Behind the Raise with eleXsys Energy

Richard Romanowski is co-founder and Executive Director of eleXsys Energy. eleXsys has developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future.

Tell us about eleXsys and how you came up with the idea?
My co-founder, Dr. Bevan Holcombe, was a senior engineer at an Australian distribution utility with 30 years’ experience and was working on how to decarbonise the local suburban grid.  I was a cleantech angel investor, looking for fabulous ideas.

The biggest issue to local decarbonisation is that the grid was designed as a one way grid. Bevan was trying to find a way to solve this problem, that is, the very limited grid hosting capacity of renewables due to the one-way grid design. He could not find a solution anywhere so in 2012 we decided to team up and started a company now called eleXsys Energy to solve this problem.

eleXsys in simple terms turns the one-way grid into a two-way grid in a cost effective manner enabling a huge increase in local renewables that the grid can host or accommodate in each suburb.

When we started eleXsys, Bevan and I had a vision that discovering a way to turn the one way grid into a two-way grid would be our contribution to saving the Great Barrier Reef by speeding up global distribution grid decarbonisation.

Over the last 9 years eleXsys developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future.

Why did you decide to raise investment?
The co-founders, Bevan and Richard, are the initial high net worth investors.  We invested over $7.5 M USD of our own money.  Then some friends and close associates also invested almost another $4.0 M USD.  We had developed an MVP (Minimal Viable Product) and a few field demonstrations and planned a slow organic and affordable commercialisation, starting in Australia. Then slowly going global as we knew Australia was a few years ahead of the rest of the world in terms of grid hosting capacity problems due to so much rooftop solar we have Down Under.

Then we won the World Energy Council (WEC) global start up award in 2019. When we won the award, the WEC Secretary General at the time (Christoph Frei), challenged us as follows, he said:

“This technology is game changing; you need to think 100 time bigger” …. that is, we need you to help speed up global decarbonisation and fast!

Since 2019 that is what we set out to do, and in that vein, we needed much more investment to speed up commercialisation and go global faster.

What is your top tip for anyone raising investment for the first time?
It’s never easy, the 1st time or the 10th time. Be prepared to spend a large amount of time raising funds and listen and learn from every pitch. If they say no, ask why. Always be raising and expect to pitch to 50 or more before you hit any jackpot.

What attracted investors to your company?
The IKEA flagship project in Australia which helped investors realise how eleXsys can radically speed up global decarbonisation in the local suburbs.  The IKEA project represents a microgrid at up to 10 times bigger than what current Smart Invert technology and grid constraints would allow.  So up to 10 x greater energy savings for the tenant, up to 10 x more rooftop rent for the landlord, plus up to a 10 x larger $ project for the asset owner (e.g. solar and battery power plant) to earn a secure, uncurtailed ROI over 20 years.

My biggest fundraising mistake was…
Not listening at first to potential investors.

Why did you choose to use Angel Investment Network?
A very supportive, understanding, and innovative group with a focus on ESG (Environmental – Social – Governance) investing. We are now raising our Pre IPO round.

What has the funding enabled?
The main focus was fine tuning our global expansion plans through our planned licensing model. Licensing allows us to scale global quickly as opposed to originating, developing, and building microgrid projects ourselves, which would be a very slow and cumbersome process.

Through licensing our vision is that eleXsys becomes the “Intel Inside” of the global local renewables supply chain.  That is, almost everyone is using eleXsys in their local suburban renewables projects to speed up global decarbonisation.

Did you know that filling every roof with solar could generate > 120% of Australia’s total electrical needs? Same should apply across the global sunbelt ≈ 75% of world’s population.

Cannot be done – local distribution grids will not integrate this much distributed energy due to grid physics limitations (curtailment) due to one-way grid design

Grid curtailment of DER (Distributed Energy Resources) begins to occur when the utility hits ≈ 15% of customers with DER, making projects non bankable .eleXsys cost effectively solves this fundamental problem one-way grid problem.

So far, we have one Master Licensee MOU signed and are negotiating with four more. Plus, established a few Alliance Partners licensees within Australia to be the sales channel and EPC of projects.  Some of the Alliance Partners are global multinational using Australia as a test bed eleXsys licensee, with the intention to then become a global licensee.

Plus the funds are being used to enhance our manducating capability along with recruiting more staff to support the faster growth.

Cleantech energy company eleXsys Energy raises £640,000 through AIN

eleXsysEnergy has raised £640,000 through Angel Investment Network, the world’s largest online angel investment platform. eleXsys Energy has developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future. The eleXsys® technology enables large commercial and industrial rooftops to become grid-connected, solar power plants. eleXsys® is the critical enabling technology being installed to build the IKEA eleXsys Microgrid at IKEA Adelaide, which will become 100% powered by renewable generation by 2025.

The raise took four months and was part of a larger £5m funding raise, including a Series A round of  £3.55m, with the funds allowing the business to continue its investment as it rapidly grows its global reach. eleXsys Energy’s innovative technology unlocks the full potential of electricity networks to host multiple times more clean, distributed energy without expensive network infrastructure upgrades. By providing services that enable a two-way flow of electricity on grids, the platform supports the most efficient, low-cost means of delivering clean distributed solar or wind energy.

The company originated in Australia but has now reorganised and is headquartered in London. This is eleXsys Energy’s first raise overseas and marks a significant step for the company.  The company has over 270 customers including 11 industrial rooftops across schools and government, agricultural and commercial buildings. The raise will allow the business to continue to invest in its technology as it rapidly grows its global reach.

According to Richard Romanowski, co-founder and Executive Director, of eleXsys: “We are delighted to have completed a successful round of fundraising with Angel Investment Network. Our technology is critical for the transition to clean energy – one of the world’s most pressing challenges. Funding from investors across the world confirms the transglobal appetite for investment opportunities in new cleantech solutions, aiming to tackle global carbon reduction targets. We are a rapidly growing business and with the capital raised, we will be able to further drive our strategic plans for expansion and deliver on our goals for our new and existing investors.”

According to Sam Louis, Head of Consultancy at Angel Investment Network: “We are excited to be working with eleXsys Energy in this period of significant growth for the company. This raise ensured that eleXsys secured the backing of strategic and experienced investors as they expand their global reach and make their mark on international markets. Our passion-driven investors want to support businesses that solve real problems and there’s arguably few greater problems to solve than how to dramatically scale the move to clean energy.”

News of the raise has been covered in the media both in the UK and internationally including: UKTN, TechLoop Europe , UK Tech Investment News, Growth Business, Eminetra and 24htech Asia

FOCUS ON SUSTAINABILITY

The US Government recently made a headline-grabbing commitment to a 50% reduction in carbon emissions, while the UK committed to an even steeper 78% carbon reduction by 2035. So the question on everyones’ lips is how to achieve this while ensuring economic growth continues? The solution to marrying a low carbon future with answering our continuing energy needs lies in innovation and the ideas of many brilliant startups now seeking funding.

For our latest in depth focus article, Olivia Sibony, CEO of SeedTribe takes a look at sustainability and the development of startups that have the power to help save the planet. Olivia has recently been recruited by the Government to advise on the impact-focused startups we should be encouraging to set up in the UK.  

THE NUMBERS

Size of market
The global Green Technology and Sustainability market size is anticipated to grow from USD 11.2 billion in 2020 to USD 36.6 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 26.6% according to Report Linker 

On the platform
– Renewables became the 11th most popular keyword for searches in the past year, a rise of 37 places compared to 2018. 
– This trend is being replicated by other popular keywords being used at the moment. During the pandemic Greentech became the 13th most popular keyword, up from 47th two years ago.

What is the reason for the soaring interest in sustainable focused startups during the past year?

I think the change really started snowballing in 2019. The mood music had changed on the back of consumer activism and changes to government policy. From Greta Thunburg to the Extinction Rebellion there was a concerted effort to ensure climate change became top of the agenda. It worked. Governments and businesses suddenly started making dramatic commitments to cutting carbon. While it might have been expected that investors would be retreating from these categories in favour of safer investment opportunities during the pandemic, the exciting news was these businesses are actually generating more interest from investors. 

Concerted government policy worldwide is certainly helping, along with increasing grants from the UK Government to stimulate innovation in this space. In order to hit these ambitious targets, innovation will be critical. Investors know this and so are backing the early stage startups with the vision to help governments and business in general hit these ambitious targets. We are also seeing something of a shift in the investor profiles, with some younger millennial investors coming to the fore who have purpose very much as their watchword. For many investors, rather than a ‘nice to have’ having purpose baked into their business plan is becoming a prerequisite for receiving backing.

What are investors saying about sustainability?

Investors are starting to see ESG measurements and reporting being embedded into listed companies and realising that the more they invest in companies that do this from the outset, the better chance they have of succeeding as they scale. It’s important to note that a lot of investors are interested in this segment but struggling to understand it, as there’s a sliding scale of shades of grey in what the “impact” and investment spaces, ranging from profit-first to impact-first. 

Our belief is that there shouldn’t need to be a compromise, so that profit and purpose are perfectly aligned and inextricably intertwined. The key difference is that it’s important to take a long-term view as some of the growth may be slower, but in the long term it’s more sustainable so has a better horizon for long-term profit. So investors are interested in this space but need help understanding the change in growth curve. When investors understand that growing consumer demand (culture), coupled with an increase in regulation (policy, systemic change) are driving this growth, it’s a clear path for investment for anyone looking beyond a three year horizon for their investments.

