Last year we published a list of tech startups that raised the largest first-round equity investments in 2019, to determine a group of names to watch in 2020. Some of these companies went on to have a stellar 2020, such as ANNA, which sold a majority stake for $21m (at an implied valuation of $110 million) last May.
Similarly, RHEON Labs, which went on to raise a further £4m in follow-on investment, helped tackle the UK’s COVID-19 PPE shortages through 3D printing. Now, it’s time for this year’s instalment.
As we established in The Deal 2020, first-time fundraising activity took a hit during the pandemic. The number of companies raising equity finance for the first time declined 19% from 2019—the biggest year-on-year drop on record. This makes the startups that did take their first step onto the equity ladder last year even more impressive.
1,651 companies raised equity investment for the first time in 2020, including both announced and unannounced deals. And, although our list is sector and location-agnostic this year, 49% of the top raisers were located in London, whilst 56% were technology and IP-based businesses.
We’ve only included companies founded after 2000 and that have raised their first equity investment in 2020. So, without further ado, here is our list of top startups and scaleups to watch throughout 2021.
Total funds raised: £200m
UK unicorn company Gymshark creates a range of sportswear and accessories for men and women, and was already a household name before receiving any equity investment. The Birmingham-based sports apparel company had reached annual sales of £175m with £18.6m in profit before receiving any investment, and had already expanded to the US.
In August 2020, the US growth equity firm General Atlantic bought a 21% stake in Gymshark for a total of £200m. This deal made Gymshark the second British company (other than Checkout.com) to have achieved the £1b status without any prior investment. Gymshark joined the ranks of other UK unicorns, such as Cazoo, Revolut, Monzo, Transferwise, and Deliveroo.
Founded by Benjamin Francis in 2012, today the company has a cult-following across online channels, with over five million followers overall. Gymshark ships to customers in over 130 different countries, and has appeared on a long list of high-growth rankings, such as the Fast Track 100 from 2017-2020, and the LinkedIn Top Startups 2018.
2. City and County Healthcare Group
Total funds raised: £89.7m
City and County Healthcare Group and its subsidiaries provide home healthcare and support services, primarily for the elderly. The majority of its services are commissioned by local authorities and for the NHS, but it also serves private clients. C&C also provides specialist care services for young people and adults with long term conditions such as learning disabilities, mental health needs, and brain injuries.
The deal was unannounced to the public, and the financials are all undisclosed. However, Health Investor wrote that the deal was led by Boston-based private equity firm Summit Partners, a fund that currently manages over $23 billion in assets across technology and healthcare sectors. Health Investor also says that this deal represents an acquisition of C&C, buying the majority share from previous owners Graphite Capital.
C&C Healthcare has been tracked on the Beauhurst platform ever since it underwent a management buy-out in 2013. This was when private equity firm Graphite Capital financed a buy-out of Sovereign Capital Partners. C&C has also made four acquisitions of rival care home companies: Human Support Group, Constance Care, HFH Healthcare, and Spirit Care. The healthcare group now consists of over 20 brands in the care sector.
C&C operates over 65 branches across England, Wales, and Northern Ireland, providing care to over 15,000 individuals a year.
3. Hayfield Homes
Total funds raised: £85m
Hayfield Homes provides property development and housebuilding services. It builds and designs properties specifically for the luxury property and housing market. It was founded in Solihull in 2016 and now has operations all across the Midlands with over 60 active employees
Hayfield Homes secured £85m through a mixture of equity and loan fundraising. £50m was contributed by OakNorth Business, with a further £35m contributed by undisclosed investors. Hayfield Homes expects to build 500 homes per annum over three years using this capital.
The company is partnered with providers such as Bosch, Hammonds, and Porcelanosa, and has won several awards over the years, such as Best Small Housebuilder at both the WhatHouse? and Housebuilder Awards in 2019.
In February 2021, Hayfield struck a £31m deal to build over 80 eco-friendly homes in Bedford. The houses will offer several luxury features, such as electric vehicle charging points, underfloor heating, and top-speed fibre broadband. In total, the company has nine active developments projects under construction at the moment.
Total funds raised: £49.7m
Heroes acquires, operates, and grows SME companies that started as ‘Fulfilment by Amazon’ (FBA) businesses (an ecosystem that generates over £200b per year on Amazon). Heroes specialises in identifying the most promising companies—those with proven business models, financial success, and stellar customer reviews.
Companies can submit their business proposition to Heroes, who will then audit sales information, product costs, and pipeline to assess the total profitability. It then provides a valuation and acquisition offer. This allows an exit opportunity for FBA companies, which are not often targeted through traditional private equity channels. Plus, Heroes is sector agnostic and will consider any FBA candidates.
The young startup secured an impressive £49.7m through a mixture of equity and loan fundraising in October 2020. Fuel Ventures, 360 Capital Partners, and Upper90 contributed to the round, alongside two angel investors: Matt Robinson and Carlos Gonzales, both ex-GoCardless. This is the third-largest announced first-round investment into a seed stage company on record, behind only Proton Partners International and Metro Bank. Both Metro and Proton have now IPO’d.
