Finding and monitoring the UK’s 8,000 (and counting) high-growth companies means that we see entrepreneurship and innovation in almost every conceivable sector, niche and area. Here are some of the biggest deals we’ve seen.
As we are particularly focussed on equity investments in these companies, we’ve seen some very interesting deals since we began tracking in 2010. This piece takes a closer look at some of the largest we’ve seen so far, ranging from disruptive startups to more established players.
2016 so far has shown dark clouds ahead for investment in startups and scaleups – more of this in our upcoming edition of The Deal – a far cry from 2015, which saw three of the biggest deals we’ve ever seen.
Oxford University spinout Immunocore secured a £206m equity investment in July. The ‘largest ever financing round by a private life sciences company’ was backed by Woodford Investment Management, Malin Corporation, and Eli Lilly & Co. Immunocore parted with a 45.4% stake, achieving a £454m valuation.
Where is it now
Although the fundraising was relatively recent, Immunocore has since taken further steps toward bringing its product to market.
Talking last month to FierceBiotech, Immunocore Chief Medical Officer Christina Coughlin explained how Immunocore fights cancer using ‘a T cell receptor as the targeting system, instead of an antibody domain’. In dosing the first patient in a Phase I study, the company has ‘taken a small step toward that goal’. The short-term aim is to diagnose the optimal dose, and progress to further studies.
“It could potentially get started later this year”, explained Coughlin, “and that could potentially lead to being in the markets at some point very late in 2018”.
In April 2015, Funding Circle – an online market place for business loans – secured £100m investment from investors including Baillie Gifford, BlackRock, Digital Sky Technologies (DST Global), Sands Capital, and Temasek. Funding Circle parted with a 13.2% equity stake, achieving a £759m valuation.
Where is it now?
Funding Circle’s £100m round in April 2015 elevated the company to unicorn status (a company with a valuation of at least $1bn).
Since then, Funding Circle has ‘dramatically increased its footprint’ with the acquisition of German company Zencap. The acquisition saw Funding Circle expand operations into Germany, Spain, and the Netherlands.
“Our vision is to help millions of businesses across the world sidestep the outdated and inefficient banking system” said Samir Desai, Funding Circle co-founder and CEO, commenting on the acquisition. “By coming together we combine Funding’s Circle’s leading position in the UK and US with Zencap’s deep understanding of local markets to create the first truly global marketplace lending platform”.
Over the weekend, Funding Circle also announced a ‘landmark transaction’ with the arrival of securitisation. Securitisation is the process whereby illiquid financial assets are transformed into marketable securities. Both the European Investment Fund, and KfW – a German government-backed bank – are investing in the securitisation of loans, now available through the platform courtesy of Deutsche Bank.
“By investing in this innovative transaction in cooperation with the EIF, we are convinced we can stimulate SME lending via capital markets in the UK” says Rita Geyermann, head of asset management at KfW.
Durham-based Atom Bank raised £50m in a round led by Spanish banking giant BBVA in November last year. Other backers included Marathon, Polar Capital, Toscafund, and Woodford Investment Management. The digital only retail bank parted with a 73.3% equity at a post-money valuation of £68m.
Where is it now?
Since securing the sizeable sum, Atom Bank has gone on to acquire Grasp – a North of England-based design and development house. The two companies have collaborated in the past on Atom Bank’s digital ‘shop window’.
Earlier this month, Atom Bank officially launched its app for iPhone and iPad. According to reports, the app will require voice and face recognition for login, while machine learning and AI are being incorporated into the bank’s customer service department.
“This is the start of a remarkable transformation of the banking landscape for everyone” says Atom CEO Mark Mullen, former CEO of HSBC owned First Direct. “Atom aims to offer a genuine alternative to the insidious and self-interested banks that dominate the UK. “Our approach will be to constantly evolve and extend our offering, with monthly updates to our app”.
Takeaway delivery service Deliveroo raised £62.8m in November from investors including Accel Partners, Index Ventures, Hummingbird Ventures, DST Global, and Greenoaks Capital Management. The kangaroo-d, black and green army achieved a £375m valuation after parting with 16.7% equity.
Where is it now?
Deliveroo used its November fundraising to expand operations abroad. Commenting at the time of the deal, Will Shu, Deliveroo CEO and co-founder said:
“This is our first foray outside Europe. We’re now very much a global company, and that’s significant”.
Today, the company operates in over 12 countries worldwide and claims the average order takes just 32 minutes. But it’s not all about the big cities, Deliveroo is also increasingly catering for smaller towns such as Leamington Spa.
In other news, Deliveroo follow-on investor Index Ventures received flak after selling shares in competitor JustEat. Uber subsidiary UberEATS will be the latest to join the takeaway delivery fray, with a launch later this quarter. And although Deliveroo continues to grow, the BBC has reported on dissent among its legion of drivers, as rumours abound concerning allegedly unethical new contracts.
London-based pharma startup Mereo BioPharma completed an announced £83.8m fundraising in July with investors Woodford Investment Management and Invesco Perpetual.
Where is it now?
At just over one year old, Mereo Biopharma is definitely the baby of the bunch. Focused on treating ‘rare and speciality diseases’, the company works in close conjunction with ICON, the clinical research organisation.
Mereo’s management team is made up of experienced industry professionals. Dr Denise Scots-Knight, former Managing Partner at healthcare-focussed VC firm Phase4Partners, heads up the team as CEO, while Dr Peter Fellner – previous CEO of Roche UK – is Chairman.
In March, Mereo was granted orphan drug status for its line that aims to treat Osteogenesis imperfecta, more commonly known as ‘brittle bone’ disease.
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