What innovations are most needed to power sustainability?

The three key areas of focus should be circular economy, carbon-capturing technology and renewable energy. We need a big focus on the entire food and agriculture chain where farming needs to capture carbon, food should be produced as close to home as possible, vertical farming practices are further developed, food surplus becomes minimal and a resource to turn into energy. Where water from agriculture is clean and no longer contaminates our waterbeds. We need to focus on trapping heat emissions from carbon and methane in order to slow down the melting ice caps. The quicker the ice caps melt, the more gases and unknown bacteria and viruses will be released and the harder it will be to reverse. We’ve already seen the impacts of one single lone virus and this should be a good incentive for us to not release unknown ones that have been trapped in our ice caps for millennia and have potential to cause incalculable damage. 

CASE STUDIES

Zoï environmental network uses its technology to treat and monitor wastewater systems, especially cleaning fats from public drains and pipes. Their core product is an environmentally-friendly system which doses special bacteria to the wastewater system and degrades the fat molecules in the system. The system prevents the development of fatbergs in the sewer & wastewater systems, allowing cleaner water to flow through our systems. Check out this Video of them.

Bionat Solutions is a Certified organic solution applied in the waxing process of fruits, with the aim of providing a longer shelf life without using fungicides or artificial products. The novelty is in the circular alternative made from the same agroindustry residues to increase the useful life of fruits.

Biohm is a multi-award-winning research and development led, bio-manufacturing company. The company enables the use of healthy, environmentally friendly, circular materials like food waste and transforms it into building solutions which can apply across the design and construction industries. This eliminates the concept of waste, demonstrating how business can equitably and ethically work in collaboration with the natural world, industry, academia, government and community.


Zero Carbon Farms has developed a data-driven system 70x more productive than traditional farmland. It uses 100% renewable energy, 70% less water and reduces food miles/food waste. Not only is the produce consistent quality, highly nutritious and herbicide-free, it is also hyper-local and year-round, specialising in subterranean farming.

Join Olivia Sibony on Thursday June 3rd in the next AIN ClubHouse ‘Business as a force for good’ session where she will be discussing how startups can pave the way to a zero carbon future for food production.

Five takeouts from our first sessions on ClubHouse

As a communications professional it is imperative to keep abreast of new trends and platforms. ClubHouse is the newest kid on the block, delivering something quite different in today’s social media landscape. Part networking platform/ part radio show/ part events business/part members’ club it has an intriguing proposition. It offers something quite different to other social networking platforms. Namely the ability to have a really informed discussion on topics of interest where your ‘real’ self is exposed, rather than curated.

In a world of anonymous trolls spewing bile from behind keyboards being able to talk with real people on a platform also represents a refreshing change. It is focused on the ‘voice’ and offers an ability to network and debate that we used to have from live events. Remember them? For me personally it has also been a nice change from having to see your own face on a screen during a stilted Zoom conversation. Particularly with hairdressers being closed for so long! The discussions I’ve seen and taken part in so far have been wide ranging: Mental health, building resilience, social media techniques, how to win investment, even the Burning Man festival. 

As an online network connecting hundreds of thousands of people from across the world it also offers a perfect opportunity for us at AIN to bridge distances. Our own channel startup.fm has featured some fascinating discussions so far and I wanted to pick out five great revelations from our guests so far.

  1. True grit separates those who succeed with those who don’t
    In our first conversation we heard from Thomas Vosper, founder of ecommerce startup aisle 3 on how he bounced back from redundancy 13 months ago. He has since led two successful funding rounds with a rapidly growing ecommerce businesses employing 15 staff across several continents. In winning funding and growing his business in the teeth of the pandemic,  he epitomises the character and determination startup founders need. A great revelation we heard that epitomises this was setting his alarm at 3 in the morning to respond to investors in Australia in real time. He is an expert in his field but this sheer level of focus and determination is what sets successful startup founders apart. It’s a tough business and it simply isn’t for the majority of people. Investors know this and character counts.

  2. Being prepared to pivot
    There can simply be no time for rigid thinking in the BETA world of the startup. Accepting things are in transition is a brilliant starting point for throwing off attachments and being ruthless in decision-making. This revelation came from Rav Robert from PharmaSentinel, the healthcare startup leveraging AI to provide personalised medicines data intelligence. He revealed the story of presenting his initial wireframes for his app to a board advisor with relevant experience. The blunt feedback was to ditch the initial idea and return to the drawing board. Rav realised quickly he needed to take this advice on board and adapt. Indeed this was why he had recruited this particular advisor. The result? Having launched its consumer app ‘medsii’ (Medicines information for Me) in October 2020 on the App Store & Playstore. It already has over 15,000 app downloads in 150 countries. The lesson was not be emotionally attached to any one idea and trust the advice of the experts you have brought on board. 

  3.  Don’t be too distracted by investors
    This might seem anathematic for those involved in a fundraise, but this was the loud and clear message from Saalim Chowdhury, former partner at 500 Startups and an angel investor. His strong contention was not to be distracted by the thought of investment rounds. Instead entrepreneurs should have a laser-like focus on winning customers and sales in the early stages and should bootstrap as far as possible. Paradoxically, the best way to impress investors was not being over focused on them. As he succinctly put it ‘Taking investment is as time consuming as setting up a business.’ Dan Simmons, founder of launch accelerator Propelia also thought it was vital to really focus on milestones early on and work with the right investors to help guide this process. His view was that there was a lot of inefficiency in the early stages of fundraising and it was really important for startup founders to be matched with the right investors as ‘co-pilots’. 
  1. Engage your community in your journey 
    This came through so loud and clear from several speakers. Saalim emphasised the benefit of crowdfunding –  not so much for gaining investors but building a community and gaining customers. For Ruari Fairbairns from One Year, No Beer, building a strong tribe and community was vital for the development of his app of alcohol-free evangelists and the direction of travel for the business. It is also easy to forget that investors can also be customers. Indeed he he was able to raise £1.6m of investment from his community. This included many corporate leaders who had taken on his booze-free challenge and seen the benefit in their life and productivity. A brilliant way of building advocacy.
  1. Opposites attract when it comes to co-founders
    Another great misconception is that cash is the reason startups fail. Several guest shared the view that it is the people dynamic that it most critical. While solo founders can succeed a succession of speakers and participants extolled the virtues of having co-founders with complementary skill sets, such as Kathryn Tyler and Nikki Cochrane from Digital Mums who joined us in week one. This was something Thomas also said was the ‘secret sauce’ in his working relationship with his business partner, James Valbuena. For solo-founders the advice was recruiting advisors and mentors who can offer skills you may not have. The message in effect was to acknowledge your weaknesses and rather than try to correct them, find someone who excels in those tasks. 

    We look forward to more great insights and revelations in future weeks of ClubHouse. Please join Adah Parris, Chair of MHFA UK, Olivia Sibony, CEO of SeedTribe and Michael Solomon, Director at Responsible 100, on Clubhouse tomorrow Thursday, 28th April as we discuss, can business be a force for good?https://www.joinclubhouse.com/event/mWreGdga

Toby Hicks, Head of PR, Angel Investment Network

Coffee on Purpose with Liv Sibony

Liv Sibony, CEO of SeedTribe and Head of Impact at Angel Investment, recently spoke on the Coffees on Purpose podcast about how start-ups can marry profit with purpose, what we need to do to support the next generation of start-ups to address the UN’s Sustainable Development Goals (SDGs), and why female entrepreneurs are still underrepresented in this area.

From sharing with us some of the most exciting start-ups in the space, like Pinpoint, who are using big data and hundreds of thousands of blood samples to help detect early signs of cancer, to deconstructing some of the structural imbalances in the current investment space, Liv gives a comprehensive overview of the impact space, and what’s on the horizon. 

Watch the podcast here.

Breaking the cycle – how female-led startups can succeed in 2021

Bumble’s recent IPO generated stellar headlines for making Whitney Wolfe Herd the world’s youngest self-made female billionaire. However it was the exceptionalism of the story that made it so significant. Women make up about half of the global population but account for less than 5% of the world’s 500 biggest fortunes, according to the Bloomberg Billionaires Index. 

In order to have more women at the top of the list there needs to be more investment and encouragement going into early stage startups. The UK has one of the most developed startup ecosystems in the world. Yet it falls down when considering the huge gender imbalance in the startups winning investment. Indeed research from the British Bank shows that for every £1 of Venture Capital investment, all-female founding teams get just 1p.

This matters from both a moral, fairness perspective but also from the end consumer perspective. According to research from Catalyst.Org, 67% of all UK Household consumption is controlled or influenced by women. However their needs are often unmet in a world where so many products and services are brought to market without the input of 50% of the UK. Across the country there are so many entrepreneurial women with brilliant ideas for gaps in the market to improve our lives, but these are likely to remain unfulfilled. The lack of funding opportunities and visible role models makes the ideas more likely to remain in heads. Not least because you can’t be what you can’t see. 

