Briefing: startup deals in July 2017

30 Aug 2017 | Beauhurst

Each month, Beauhurst issues a briefing on the most interesting deals into high-growth companies from the previous month; in this case, July 2017. The UK startup deals are covered by various news publications and subsequently published here.

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Overview

Number of deals: 119 (-22 on previous month)
Total raised: £782m (-184)
Average deal amount: £7.31m (-0.23)

Commentary

It is perhaps unsurprising that we have seen a slight slowdown in deals over July: the annual August fall has traditionally been prefaced by a stagnant or slightly poor July. As with every industry, summer holidays have an effect. Nonetheless, this fall has been steeper than in any previous year:

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The total invested, however, remains higher than at any point during 2016, bolstered by technology businesses – in particular two significant investment in fibreoptic broadband providers: Hyperoptic (£100m) and TrueSpeed (£75m).

The most active investment body was crowdfunding platform Crowdcube, which participated in 12 investments throughout July, followed by Seedrs, which participated in 4.

More companies at the growth stage were backed this month than is traditionally seen: 29% of investees were late-stage companies, compared to 21% in June. Mobile apps overtook SaaS as the most-backed subsector, receiving 7% of all investments (up from 6.2% in June).

Biggest deals

Companies that raised over £30m in July 2017

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1. Hyperoptic

Hyperoptic operates a fibreoptic broadband network, preferring ‘full fibre’ cabling to the fibre-and-copper mixture preferred by other providers.

Deal date: 30th July 2017
Deal amount: £100m
Investors: ING Corporate Investments, NIBC Bank, BNP Paribas, and RBS
Notes: This is by far the largest deal yet secured by Hyperoptic, and takes its total raised to £155m over five fundraisings.

2. TrueSpeed

TrueSpeed is also a fibreoptic broadband company.

Deal date: 11th July 2017

Deal amount: £75m

Investors: Aviva

Notes: This too was TrueSpeed’s largest raise: it had previously secured £250k (January 2016). We explored the company’s growth.

3. Darktrace

Darktrace is a cybersecurity firm founded in Cambridge, and whose main focus is software that identifies behavioural anomalies in humans in order to detect security threats.

Deal date: 11th July 2017

Deal amount: $75m (£58.3m)

Investors: Insight Venture Partners, KKR & Co., Summit Partners, Ten Eleven Ventures

Notes: Previously valued at £187m (July 2016), this takes the firm’s total raised to £135m over five fundraisings.

4. Revolut

One of the UK’s leading challenger banks, Revolut’s original product (still in use) was allowing users to hold cash in multiple currencies.

Deal date: 12th July 2017

Deal amount: $66m (£51.2m)

Investors: Balderton Capital, Index Ventures, Ribbit Capital

Notes: Revolut’s valuation a year ago was £35.8m pre-money, but having raised two rounds since it is likely that the young company has grown in value significantly – with some commentators putting its value at £300m. Here’s how it compares to other challenger banks.

5. Receipt Bank

Receipt Bank has developed accounting software that allows users to save and edit scanned invoices, bills, and receipts, which can then be shared with accountants or other parties.

Deal date: 20th July 2017

Deal amount: $50m (£38.6m)

Investors: Insight Venture Partners, undisclosed investors

Notes: Valued at £21.8m eighteen months ago, Receipt Bank has raised a total of £47.9m over three investment rounds.

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