London-based Newable Private Investing has launched its first evergreen fund targeting young companies wanting to scale up.
With an initial raise of £10m in the first year, the Newable Scaleup Fund 3 addresses the investment gap between seed stage and Series A, targeting high-growth early-stage companies that have moved from concept to a working business model but don’t yet have the numbers to attract VC or private equity money.
NPI aims to invest in seven to ten such businesses operating in knowledge-intensive industries through the EIS fund, with particular emphasis on the specialist areas of electronics, automation, medtech, and spacetech.
Focused on investing in game-changing technologies, the fund provides a gateway to Series A for visionary businesses that are now looking to scale commercial operations. Newable and NPI’s Investment Committee are directly investing into the fund.
Alexander Sleigh, investment director at Newable Private Investing, said: “We are delighted to launch our first evergreen fund, through which we will continue to invest in visionary, knowledge-intensive companies creating the technologies of tomorrow.
“Our selection process, which includes scrutiny by our extensive angel network at events throughout the year, is crucial – if you want to pick winning businesses, five hundred brains are better than one.
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“Our investment strategy is absolutely aligned with the true spirit of EIS, identifying and supporting early-stage businesses we believe will have a profound, long-term impact in their space, and through doing so delivering on returns for our investors.”
Each year around 1,900 early-stage companies fit NPI’s investment profile, of which a vetted selection of around 100 are presented to NPI’s group of 500 active angel investors. Of these 100 companies, NPI typically invests in around 20.
This process of scrutinising and filtering unrivalled dealflow has resulted in a failure rate that is less than half the average for London startups, with previous NPI funds achieving a success rate of 33 per cent.
Recent successful exits include Hallmarq Veterinary Imagining, a specialist in advanced diagnostics for horses and companion animals, which yielded five-fold returns when it completed a management buyout led by August Equity in December 2018.
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The current NPI portfolio includes: Rezatec, a cloud-based analytics platform for satellite data; Sphere Fluidics, facilitating advanced screening and characterisation of cells for applications in biotech and pharmaceuticals; and Hummingbird Technologies, an agritech company using drones to provide farmers with sophisticated insight into crop development.
Chris Manson, CEO of Newable, said: “At Newable, we’ve been supporting young businesses across Britain for more than 35 years, at the heart of the ecosystem, bringing a mix of hands-on experience and expertise, market connections, and financial support.
“We see it as our mission to give people the confidence boost they need to take the next step – to start, sustain, and grow their companies. We see their potential, we understand the challenges they face – in particular, the widening gap between seed and Series A – and we are building innovative investment products to help them address those challenges.”