As a result of Covid, the situation has become even more precarious. Firstly investors are more likely to stick with more established businesses, more likely to be male-led. Secondly the bulk of domestic responsibilities (including childcare) tend to fall on women, simply meaning there has been less time and ability for many to focus on the all consuming life of launching a business. Home schooling has been a clear example. In order to shake things up and start to rebalance the situation we should focus on practical measures women can take.

Develop a wide network

Start-up investment has traditionally been a very closed world. Much of it stemmed and often still does from old school ties which tend to be stronger with men. This is then often reinforced throughout our lives. Platforms like Angel Investment Network, SeedTribe and crowdfunding platforms have undoubtedly helped to shake things up by democratising the world of early stage investing but it remains crucial for women to focus on building their own networks. Encouragingly there are a host of forums for women to network and create their own forums. This includes investment groups such as Angel Academe, which trains and empowers women to invest in female-owned start-ups and Ada Ventures which invests in under-represented founders; the Female Founders Forum, set up jointly by Barclays and The Entrepreneur Network (TEN), or more specialised groups such as Hatch’s incubator for first-time female founders and the Mayor of London’s Women in Cleantech group. Once you know groups are out there, you can then focus on the one or ones that are right for you. 

Being bolder in pitches and asks

Some research from Barclays revealed Britain’s female entrepreneurs are less likely than men to ask for business funding to scale up operations. We are also likely to be more timid in pitches. We need to be direct and ask for what we need to get a business the launchpad it needs. In my personal experience investors will buy into the vision and ambition. Remember investors are expecting to be asked for money. Tell them in no uncertain terms the amount you require, what you will do with it and of course, the share they can expect. You will be surprised by how positively your request will land.

Doing your homework on the investor

Switching perspectives so we can understand the right argument to make is one of the best and most simple steps we can do to boost our chances of investment. When I launched my start-up GrubClub I realised the importance and power of understanding different perspectives. I would then adapt my pitch according to the investor I was speaking to. Key to this was really researching each investor, including their background and interests.  This helped me understand the different reasons they might invest. It’s also helpful to ask the investor directly about their prior investments. This isn’t rude. It is a two way street. The investor will conduct Due Diligence on your company and you, and you should also feel comfortable to Due Diligence on them as an investor. However at the same time, it’s important to be flexible and open to other approaches, but never to the detriment of what is fundamental to your company.

Backing other women

In instigating change, we need to be the change we want to see. It’s up to women to support other women in the industry. This is the only way to disrupt an entrenched system. Having launched and sold my own business, I dedicate my time to supporting impactful entrepreneurs to grow in more sustainable ways. My strong conclusion is we need successful women to become investors themselves to shake up the system. If we can encourage more women investors, we will start to see the level of funding increase for female-led startups. This will in turn create a virtuous circle of successful female entrepreneurs who are likely to become female-backing investors themselves.

 However, support doesn’t just include fundraising. It is also about opportunities for offering mentoring or other support. The individual power we all have is far greater than we realise. Let’s be the catalysts for the change we need to transform the prospects for female entrepreneurs.

Olivia Sibony is CEO of SeedTribe and Head of Impact for Angel Investment Network

BEHIND THE RAISE WITH PSYT

In our latest Behind The Raise we caught up with Nick Begley, founder of Psychological Technologies (PSYT) on disrupting the self-help market, peoples’ willingness to invest in their wellbeing and the time and attention needed to execute a successful fundraise.

Tell us about PSYT?

We all want to improve and we usually turn to books, audiobooks and videos. But how much do they actually help us change? 

If we’re honest, not much. That’s because passively digesting information isn’t enough. Reading about how to ride a bike isn’t going to magically allow you to ride a bike, and the same is just as true when it comes to self development. It needs to be put into practice.  

So that’s what we do – take proven content, with proven demand, and deliver it in a more effective format, helping people put advice into practice, to create real change. Like Masterclass, we work with authors to leverage their established brands and fanbases. 

Why did you decide to raise investment? 

To build on the success of our MVP.  Our MVP was based on one book and the funding will allow us to build a multi-book platform which will have multiple courses in one place. 

What is your top tip for anyone raising investment for the first time? 

It takes a great deal of time and attention, so start early. Make sure you have enough runway and try not to be involved in any other big projects at the same time. The process is time consuming, not just the pitching,  but the follow up emails and calls as well. 

What attracted investors to your company?

I think there were 3 things; the previous experience of the team, the results of the MVP and market timing.  I was previously the Head of Research at Headspace, and my cofounder ran the world’s largest research study into day to day happiness out of the LSE. 

Our MVP product, The Anxiety Solution gave great proof points, through user reviews, metrics and Apple App Store endorsement and we had signed a number of fantastic NYT bestselling authors. 

The popularisation of meditation, mental health destigmatisation, and the willingness of millenials and Gen Z to invest in their wellbeing, has led to the market exploding in recent years, giving rise to many 9 and 10 figure company valuations in the space. Although the market is growing rapidly there is still a big gap between learning what to do and actually applying the advice to your life, which is the gap we fill.

My biggest fundraising mistake was…

Trying to run the company at the same time as fundraise. It’s a huge job for one person and takes all your time, don’t think you can be as productive on other things at the same time. 

Why did you choose to use Angel Investment Network? 

AIN was recommended by a friend and they have a huge network. Ed was helpful, proactive and professional and their terms are reasonable.

Surging investor interest in agriculture, fintech and medical startups, finds AIN annual report

Angel Investment Network (AIN) has revealed its latest ‘State of the Angel Investment Nation’ findings. It is based on the data of more than 125,000 UK registered businesses looking for funding and 35,000 UK investors over the course of 2020.

Technology remained the top category of interest for angel investors looking to back businesses in 2020. Meanwhile, finance closed the gap, climbing five places to become the second most popular category for searches. In the year of the pandemic, medical & science climbed two places with a surge in investors backing entrepreneurs focused on improving health outcomes. We also witnessed a huge growth in interest in agriculture which saw a rise of 63% in searches and climbed seven places to become the eighth most searched term.

For entrepreneurs, property is the most popular sector for pitch ideas. Entertainment and leisure is the second, followed by fashion and beauty. This highlights something of a mismatch between the sectors in need of funding and the sectors investors are interested in backing.

AIN has also revealed the UK’s top entrepreneurial hot spots. London’s share of all pitch ideas has fallen slightly, although it remains responsible for 36% of all pitch ideas. The South East is second in the list with the North West number three. Growth in both Wales and Scotland outperformed the rest of the UK seeing a rise in the number of pitches as the startup culture continues to flourish across the UK.
 
According to AIN co-founder Mike Lebus: “It has been an extraordinary year with so many lives and businesses impacted by the virus. However in the face of unprecedented challenges, we have witnessed the resilience and adaptability of UK startups working to bring solutions to the problems of our time. From innovations in finance, technology bringing people together during social distancing to the wonders of medicine and science. It’s no surprise these are the businesses gaining interest and investment from our investors.”

“We are also seeing the nascent development of ag-tech and brilliant technological solutions tackling the very real challenges we face of feeding the population and maximising efficiencies and yields. The challenges of climate change are undimmed and this is a sector that is at the forefront of that battle.”

He continued: “While London has been dominant in the past we are now seeing the comparative growth of other nations and regions in the UK as our embedded startup culture takes further root. We can look forward to a continuing resurgence across the country as we emerge from this difficult period.”

Top 10 Sectors for Pitches:

1.   Property
2.   Entertainment & Leisure
3.   Fashion & Beauty
4.   Technology
5.   Food & Beverage
6.   Software
7.   Retail
8.   Hospitality, Restaurants & Bars
9.   Finance
10.  Business Services

Top 10 Sectors for Investors:

1.   Technology
2.   Finance
3.   Software
4.   Medical & Sciences
5.   Property
6.   Food & Beverage
7.   Energy & Natural Resources
8.   Agriculture
9.   Entertainment & Leisure
10.  Retail

The entrepreneur hotspot list is as follows (based on number of pitches from each region):

1.   London
2.   South East
3.   North West
4.   South West
5.   West Midlands
6.   East Midlands
7.   Scotland
8.   East Anglia
9.   Yorkshire and Humber
10.  Wales
11.  North East
12.  Northern Ireland

To connect with angel investors looking to back your business visit https://www.angelinvestmentnetwork.co.uk/

Sector Focus: EdTech market

“COVID has pulled the transition to digital learning forward by at least 5 years.” These were the words of David Sherwood, CEO and co-founder of EdTech startup BibliU, commenting on the remarkable development of the EdTech market. In our recent look at the data from the platform, it was revealed to be one of the fastest growing sectors for investor interest. Up 56% since the start of the pandemic. AIN’s Sam Louis takes a closer look at the EdTech sector and why it is getting top marks from investors.

THE NUMBERS

Size of Ed Tech market: The global education technology market size is anticipated to reach USD 285.2 billion by 2027 (Source: Grand View Research, Inc. Technology)

Number of companies: 3,250 companies globally according to Crunchbase, with 43% of these located in the USA according to a report from RS Components.

On the platform: Education and Training has steadily climbed the rankings to be the 14th most popular category for angel investors. investor searches have climbed an impressive 56% since the start of the pandemic.

