At Beauhurst, we track equity investment into high-growth companies by monitoring various sources online, but also by analysing company filings. This gives us a unique perspective on tracking these investments as we spot fundraisings that haven’t made the press. This week, our Research team have seen filings that indicate two interesting deals that are at the time of writing, unreported, featuring Starling Bank and Tokamak Energy.
A second round for Starling
The filings we have seen indicate that Starling Bank have secured £10 million equity investment. A spokesperson for the company confirmed that an existing investor put in the cash as part of a long standing deal. This is their second round of investment, having completed a £48 million equity deal in January 2016 from angel investors including Harald McPike. This latest deal brings the mobile banking company’s total amount of equity raised to £58 million since the beginning of 2016.
Business Insider’s analysis of documents filed with Companies House showed that Starling’s £48 million backing came in three tranches. Initially McPike only invested £3.15 million at the end of 2015, before a further £14.84 million came in July 2016. Starling had to wait another nine months before receiving the final £30 million of the original investment. Starling confirmed that the investments were staggered in line with the app-only startup passing certain milestones.
The bank are a prime example of a UK based fintech company enjoying a period of powerful growth, thanks to unprecedented levels of investment into this sector. They are fully licensed regulated by the FCA and PRA, and are currently entirely mobile based. This mobile-first movement is integral to the emergence of challenger banks, and central to the wider fintech revolution. Starling is not the only young UK bank, with such rivals as Atom, Monzo, Revolut, OakNorth and Tandem all vying for the same competitive space.
Eighth investment for Tokamak
We have also uncovered filings that indicate an unannounced deal for Tokamak Energy. The Oxford-based scientific development company seem to have received a £15.5 million equity investment, their eighth in total and significantly larger than other previous rounds. A source close to the company would not confirm the funding but gave strong indications that further investment is highly likely in the near future. They previously secured £10 million at the end of 2016, with the highest of their other six deals being £3.92 million. As an Oxford-based company Tokamak is noteworthy, as London has taken the lion’s share of such deals – seeing around half of all unannounced equity deals since 2016.
What do they do?
Tokamak are looking to accelerate the development of fusion energy, with the aim of using fusion neutrons for a variety of applications from material treatments to medical applications and even low cost hydrogen production. They cite a “unique solution” which involves a high-temperature super-conductor known as a tokamak reactor to provide a solution for harnessing the benefits of fusion power. If they are successful, they could potentially unlock an almost limitless source of pollution-free energy.
This commercialisation of nuclear fusion is as innovative as it is bold, but they face steep competition from a growing number of startup companies around the world pursuing the use of nuclear fusion in a similar way. In the US, MIT have recently launched a multi-million dollar collaboration with CFS (Commonwealth Fusion Systems) in an attempt to produce energy from nuclear fusion within the next 15 years.
But this recent investment secured by Tokamak indicates a statement of intent from the Oxford company and implies that they are still aiming for their target to deliver fusion power by 2030.
More unannounced deals than ever
These deals are becoming more prevalent. Our data shows that publicly-announced (or at least, press-featured) deals only accounted for 29% of all deals in 2017. In 2015 and 2016, this figure was 33% and 30% respectively, showing that these under-the radar investments are making up a growing proportion of deals going into companies.