Heroes has been focussing heavily on advertisement with some recruitment, now employing over 30 people. Moving forward, the company is looking to become Europe’s largest acquirer and operator of Amazon FBA businesses.
Location: Milton Keynes
Total funds raised: £38.8m
Envisics is an augmented reality technology company. Its primary offering is Dynamic Holography technology, which overlays information onto vehicles’ head-up displays (HUDs). The vehicle driver can then see important information on their windscreen in real-time, like navigation, stopping distance, and hazard warnings. It utilises artificial intelligence and advanced mathematical algorithms.
It raised its first-ever equity fundraising in October 2020, which totalled an impressive £38.8m from General Motors Ventures, Hyundai, SAIC Capital, and Van Tuyl Companies. The investors intend to use Envisics’ holographic tech in future vehicle production.
Envisics employs more than 60 people, who are all based in its Milton Keynes office. It is currently working on developing its technology and preparing to scale, as full-scale production is not expected until 2023.
6. Rhino Products
Total funds raised: £36m
Rhino Products develops and manufactures a range of commercial vehicle accessories, such as roof racks, rear door steps, and ladders. Founded in 2003, the company operates out of Ellesmere Port, Cheshire. The van accessory business has grown from a small, local supplier to an international company, with over 130 employees working in Cheshire, Flintshire, The Netherlands, Sweden, and Poland.
The company raised its first-ever equity investment, totalling £36m, from HSBC Commercial Banking and Lloyds Development Capital (LDC). Rhino Products will be using this capital to finance its rapid international growth, or to “supercharge growth”, as CEO Steve Egerton puts it. The investment follows recent financial success, with revenues growing by 60% in the past three years.
Rhino Products’ first equity investment was one of the largest deals of Q4 2020 overall.
Total funds raised: £21.2m
H4 creates software to improve the management and analysis of financial and legal documents. The platform digitizes organisations’ documents, capturing the data as it does so, storing it in a categorised and searchable digital library.
The company was founded in 2016 and has just over 120 employees across London and Macedonia to date. H4 serves many leading global banks, fintechs, law firms, and other financial service providers. This includes two of its shareholders, JP Morgan and Barclays.
The company raised its first equity investment in 2020, which totalled £21.2m from Goldman Sachs Private Capital Investment, Barclays Ventures, Linklaters, and JPMorgan Chase & Co. This capital will help H4 in its mission to disrupt the legal and financial document niche, which J.P. Morgan described as an “industry ripe for change”—with many companies still participating in the time-consuming and costly process of physically marking up documents, scanning them, and storing them on-premises.
8. F&W Networks
Total funds raised: £16.9m
F&W Networks installs telecommunications systems, specialising in fibre and wireless systems, and provides telecommunications utilities and support. F&W works particularly with mid-sized towns and rural areas of the UK, providing advanced telecommunications and full-fibre broadband connectivity. It is working to accelerate the Government’s objective of serving all the UK with fibre broadband by 2025.
This young startup was founded in 2018, is headquartered in Reading, and has raised £16.9m in unannounced fundraising from undisclosed investors. The company offers mobile data, landline VoIP services, and fibre broadband with with speeds of 1Gbps— which is far higher than current residential or commercial offerings. The company currently has around 10 employees.
Total funds raised: £16.5m
Proxymity develops a platform that connects investors and related parties. On the Proxymity platform, shareholders can access electronic proxy votings and meeting notes, minutes, and communications. They can then vote in real-time, which speeds up the process of shareholder proxy voting and reduces the labour required.
Proxymity was originally part of Citigroup’s internal D10X program, but departed in 2020 as a corporate spinout. In May 2020, the company secured £16.5m in equity fundraising in return for a 50% stake. A list of established investors from many countries participated in the round: BNY Mellon, Citigroup, Clearstream, Computershare, Deutsche Bank, HSBC Commercial Banking, JP Morgan Private Bank, and State Street Bank. All of these companies now hold a majority stake in consortium ownership.
Proxymity will use this capital to scale its platform offerings, deliver its services to a wider client base, and to identify and enter more markets internationally.
Total funds raised: £14.9m
Juriba creates enterprise-grade project management software. Its solutions allow businesses to manage their IT infrastructure, helping companies complete IT projects, such as migrations, faster and more efficiently. One example is Juriba’s flagship product Dashworks, which enables organisations to upgrade thousands of users software—such as Microsoft Office and Windows 10—at once, with just one click.
Juriba secured £14.9m in equity fundraising in June 2020. BGF Growth Capital, the most active UK growth fund, was the sole investor in this round. The capital will be used to accelerate product development and finance international expansion. Juriba has since acquired one rival company using the capital, called “AppAvail”, a packaging and testing automation software startup.
The company currently runs operations in both the UK and the US, and will use its new investment to support growth, make further acquisitions and focus on product development in view of increasing market share (in the UK, US, and the rest of the world). The company has just over 60 employees.
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