Description
EdTech (a combination of “education” and “technology”) refers to hardware and software designed to enhance teacher-led learning in classrooms and improve students’ education outcomes. It also incorporates the wider sphere of adult education and learning.

WHAT ARE THE REASONS FOR ITS RISE TO PROMINENCE IN THE PAST TWO YEARS?

Necessity
There’s been no shortage of great EdTech companies over the years, but lockdowns and social distancing have changed the game. It has forced the hand of consumers because the usual in-person learning option was no longer available. Necessity is often the mother of change as well as invention.

The reason it’s taken a global pandemic to speed up adoption is that most consumers weren’t prepared to go through the hassle and the teething problems of full implementation of technology in traditional education. This is especially true of academic institutions and businesses and they aren’t unfounded concerns. It takes real time, energy and capital to bring step changes in how you deliver or receive education, and getting it wrong can have a very real cost. Until the potential benefits significantly outperform the current system (and these benefits have to be significant for most learners), the change is a genuine risk.

A new climate for innovation

The impact of the pandemic has been to move the market five years into the future in a matter of months, as outlined by David Sherwood. In time, EdTech solutions would have improved to the point that they provided significant improvements for learners and major adoption would have occurred. Instead the foundations of the existing system have been shaken with learners and educators forced to study remotely. Therefore the tipping point was reached far earlier than anyone anticipated. I think this will be to the benefit of the education system long term. The best educators have been able to take the most valuable parts of the old and blend it with the new, and hopefully retain a more open view on future innovations to improve further.

WHAT CHALLENGES HAs EDTECH NEEDED TO HAVE OVERCOME?

For Individual learners
The challenge with individual learners is user experience, course completion and efficacy. People either struggle to engage with the tool, they struggle to stay motivated, or they don’t see the results they want. In all cases, they drop off. People are very used to traditional learning so this has been a big hurdle to overcome.

For B2B products
For B2B products there needs to be a strong enough case for change that the business commits to the risk. Beyond that, all of the points about individuals also apply.

For Academic institutions
Lastly you have academic institutions. Alongside the hurdles detailed above, they also face additional challenges, such as being influenced by broader regulation or controls. This might include the school board or government. Many EdTech ventures manage to capture a large number of individual teachers but never get the official adoption at school or at national curriculum level. This is where budget allocation and curriculum is dictated and without that stamp of approval, it is hard to secure wider market share. It is a similar challenge to that faced by the medical space. It is both a blessing and a curse. It makes the education sector a tough market to crack, but for those who do and are given the green light, the growth curve from there is very exciting.

Investor Challenges
The pandemic has arguably been a Black Swan event in regard to investment. Institutions have realised the need to adapt and change which has forced educators to engage with these new opportunities. This change in consumer sentiment has been recognised by the investors, which in turn has given them the confidence to realise that startups can find a significant and willing market.

What types of companies are we seeing developing solutions in the EdTech sector?

a) Those digitally enabling existing learning
This has probably been where we’ve seen the biggest change to demand – companies providing technology to enable learning that was already taking place. This has understandably been pandemic-driven growth, with the market responding to a particular crisis, but it’s also one of the areas with the least need to stimulate new consumer behaviours.

This gives it a strong chance of adoption and investors know that, shown by the capital deployed in the past couple of years. For example, BibilU, who digitise print text books and provide them seamlessly across all your devices, had to do an extension to their funding round due to the incredible demand for their product.

People were already at universities, the courses and textbooks were already set, you are just changing one component. They’re enabling an action people are already doing in an easier, cheaper and more effective way. You can see why the pitch resonates.

b) Adult education
There has also been an on-going rise to prominence in digital solutions for adult learning. The pace of change in the world and evolution of job roles has created a need for lifelong learning. Time pressed adult learners are now able to get the same learning, sometimes even better learning, than available to them in traditional face to face institutions. This ranges from post-graduate degrees to language learning to brain training, with a new generation of smart apps able to offer them a tailored pathway.

People like DuoLingo have shown the heights possible with self motivated learners, while Coursera has done the same in the B2B market. Student motivation is still a concern, with course completion rates often low, but in comparison to younger learners, many adults actively engage with the digital structure and find that it opens up a world of opportunity. 

c) Tech to boost efficiency
With increased reporting and accountability, many educators are struggling with the added workload that comes on top of teaching time. There is a lot of work being done on technology to enable teachers to streamline their tasks and work more efficiently, giving them back the time to really focus on the important part, the students. Pango for example is a tool for planning lessons, sharing resources and managing curriculum. Whole schools can share and collaborate on lesson plans, keeping consistency while allowing teachers to design and plan lessons in a fraction of the time.

The past two years has highlighted the difficulties and stress teachers come under and this area is likely to grow strongly. As institutions and governing bodies welcome more digitisation, we will likely see the strongest supporting tools gain significant market share as the industry encourages consistency across teachers.

d) AI and personalised learning systems:
The most exciting and arguably the most controversial is AI and personalised learning. Companies like Atom Learning have developed high-quality, teacher-made content with sophisticated AI driven technology to keep students on individual, optimal learning paths. This can have a transformative impact on pupils’ progression and can arguably help to reduce educational inequalities.

New methods of learning enabled by AI and machine learning have come up against some entrenched thinking in the education system, as it requires teachers to learn new systems. Another challenge in encouraging take up is that some of the gains can be incremental. This has meant it has been difficult to get wholesale buy in, particularly given the initial disruption and new learning required. However attitudes are changing, driven by a new generation of tech native teachers.

We are also seeing the development of new solutions outside of curriculum learning. This includes  championing social education, with startups like Vygo, a SaaS platform, reinventing the conventional social support ecosystem in higher education with their innovative platform and support network.

what are investors saying about this category?

Traction
Unlike nascent markets, EdTech firms can build significant traction and product-market fit at an early stage, even when bootstrapped. We like to see strong uptake and engagement, that they’ve really tested the product or service with consumers and that the feedback has been encouraging. Not just they like the product, but that it delivers real value.

We’ve seen so many fantastic ideas but this shows when someone has really found something that has an impact for educators.

Core or ancillary
– An important consideration is whether they are doing something core or ancillary. Is the solution enabling the student’s core interaction with either a teacher or subject material? While the demand has been very much ‘core’, as the market evolves we are seeing supporting technology, efficiency products and those driving social education really starting to gain momentum and attention.

Passion of the founding team
– The passion, insight and drive of the founding team are key factors determining success in this industry. Despite new consumer willingness, there are still entrenched hurdles to overcome on the growth path within the sector. In B2B enterprise software, just having the best product might be enough to win a significant share of the market, but in education there is a trickier path to navigate and the leadership team is often the determining factor here.

WHAT IS THE UNICORN POTENTIAL VERSUS OTHER SECTORS?

CB Insights expects 2 of the next 50 unicorns to be in the EdTech sector. To build a unicorn you need a large, willing market that’s growing fast, and this is certainly the environment evolving where education meets technology.

With vast numbers of people in education of one form or another, there’s the potential to become a unicorn while staying within just one country’s market. This isn’t the case for every sector and so when you then consider the global opportunity, things get really exciting. Many of these technologies have both real scalability and the market opportunity for significant size, so we may see EdTech start to make up more than just 4% of the new unicorns as time goes on.

CASE STUDIES

BibliU is a digital education platform that provides students with digital access to their textbooks and libraries across all their devices.

Founded in 2014, the company now has over 100 university customers including Oxford, Imperial, University of Phoenix and Coventry University. The company has digitised content from more than 2,000 publishers including: Pearson, McGraw-Hill, Oxford University Press. The content is licensed directly to universities, who can then provide access to students and include the costs in their existing tuition fees.

HyperionDev is an edtech startup that is dedicated to closing the global tech skills gap. The company achieves this by integrating human mentorship and code review into the world’s leading tech education brands. The company integrates quality and affordable review of developers and aspiring coders using the top 0.6% of African tech talent. It has been backed by Facebook, Google, Python and the University of Cambridge.

Vygo offers personalised support services beyond the physical campus. The business already works with a third of Australian Universities and is rapidly growing in the UK. The Vygo platform gives every learner a social education community filled with their peers, mentors, tutors, advisors and other supporters

Predictions for impact investing in 2021

AIN’s Head of Impact and CEO of SeedTribe, Olivia Sibony peers into her crystal ball for 2021 to see what it has in store for the impact investment space.

With the huge focus on the pandemic over the past year – many might have thought impact investing was on the back burner. Luckily this didn’t prove to be the case. In the teeth of the first lockdown on the Angel Investment Network platform we saw renewables become the 11th most popular keyword for searches, a rise of 34 places compared to 2018. We also saw terms like Greentech rocket up the rankings for investors looking to invest. So looking ahead, what can we expect? Here are three predictions.

A rise in interest in impact-focused startups


In 2021 we can expect more investors to back impact-focused startups. We have witnessed a new regime take office in the White House rejoining the Paris climate agreement, committed to net zero emissions. Part of a rapidly growing movement worldwide. More consumers are voting with their wallets in demanding brands’ values are in line with their own. Additionally more investors are wanting to see the ethical credentials of businesses they are considering backing. This is particularly the case with passion-driven angels. This virtuous circle means we will in turn help to inspire a new generation of entrepreneurs focused on the solutions to mankinds’ most pressing problems. We are also seeing the huge financial rewards for companies focused on ESG goals. Elon Musk becoming the richest man in the world was a watershed moment in this regard. It can be extremely profitable to embed purpose into your business model.

