a nominee administration fee on any profit made – but no fee if there is a loss.
AFC Wimbledon seeks cash for return
AFC Wimbledon is seeking to raise £2m to help finance its return to Plough Lane, where its previous incarnation used to play. The pre-money valuation was £24.1m. So far, £1.57m has been raised.
The football club is building a new stadium at Plough Lane in Wimbledon, because the previous one was pulled down, and it intends to move from its current home in Kingston-upon-Thames.
A piling rig has been on the site in order to start the building of the West Stand. The main construction contract is being finalised.
Primary Bid helped AIM-quoted Sareum Holdings raise a total of £781,000 at 0.4p a share, which was a 27% discount to the market price. The drug developer will use the cash to further develop the lead internal TYK2/JAK1 inhibitor programmes so that it can move towards human trials.
Oil and gas company ADM Energy is the latest company to use Primary Bid to raise cash. The cash will enable ADM to appraise investment opportunities.
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