The establishment of more metrics for the measurement of ESG

Impact-driven investors are looking for more established measurement of environmental and social performance to give them more understanding of where and why to invest. We saw a real landmark moment at the end of the year with the big four accounting firms agreeing a reporting framework last year for ESG standards. We will see this more widely used and taken up in 2021. At SeedTribe we use the UN Sustainability Goals (SDGs) as the basis for our framework for the companies we back and for how entrepreneurs can benchmark their progress. The SDGs are the closest we have to a standard for ESG ratings. The 17 SDGs and their 169 associated targets are by no means perfect, but they are the best blueprint available to achieve a more sustainable future. They have been agreed by all countries.

What I am seeing on the ground is more demand for startups considering the full impact or end to end life cycle of a product or service. For example it is not enough to merely produce solar panels if they are not produced in a way that is in itself carbon-efficient or end up unrecyclable. Better still of course, is seeing start-ups embrace a truly Circular Economy. We need to ideally create close-loop cycles without any waste at all. A start up like Aeropowder is a great example of that. They have created the world’s first sustainable thermal packaging made from feathers – Pluumo. The poultry industry is drowning in feathers (3.1m tonnes per year in the EU alone) and has limited disposal options. Powered by feathers, Pluumo can keep food deliveries chilled while replacing expanded polystyrene. They are gaining huge interest from investors. 

Increasing cross-border collaboration


One silver lining from covid is the increasing level of cross-border collaboration using technology tools. In 2021 with most travel on hold for the foreseeable future, we are likely to see the further rolling out of systems enabling start ups to collaborate and share best practice and insights. For example, WeFarm is the world’s largest farmer-to-farmer digital network. They enable farmers worldwide to SMS any farm related question to a network of other farmers who can help, enabling farmers in Colombia to learn from farmers in the Congo. These sorts of initiatives can improve efficiency, best practice and help reduce CO2 emissions. This is being led by startups but will trickle up to larger firms with enormous data pools being harnessed to create actionable insights to reduce CO2 emissions. 

As we look to the future we can be confident in the vision of startup entrepreneurs and enlightened investors to help drive the change we want to see in the world in 2021.  

#Behindtheraise with aisle 3

We spoke to aisle 3 co-founder and CEO Thomas J. Vosper about his business revolutionising the online shopping experience. He talks to us about bouncing back from redundancy, what he learnt from pitching to investors and his passion for ensuring we have #nomoretabs.

Tell us about aisle 3?
Like most people I find it super easy to find a car insurance provider, book a hotel in seconds or find availability on a flight based on what matters to me. So why is it so hard to find out all of my buying options for a set of wireless headphones? I am not alone in having to open endless tabs across multiple retailers and marketplaces when I shop online.

At aisle 3 we are building a brand and destination site so that shoppers can see all of the relevant product information, price and availability all on one screen. We are obsessed with a #nomoretabs experience that works for both shoppers and retailers.

Right now on aisle-3.co, shoppers can discover colour and size variations on one page for our launch products – trainers. We are actively looking for new commercial and investment partners to increase our offer.

What is your background?
I’ve been fascinated by ecommerce and both the shopper experience and the retailer relationship since I started as part of a small team in Amazon’s nascent UK marketplace in 2007. It’s crazy to remember that there was about a dozen of us occupying half of the 5th floor of a Slough office block!  I was lucky to launch thousands of merchants across the full range of categories and products over 6 years.

After learning a very different corporate experience at Tesco for a couple of years I joined a price comparison start up and grew its retailers from 6 to 45,000 in three years before it unfortunately went into administration.

I’ve spent the last 14 years trying to understand and support both sides of the purchase journey. I’m obsessed with learning more about how I can support shoppers whilst delivering value and growth to help retailers in the face of ever increasing commercial challenges.

How did the idea for the business come about?
My ecommerce baptism at Amazon fanned the flames of my shopper obsession but having worked with thousands of retailers and brands I’ve become increasingly aware that there is a struggle on the other side of the purchase journey. 

Showing shoppers all of their buying options needs to work in parallel with supporting retailers and brands.  

Finding myself unexpectedly redundant a couple of weeks before lockdown was the forceful kick that (thankfully with some amazing co-founders support) was needed to look at how we could tackle a fragmented online shopping experience.

We looked at the current price comparison incumbents as well as Amazon and Google and were staggered that no-one was able to aggregate information that means we would see all of our buying options on one tab. Given the resource and scale of some of these businesses we wanted to stretch ourselves to see if we could take on the technical challenge of #nomoretabs that no-one else has solved.*

*12 days after our pre-seed round we deployed our own three algorithms that means you can now see all the sizes and colours of a particular trainer.

How have you overcome challenges during COVID?
Our entire business has been built throughout lockdown which has meant we have had to work hard to hire and adopt a new company culture without ever meeting each other.

The shift to remote working has made it much easier for us to find talent to join the team from across the world, however this has impacted us in other ways that we didn’t consider in the midst of our own personal bubble of a global pandemic. 

Outside of the disruption of Covid our team has been affected by Floods (India), Government disruption (Belarus), political tension (Armenia), Black Lives Matter riots (USA) which highlights the challenges of a diverse international team.

We’ve tackled a lot of this by working very transparently, putting trust in each other to hit clearly defined goals whilst making sure that we have a growth mindset that encourages constant feedback loops and support. We shot through the free tier of Slack in just a few weeks!

What would you say to others who have faced redundancy during this difficult time?
We’re all in this together. It is very easy to reach out to friends, family, professional networks across calls, WhatsApp, LinkedIn, etc. and my experience is that people are actively looking to support anyone in a difficult position financially or emotionally.

I’m also personally very wary of perceived success on social media. I’ve been very proud of the grit the team and I have shown and our achievements this year but I’m not satisfied that I’ve made anything yet. Personally and with aisle 3, we are still at the very start of a journey that started in challenging times amongst an incredibly specific set of circumstances.

For every story of someone building a business on a credit card there are 99 that fail. What really motivated me was the outreach of support when I was openly discussing my personal challenge (no job) and the ambition I had to create a company that could impact every Shopper on the planet (aisle 3).

I’d encourage anyone who has been made redundant to reach out to their network and ask for support. It might just be that someone suggests something that you hadn’t considered and from difficult circumstances comes your next big personal development.

Why did you decide to raise investment?
In March I was made redundant and wondered how I was going to settle the credit card bill for my hotel in a month that I wasn’t going to be paid!

My personal financial circumstances were not prepared for a new business, even if I knew that my career and personal development had been leading up to this moment. 

I took out a £25k Virgin Start Up loan to get aisle 3 started but we knew that bringing in smart investors from a diverse background would elevate the business and we could relentlessly focus on growing a world-class consumer offering in a massive market.

I’m a big believer that we are better working together and knew, however capable the team was, that we couldn’t take on such a technical growth challenge alone. Our investors help us make the right commercial decisions whilst providing the financial support to build a shopper obsessed product that no-one else has mastered.

What are your top tips for anyone raising investment for the first time?
Even if you feel very clear on your mission and execution I’d recommend drawing up a list of ideal investors and then flip the order so you are saving the most relevant till later. You have to practice your pitch so that it evolves naturally. I remember the pride we felt with the version of our deck but cringe now at some of those early conversations as we found our feet.

Make sure that you can explain enough of your business to friends and family so they can get a general snapshot of your business and what you need the cash for. If you can’t do that you might find you struggle with the elevator pitch to potential investors.

The questions that caught me out, certainly at the start of my journey, were the simple ones that I expected an investor to know and made me doubt my own answer. I sometimes found that the savvy investors would often ask quite a direct and/or simple question to see how you react and answer rather than to hear the details.

If you don’t know the answer don’t try and talk around it. One of my proudest achievements in our business is that we have been able to surround ourselves with colleagues, advisors and investors that complete our knowledge gaps. Investing is a two-way partnership and perhaps the answer to a question from an investor is ‘what would you do and how can you support?’.

What attracted investors to your company?
Investors understood the problems aisle 3 is trying to solve and they related to their own shopper journey – especially when I was able to walk them through the competitive landscape and how we had already exceeded the current incumbents. I think, as shoppers, we are too accepting of the status quo and the need to open multiple tabs on your browser even though hotels, car insurance or flights are easy to compare.

Whatever the type of product and size of purchases the investors I spoke with all shared their personal stories of difficult online shopping experiences – from struggling to find the best deals on Google, to an uninspiring functional Amazon experience or broken comparison-shopping sites that they’d stumbled across.

It increased our conviction knowing just how much our mission can change the landscape of online shopping both for shoppers and for the retailers that struggle to convert to sales on the other side of this broken experience.

I already knew we were fixing a big problem but when investors tell me that we could be creating a unicorn business here in the UK, during a global pandemic, I feel incredibly inspired to push the business even harder and solve problems. 

My biggest fundraising mistake was…
I’ve made lots of mistakes! The hardest questions are often the simplest and I cringe a little thinking about an early conversation with a VC that asked quite directly what my role in the business was. That was probably one of the easiest questions to answer and I could have picked any five of the spinning plates that I manage and have delivered results in but I turned into a waffling mess! I’d spent so long prepping the intricate details of the technical challenge that I was ready to answer any question other than then ones I had assumed the investor would know.

The lesson for me, was that you can prepare all of the details, but don’t forget your value, what motivates you and how you drive the business forward. It’s not about trying to learn everything to fill the gaps in your expertise or responsibility – that’s what I have an expert team for and the sum is greater than the individual parts.

I have also learnt to better read the signs after spending far too long entertaining conversations that I see now were never going to bring investment. I found it very difficult to push hard for a ‘no’ and walk away at the right time when all the signs were there that we weren’t a good fit for each other. Thankfully, we have ended up with a cohort of smart investors who care about our mission and have been incredibly helpful in assisting the team and I. 

Why did you choose to use Angel Investment Network?
Whilst we had a great pool of industry experts from over the years, we knew that reaching out to external investors would help validate our business ambition and the capability of the team without the personal validation. 

We’d looked at a number of different options and thought that AIN was a platform that would help us clearly demonstrate our ambitious, unlock conversations to new, smart investors and would also provide a good central location for investors to point to when sharing our details. 

We decided to launch with the homepage feature on Tuesday, by Sunday had issued docs to the interested investors and closed the round the following Friday on target.

Sector focus: Medtech market

This is the first of our new series focusing on sectors gaining interest and investment from angel investors. You can see my review here to get more details. This month we take a look at the rapidly growing medtech market. This is a sector that has been thrust into the spotlight this year due to COVID and a worldwide focus on healthcare. More startups than ever are winning investment and developing solutions to mankind’s most serious problems. In fact it has seen the fastest growth in keyword searches from our investor database. AIN’s Ed Stephens takes a deeper look.

Size of MedTech market
The total global medical technology industry is estimated to be £457bn (Statista)

Number of companies
32,000 medical technology companies in Europe – 95% of which are SMEs.

Description
Medical technologies are products, services or solutions used to save and improve people’s lives. Startups in the sector have products and services to help with prevention, diagnosis and cure.

The three main categories of medical technologies are:
Medical devices (MDs)
Products, services or solutions that prevent, diagnose, monitor, treat and care for human beings by physical means.
In vitro diagnostics (IVDs)
Non-invasive tests to determine the status of one’s health and diagnose illnesses.
Digital health
The new suite of tools as well as services, using information and communication technologies (ICTs) to improve prevention, diagnosis, treatment, monitoring and management of health, both physical and mental and lifestyle.

On the platform
In the past year, searches for biotech on the AIN platform have increased by 97%.
Meanwhile searches for Healthcare/ health have rocketed by 86%.

What are the reasons for its huge success in the past year?

There are three key factors worth examining:

  1. The impact of the pandemic
    Firstly and most obviously, the worldwide pandemic has meant health has been pushed front and centre of people’s minds. When we think of our own well being, we now think of it in a broader sense. The pandemic has also been particularly problematic for those with underlying health conditions, raising a universal awareness of our own personal resilience, immunity and wellness. The pandemic has made us question medical regulation and legislature in a race to develop a vaccine and drugs to treat it. However, it has also made us think more about our general health with a renewed focus on the mental health fallout from months under lockdown. This topic is now a key part of the national conversation too and thus a ‘holistic’ look at health, it’s maintenance and/or deterioration.
  1. The explosion of big data
    This has also been coupled with a rapid and continuous explosion of big data and patient datasets which has of course been a  game changer for healthcare/medtech, particularly in the field of preventative medicine. We now know if we are theoretically able to get our hands on a big enough and robust enough data set for a given illness, we can make significant steps towards diagnosing it more effectively (with the caveat that our understanding of the causes isn’t too siloed). By looking at the data of millions of people worldwide with a similar risk profile we can predict someone’s likely susceptibility to that particular disease and develop treatments and solutions that may even be personalised to their demographic or patient profile. Which is another step towards the holy grail of personalised preventative medicine.
  1. Agile startups
    Agile startups are of course helping to drive this market forward, pushing innovation and continually getting the bureaucracies in healthcare to ask if there are new ways of doing things. It has been heartening to see the increased level of interest shown by the NHS in innovation. Their clinical entrepreneurship programme goes from strength to strength and there is talk of a £5m fund to support seedstage medtech companies. In the past routes to market were cumbersome and often controlled by large medtech/pharma companies. 

A draw for these startup founders and their investors is the ‘mission’. Clearly there are few greater missions than solving complex healthcare issues. Also embedded within medtech is the idea of global scalability due to the universal nature of human fragility, meaning the rewards for success are considerable. Naturally a continued dialogue needs to be maintained to ensure progress doesn’t come at the expense of ethics but the future’s looking bright in this country for healthcare. We face a unique set of pressures through socialised healthcare that create an environment ripe for technology export.

What types of companies are we seeing developing solutions in this sector?

Key players in the sector focus on either ‘longevity’ solutions, technologies that improve health, nutrition and ‘healthspan’ or solutions to medical diagnosis and downstream disease prevention or cure. Diagnostics companies are being well received on the AIN platform and Onsite health and mental health platforms are also in demand, businesses that typically have a B2B component. With models like this it seems the discussion around physical and mental health is inching ever closer. I haven’t seen anything that has a clear grasp on this yet but there are some interesting recombinations of datasets to explore this. The issue you have in a capitalist environment is companies can often compete in siloes e.g. one company to collect DNA data, one to collect blood samples, another to collect stool samples and the final one to collect patient mental health records. Unless the patient has access to all of these services and has a willingness to allow all the organisations to freely integrate and share data then building up a cohesive picture will remain evasive. One might say we are still in ‘investigatory mode’.

What are investors saying about this as a category?

It excites them but they are naturally wary as it is that much more involved and really does require a degree of specialism that other market sectors don’t. In a winner takes all market you have to be more aware of the competition and the market forces and regulation at play.  It has gone from lab based discoveries, pharmaceutical and surgical instruments into the realm of technology, data and AI. As a sector it is enmeshed with the future. This really is the most exciting element for anyone to be involved with – curing mankind’s most fundamental weaknesses. 2020 has brought home our susceptibility and weakness to disease despite our unparalleled technological ascendency. Medical companies battling to come up with vaccines or provide drugs for treatment have become household names. 

What are the fundamentals you look for in a med tech business?

The team seems to remain one of the most crucial elements. Investors will look to back the best in a field. Experts ultimately form an essential part of the social proofing of a business and their knowledge is and remains a huge component of the diligence that needs to be undertaken. You need to be able to trust in their domain expertise and real world experience of the problems they are solving. You also ideally want the business to be close to commercialisation – and to have gone through regulatory approval, which is a big barrier to realising potential. Typically early stage medtech investments will carry higher valuations due to the team strength, IP developed and often the value of non-dilutive R&D grants taken on. 

case studies


Occuity

Disease screening and diagnostics startup Occuity recently raised £1m and generated huge interest from investors. Occuity’s meters work by shining light into the eye and analysing the return signal. This enables chronic health conditions such as diabetes and Alzheimer’s Disease to be monitored. With hundreds of millions worldwide suffering from diabetes this has huge potential. Crucially in today’s world it can also be delivered at a social distance.

PinPoint


Another hugely exciting company who raised on the platform in the past year is PinPoint. PinPoint has developed a Test that uses AI/Machine Learning to rapidly ‘rule out’ cancer from a simple blood sample, and may be used for all cancer types. The potential for the business is simply enormous. Founder Giles Tully pointed out at the time that PinPoint had already achieved nearly 25% rule out, which in 2019 would have given over 500,000 patients peace of mind in a few days instead of worrying for a few weeks and saved the NHS over £150m.

Hexarad


Another company aiming to support the NHS with a different model is Hexarad. This doctor founded company helps support the severely under resourced radiology sector with access to a mobile team of fully accredited UK NHS consultants. 

From redundancy to start up success: aisle 3 raises £200,000 with support from AIN

The founders of ecommerce startup aisle 3 have bounced back after being made redundant at the start of the pandemic to successfully raise £200,000 for their new ecommerce venture, supported by Angel Investment Network.

aisle 3 is a new marketplace providing choice and control for shoppers across the globe, who are able to select from 600 retailers on the platform. By deploying Machine Learning and AI algorithms, they aggregate retailer offers and rich product information so shoppers are presented with all of their buying options on a single screen. It took the business three months to raise the funds after two thirds of the founding team were made redundant at the start of the first lockdown and created the new business. You can find the best ecommerce business broker from here!

Founded in March, aisle 3 gives shoppers the complete view of all of their buying options so that they can make purchase decisions based on their personal values such as price, delivery, locality, sustainability or brand loyalty.  The team has developed their proprietary web crawler, feed processor, laravel site, serverless infrastructure and multiple product aggregation algorithms from scratch. The funds at this stage are primarily directed towards advancing the brand’s product and tech build.

The founding team of Thomas J. Vosper, James Valbuena and Justin Thomas have 30+ years of collective ecommerce experience at some of the biggest names including– Amazon, Tesco, Lastminute, VASHI. In a short space of time they have grown to serve 2,000 organic shoppers each day, 600 signed retailers, and 20 Digital Agencies with more than a million products and 3 launch categories – Trainers, Toys and Baby products rolling out over the next few weeks.

According to co-founder Thomas J. Vosper: “We’re obsessed with shoppers getting their best deal – whatever that means to them. We’ll achieve this by solving two fundamental issues in online shopping. Firstly, we want to give shoppers the complete view of all of their buying options so that they can make purchase decisions based on their values. Secondly, we’ll make it easier for shoppers to find new products whilst, in parallel, leveraging our two-sided marketplace to act as a conversion enabler to close the gap between shoppers and retailers with significant revenue upside and ability to scale.”

He continued: “Like so many others, I faced adversity in the pandemic. However being made redundant gave me the chance to realise my ambition to create my own business taking the learnings from 14 years in online retail and support of an incredible network of industry advisors and investors to create something better. We are delighted that investors on the Angel Investment Network platform bought into our vision and I hope our success will inspire others to think there is light at the end of the tunnel during tough times.”

Silicon Roundabout’s Mustafa Shreet on connecting startups with tech talent

In the latest Startup Microdose podcast AIN’s Global Head of Brokerage Edward Stephens chats to Silicon Roundabout’s Head of Community Mustafa Shreet. Silicon Roundabout is the leading UK community connecting startups with tech talent.

The Silicon Roundabout team are developers themselves and have attracted some of the UK’s best technologists to build their community. They have already helped the likes of Monzo and Treatwell find new employees.

Shreet discusses Silicon Roundabout’s journey over the past ten years. What started as a tech community meet up for developers to discuss opportunities, has grown to now have a community of 15,000 people. As well as matching startups with the right talent to help them survive and thrive, they host hackathons, Tech Talks and a variety of different events. 

Shreet says: “Silicon Roundabout is a community. It’s not just connecting startups with people, it’s about connecting them with the community.” 

Shreet discusses the fact a lot of startups have traditionally had bad experience with traditional recruiters and so are turned off by the whole process. He says: “Many developers have negative feelings toward recruiters. Most recruiters don’t have the specialist knowledge.” 

Shreet lays out a lot of the things that are going wrong. He says: “The challenge for startups is how to translate on paper what you are doing and ensure it appeals to developers. And decide who to approach.”

Angel Investment Network is partnering with Silicon Roundabout to help connect our community of startups find the talent you need. You can find out more at the interim landing page

Startup Microdose is one of the country’s leading startup business podcasts. It is hosted by Ed Stephens and Electric car subscription company Elmo co-founder Oliver Jones. It features conversations with people startups can learn from with guests are at the forefront of their fields with practical wisdom to impart on entrepreneurship and beyond. Check out the interview below.

#Behindtheraise with Occuity

We spoke to Occuity founder and CEO Dan Daly about his revolutionary new device diagnosing chronic health conditions via a patient’s eye, building a winning team and top tips in securing funding from angel investors.

Tell us about Occuity?

Currently, the diagnosis and monitoring of many chronic health conditions is inadequate, leading to people suffering when they don’t need to or even shortening their life expectancy. 

Occuity’s mission is to improve this damaging situation through the development of cutting edge technology and production of a range of devices that will enable the non-invasive measurement of these conditions. Our devices simply shine light into the eye and detect changes and markers that indicate the person’s health. The first of the many  devices in our development pipeline which will utilise our proprietary technology, is a hand held optical non-contacting pachymeter.

What is your background?

I have always been interested optics and lasers. I started out as a physicist, specialising in micro-optics (very, very small lenses) and measurements using light. It was fascinating how you could see down to the micron level with the right system. However, as I progressed, I moved away from doing the science and became more involved in the commercial side and actually applying these technologies to the real world. It was therefore an obvious next step to combine the two and form a company that utilised the powerful potential of optical measurements.

How did the idea for the device come about?

It started by thinking about what measurements you can do with light. Then a desire to make measurements that were worthwhile, and would make a difference. This led to the interest in healthcare. Building on this, I started to think about situations where people are required to make many, regular measurements. Diabetes is  the obvious example. Clearly doing this in a way that  is pain free and non-invasive would be a major advantage.


How did you recruit the team?

We have a great team with a huge amount of medical and engineering knowledge, experience and brain power. Having worked in this sector for a number of years, many of the team have worked together in the past. Most of our newer team members have come via personal contacts and recommendations, whilst some have even joined us after hearing about our plans through our website. We’re still growing and it’s exciting to see the team develop, but as our growth increases, it’s important we utilise the right channels to make sure we’re able to recruit the best talent, whether this is directly or through specialists agencies.  

How have you overcome challenges during COVID?
We were relatively fortunate that when COVID hit, we were a still a nimble start up and  a lot of the engineering was still at the “developed in a garage” stage. This meant we were able to (literally) go back into the garage during lockdown and continue the development unabated.

We are also in the fortuitous position that as our measurements are non-contacting, they are much safer than the existing devices we are seeking to replace, as these devices must physically contact the patient or draw their blood. There is definitely a mood in the healthcare sector that the more you can do remotely, the better. The risk of spreading infections, causing accidental harm or pain is completely removed by our non-contacting devices, which is great news for both the patient and the clinician.

Why did you decide to raise investment?
Due to the length of time it takes to run clinical trials and obtain regulatory approval, medical devices are very expensive to develop and of course you can’t sell them to generate revenues until you’ve successfully completed the regulatory process. 

It was therefore necessary for us to raise funds and  we will  undertake further funding rounds before we get to market.

What are your top tips for anyone raising investment for the first time?
Firstly, don’t push the valuation too high initially. Leave some headroom for future rounds so that those coming in later have a reason to invest.

Secondly, look for investors who bring more than just cash. It can be contacts, market experience or whatever, but once they are championing your company, it adds significant value.

What attracted investors to your company?
It was definitely a combination of factors. A large part of the attraction is the upside potential of Occuity. We have a proprietary technology, protected by nine patents, and an expert team developing products which deliver clear solutions to large and growing markets. The opportunity is tremendous.

Take the glucose monitoring market as an example. This market alone is now worth over $14bn, and that is based on people sticking needles into themselves. It’s widely predicted that the first company with a non-invasive solution will take a large share of that very valuable market.

But the attraction is also the chance to be involved in something that’s doing good and significantly improving the quality of life for hundreds of millions of people.

My biggest fundraising mistake was…
Timing. It always takes longer than you think to run a fundraising campaign and with COVID and lockdown layered on top, we should in hindsight have started earlier.

Why did you choose to use Angel Investment Network?

It is the breadth and experience of the network that adds so much value. Most networks are regional and so draw on a limited pool of angels. The AIN is global and as such we were able to raise funds internationally from people who offer distribution support in countries where we would otherwise have no links. In addition, the team are great to work with and we trusted that they could help us succeed, and they did.

Angel Investment Network reports impressive annual growth

Angel Investment Network (AIN), has announced impressive annual growth, with annual revenues up 5% year on year and the last quarter seeing revenues increasing by 14%.

We now have more than 1.4 million users in total on the platform. In the past twelve months we’ve overseen a record 192,000 new registrations from entrepreneurs. The figure has almost tripled in the past five years with new entrepreneurial hotspots developing across the globe. Encouragingly for the businesses on the platform there is also more investor activity than ever with a record number of connections made despite the unfortunate circumstances this year.

Despite the pandemic, there has been impressive growth across Europe, with Germany seeing a 40% increase in revenue, the Netherlands up 130% and France up 27%. The USA has also seen a rise of 27%. Our performance has received plaudits from several media outlets, being covered by Techround, Growth Business UK, Bdaily, Business Mondays and Angel News.

Alongside the online platform, AIN also runs a successful broking division. Despite the challenging conditions it has seen impressive revenues year on year, despite longer funding rounds in today’s climate. AIN has been involved in several significant high profile raises in the past 12 months for a variety of businesses, including edtech startup BibliU, digital addressing startup OKHi and YouTube karaoke channel Sing King. 

Despite the backdrop of the global recession and pandemic, AIN’s results reveal the embedded startup culture both in the UK and internationally. They also highlight the enduring popularity of passion-driven angel investors as a source of early stage funding.

According to AIN co-founder Mike Lebus: “2020 has been a time of unprecedented turbulence for the startup world, as it has for general society. Despite the challenges, we continue to see record numbers of startups look for funding on our platform and angels willing to invest. The solutions to so many of the problems we face are in the minds of startup founders and we are proud of the work we are able to do to help them fund their ambitions.”

He continues: “We continue to see strong international growth with startup communities developing throughout the world. We now have 40 networks extending to 90 different countries. We are also building new partnerships with accelerators and continue to offer tailored offerings in the property sector with BrickTribe and impact investment with SeedTribe.”

Digital Addressing startup OKHi raises £1.4M with support from AIN

OkHi, a Kenyan/UK startup addressing system for emerging markets, has raised more than £1.4M, supported by Angel Investment Network, the world’s largest online angel investment platform. 

Headquartered in Nairobi and registered in London, OkHi is solving a problem that affects 4 billion people and costs businesses billions every year. The company was co-founded in 2014 by Timbo Drayson, who was at Google for 7 years, where he led the launch of Google Maps across emerging markets and built Chromecast. OkHi’s pioneering technology enables any business to collect an accurate address from their customer, verify it and navigate to it without getting lost. Its primary focus is to solve address verification for financial services, an endemic problem that holds back financial inclusion across emerging markets.  

The story has been getting widespread media coverage in the tech media press in the UK including titles like UKTN, Techround, UK Tech Investment News and Growth Business. It has also been picked up in African media including Disrupt Africa, Tech In Africa and VentureBurn.

Backed by the co-founder of Airbnb Nate Blecharczyk and chairman of Twitter Patrick Pichette, OkHi has powered millions of uses of its addressing system. The company recently launched in Nigeria with Africa’s largest banking platform, Interswitch Group, to solve address verification in Nigeria and beyond. The round took only two months to complete. OKHi is now deploying this investment to double the team’s size, win the  Nigeria market and grow the business beyond Africa. With scalable products solving a global problem, OKHi is on a clear trajectory to Series A.  

According to Timbo Drayson, “A physical address should be a human right. Whether it’s opening up a bank account or getting an ambulance to your door, every person on this planet deserves access to these services. This raise is a vital stepping stone to unlock our growth into Nigeria as well as explore new markets across Africa, Middle East and Asia. The Angel Investment Network was instrumental in our fundraising success and has really helped us on our Mission to enable half the world without a physical address to “be included.” 

According to Ed Stephens, who led the raise for Angel Investment Network: “This start up really ticked so many boxes for our investors who really bought into the company’s vital Mission. We were inundated with interest with more than 180 inquiries on the table. OKHi’s digital infrastructure helps to answer a genuine need for people without a formal address to get access to services that can help transform their lives. The team’s credentials were impeccable in their experience as entrepreneurs and addressing so we look forward to seeing the huge success of this company as it grows to help millions of people across the globe get better access to services.” 

#BehindtheRaise with BorrowMyDoggy

We spoke to BorrowMyDoggy founder Rikke Rosenlund about disrupting the dog-sitting market, overcoming challenges during COVID and dos and don’ts in approaching angel investors. You’d be barking mad not to read on.

Tell us about BorrowMyDoggy?
BorrowMyDoggy is an online platform connecting dog owners with borrowers. People sign up, create a profile, write a little bit about themselves or their dog and then they’re able to take a look at the suitable matches in their area. Matches are based on location and availability, and it’s all about getting to know each other really well before sharing the dog. People can check over here if they need the best dog training services.

For owners, it is a way of finding a trusted local dog lover to take care of your dog when you can’t. You can rest assured from the centers of dog boarding near me that they will treat your dog like family. For borrowers it is a chance to have a dog in your life by spending time with one and helping out owners at the same time. Dogs also get more exercise, attention and most importantly, love. It’s a win-win! It could be someone who has just had a baby who might need someone to help take care of their dog. They might be connected with someone who has a five year old but can’t commit to the full time commitment, but has a dog void in their life. Every match is very different. For the best of dog help, you can try these out and get the best ones.

What does it cost?
£12.99 per years for borrowers and £44.99 per year for owners and all the members are verified and covered by insurance. They have 24/7 vet access. No money is exchanged between borrowers and owners, as borrowing is based on the love of dogs rather than for a profit.

How have you overcome challenges during COVID?
Of course it has been challenging. We put a notification at the start of the crisis to say don’t meet someone else from another household, although there were some exceptional circumstances. What has been truly heartwarming is seeing the community come together. During COVID we’ve seen different members of our community perform selfless acts, for example delivering medication to other members who were self isolating. 

Overall the interest in dogs has surged during COVID and many more people are looking at owning them. However it is important that people understand the cost and time commitment of having a dog. 97% of dog owners underestimate the cost, which is £21-£33,000 over its lifetime. A lot more people have got dogs during lockdown but a lot of people are going back to the office. There is also separation anxiety to consider.

Why did you decide to raise investment?
We wanted to grow our platform further, both acquiring new members and also optimize the product and make the platform better. The extra investment means more staff and technical work on the platform and customer acquisition.

What are your top tips for anyone raising investment for the first time?
Firstly understand it is a process that can take time and not something you can do over night. Make sure you understand investors. This means do your due diligence on interested parties. Also have someone review the investor deck so you can get feedback on the material. Finally check a crowdfunding platform if you want an idea of top investor questions.  I would also look at the top questions you would expect and have answers ready for them. 

What attracted investors to your company?
The dog sitting market is worth over £1 billion. This is something we are trying to disrupt and we really are the first of the kind. It is also helped that many investors are dog lovers. They could ‘get it’ instinctively and understand it would be great to have something looking after their dog. The other key thing that appealed was the product. We are a large community, we have some really strong numbers. A lot of our investors had heard about the platform. 

What has been good for acquisition?
Online acquisition, PR and world of mouth has been great. We also have an engaged community who are happy to recommend us. 

My biggest fundraising mistake was…
Historically realising how long it can take to raise funding. You need to be prepared that it may be longer, especially when it is the first time. For example with angel groups, they don’t necessarily meet that often. Even with a crowdfunding platform there is a lot of work to get a pitch ready and then the closing off of the investment round.

Any other advice?
Understand who has the capacity to follow on relatively easily if the company requires more money. Checking out the record of the investor is a good way of doing this. How do they add value to the company? Do they have a network they can introduce you to? Also, do you have good chemistry with the investor? It’s like getting married, because it’s hard to get divorced! 

Why did you choose to use Angel Investment Network?
A friend raised funding for the network and  thought it was really easy to use. I found it straightforward to see what was required to get a pitch live and the team is very nice.

Edtech startup BibliU raises more than £600,000 with support from Angel Investment Network

Edtech startup BibliU recently raised more than £600,000 as part of a Series A extension funding round, supported by AIN. The raise received widespread media coverage across the business, startup and education press.

London-based BibliU is a digital education platform that provides students with digital access to their textbooks and libraries across all their devices. The campaign funding round, an addition to its £6.5m Series A, was in response to a surge in demand due to COVID 19.  Completed in eight weeks, the funds will be used for new technical hires to support demand from Universities. The startup is scaling rapidly with 60+ new pilots across the globe. 

Founded in 2014, the company now has over 100 university customers including Oxford, Imperial, University of Phoenix and Coventry University. The company has digitised content from more than 2,000 publishers including: Pearson, McGraw-Hill, Oxford University Press. The content is licensed directly to universities, who can then provide access to students and include the costs in their existing tuition fees. 

According to David Sherwood, CEO and co-founder of BibliU: “BibliU has seen rapid growth across the globe over the last few months, and we believe COVID has pulled the transition to digital learning forward by at least 5 years. We have always existed to assist universities with this transition, by providing an unmatched student experience in a cost-effective way. BibliU is the perfect intersection for universities that are looking to create a seamless distance-learning experience, and do so in a way that introduces operational efficiencies to their workflows. We’re thrilled that AIN was able to assist us in this rapid extension to our Series A, and are excited to see where this round takes us.”

According to Sam Louis from Angel Investment Network, who led the raise: “BibliU sits at a fantastic intersection of traditional learning structures and digital evolution. The business has broad reaching applications, a strong business model and most importantly, it delivers real value to its users. EdTech is a tough area to gain real traction and I think what BibliU has stands apart from many of the others which is why we’ve seen such great uptake from investors. The COVID lockdowns have now accelerated adoption of digital learning and hopefully this will lead the way for more sustained growth in the EdTEch space and of BibliU.”

If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here

Green shoots of recovery post-Covid

Olivia Sibony contributed an article for the latest issue of CEO Today magazine on some research from the AIN platform that points to the continued interest investors have in sustainable startups. Contributing a double page spread Olivia discussed analysis carries out by AIN. Comparing the four month post-COVID period (Jan-April) with the four months before (Sep-Dec).

The research found ‘Renewables’ is now the 11th most popular keyword for searches, up from 14th pre-COVID, which was in itself a rise of 34 places year on year. Additionally ‘Greentech’ is now the 13th most popular keyword, up from 47th in 2018, a staggering increase.

Overall ‘Tech’ remained the overall most popular search term and the fastest riser is ‘Medtech’ up 10 places to 25th most popular category. With the world reeling from its biggest health crisis in a century, it’s no wonder this category is strongly on the radar for investors.

In the piece Olivia writes: “Innovative companies are fusing sustainable business ideas with deep tech to come up with tailored solutions to real world challenges. These are peaking the interest and passions of increasingly impact motivated angel investors. This is a trend that is accelerating, rather than slowing down post COVID. Global markets are also reflecting this, with ESG funds consistently outperforming traditional ones since COVID emerged.

Another interesting trend on the platform relates to searches for ‘agriculture’. This jumped four places to become the 4th most searched for search term in the post COVID period. Olivia continues: “Real fears around food security have been thrust into the spotlight during this crisis and companies helping to secure our food supply will become pivotal players. Investors are seeing the opportunity for huge innovation with ag-tech and smarter food production so we can use technology to be more sustainable for the land.”

She highlighted Hummingbird Technologies, an Artificial Intelligence business who previously raised on AIN. It provides advanced crop analytics to its customers by using satellite and drone data and proprietary machine learning algorithms. They allow customers to increase their yields, optimise chemical inputs, farm more sustainably and make earlier, more informed decisions.

Read the full article in the latest issue of CEO Today magazine