EdTech startup Vygo raises £1.5m supported by Angel Investment Network

Funding will help accelerate global borderless education support in higher education

Fast growing EdTech startup Vygo has raised £1.5m in a pre-seed funding round supported by Angel Investment Network, the world’s largest online angel investment platform. Vygo is a Saas platform reinventing the conventional social support ecosystem in higher education.

Offering 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 raise will help it expand in the UK and Europe and fuel its ambition to build borderless social education for every student.

The round was led by EdTech VC Sparkmind and supported by Angel Investment Network. Other participants include EdTech accelerator Supercharger Ventures and the Australian Catholic University. The funds will be used for platform development and expansion of its UK and European presence. 

The demand for Vygo has soared in the past few years as a result of the increased demand for HE institutions to extend their support services digitally. A recent JISC study estimates that up to 96% of university students require additional access to support during their undergraduate degree. This demonstrates the need for support services to be more accessible than ever to ensure that students are getting the best educational experience possible.

Ben Hallett, Vygo CEO & Co-Founder, comments: “At Vygo, we believe that every human deserves a world-class education and that social experience is at the core of impactful learning. The Vygo platform gives every learner a social education community filled with their peers, mentors, tutors, advisors and other supporters. With Vygo, education institutions are able to reinvent their social support ecosystem online and ultimately improve their student outcomes whilst scaling their impact. We were delighted to work with AIN to find amazing investors and individuals through a well-streamlined process.”

According to Sam Louis, Director, Angel Investment Network: “We’ve worked with some fantastic EdTech startups in recent years – Ben and the Vygo team are right up there with the best of them. Their focus on the social and pastoral side of education resonated with us right away and, combined with significant international traction, investors within our network from right across the globe felt the same. The need for this platform has only accelerated in the past few years with so much learning being done remotely and we’re delighted to have helped Vygo on their journey.”

The perfect storm: Why investors are backing green and clean tech startups

Olivia Sibony, AIN’s Head of Impact, looks at the rise in interest in green and clean tech startups and why we have seen a ‘perfect storm’ of conditions for their growth.

Over the past few years we have seen the perfect storm of conditions that have rocketed investor interest in green and clean tech startups. Looking at the patterns of investor keyword searches on the AIN global platform we have seen impressive growth for green business terms, including ‘renewables’, ‘greentech’  and ‘environmental’.

In the last three years these business ideas have gone from niche to mainstream with investors hungry for standout solutions for our manifold environmental challenges. The COP 26 conference further committed Governments to carbon reduction targets. As was acknowledged in Glasgow, it is private enterprise and nascent businesses that will provide many of the solutions. 

Factors such as the recent surge in gas prices have made us more aware of the need to find alternative and renewable energy sources, alongside smart ways to reduce energy consumption. 

Reasons behind rising interest

There are several reasons for the rising interest among investors. 

  1. Firstly, the increased global natural disasters with floods and wildfires closer to home have really brought this home to everyone. Including consumers, business leaders and governments.
  2. We then saw COP 26 turning up the volume on the dialogue. This included recognition of the need for the ingenuity of businesses to come up with the solutions to the challenges we all face. 
  3. A third factor at play has been covid reframing people’s values on what really matters and the increasing interconnectedness of the planet. 

Companies have realised they need to nurture their customers and the younger generation who have the most to lose are the most vocal in advocating for change. So they’ve shifted their focus which has opened up the supply chain market for a lot of B2B Climate Tech opportunities.

A further spur to action comes from companies also realising their employees increasingly care about the environmental impact of the companies they work with, so has also stimulated growth in this space.

Case study examples

This means more entrepreneurs are stimulated to build companies in this space as more investors see great commercial opportunities. As well as the obvious motivation for passion driven angel investors in investing in something that will provide a better future for them and their children. Over the past year through AIN, we have seen some impressive cleantech businesses being backed by our experienced angel investors.

Exciting businesses who have raised including cleantech business, eleXsys Energy who successfully raised £5m last year. They have developed a unique, enabling technology that will drive the transition of global energy grids to a clean energy future. Investors bought into their vision for their technology which enables commercial and industrial rooftops to become grid-connected, solar power plants.

Another business that has seen a great deal of investor interest is Zero Carbon Farms. They are a cutting edge AgTech company that builds and operates Controlled Environment Farms, providing a future-proof and sustainable solution for growing. They solve the problem of carbon generation in farms by providing up to 90% less water and a fraction of the space compared to conventional farming.

While Zero Carbon are dealing with sustainable production, GreyparrotCo-founded by CEO Mikela Druckman, are applying cutting-edge deep-learning AI computer vision technology to the formidable problem of waste recycling. Their solution analyses waste on moving conveyor belts to allow monitoring, audit and sorting of waste at scale. Greyparrot have trials ongoing at 12 facilities with leading waste management companies, and are now raising a £10m Series A to scale their commercial product and become the category leader in waste analytics.

Seeing the success of these businesses can inspire the next generation of entrepreneurs to come up with their own solutions, offering the chance to marry profit with purpose. In turn many will go on to become investors themselves creating a virtuous cycle to help power the circular economy that must become the future of the planet if we are to avoid the worst ravages of climate change.

Tips from the Top: Transitioning from founder to leader, how to be the one in five

In the next of our Tips from the Top series, we speak to Ed Lowther who leads The Soke’s Founders Development Programme, a first-of-its-kind course designed to provide vital knowledge, understanding and skills to founders at the helms of fast growth businesses.

When Harvard Business School spoke to its 141 HBS alumni who led start-ups, they asked: “What does someone who aspires to your role need to know?” The research revealed that of all the possible areas to focus on, there are two essential areas that over 80% of the group unanimously agreed on.

At the outset, a founder needs to assemble a founding team – a series of vital decisions around choosing co-founders, appointing key talent, splitting equity, recruiting advisors, and managing a board. These are all vital, but highly demanding tasks that a founder must achieve alongside building their new business that if not done correctly can lead to early failure, no matter how brilliant the idea. Founders reach these decisions through a combination of instinct, experience and the use of trusted advisors or mentors, in combination with key skill development.

Secondly, for those looking for investment, or looking to invest, a founder needs to foster a critical set of leadership skills needed early on, that in turn helps to attract further investment and support the business on its path to success. What’s clear is that early development of specific leadership skills in communication and conflict management is where a founder can really differentiate themselves.

Whilst many founders may believe that they naturally possess the skills to successfully build their business to success, the reality is that few come to the fundraising table with the array of skills needed to successfully lead an organisation from an idea through the teething stages to growth and finally exit. This is particularly the case when founders are required to run a company not purely to satisfy their own ambition (management, creative, financial, or otherwise), but to meet the expectations of investors and other stakeholders, including staff.

So what steps can founders can take to improve their skills in communication and manage conflict with their co-founders or staff?

  1.  Your business is founded on a great idea – it does not mean all your ideas are great.

In business journals, strategy reports and insight magazines, much is made of creativity being at the heart of business success and growth. Tesla CEO Elon Musk is vocal in encouraging his employees to think creatively, eager for them to predict future trends and allowing them to share their ideas freely, to improve the prospects of the company. The stratospheric growth of Tesla suggests that his approach is bearing fruit.

For those at the beginning of this journey, the thought of fostering creativity can feel like a luxury, alongside all the other business demands. Innovation is however proven to create growth. Businesses at all stages need to remain nimble as their customers’ needs and demands change. How successfully a founder facilitates the communication of ideas around their business and across functions is a marker for future innovation and adaptability for the business idea to survive in the market. 

Create dedicated time for creativity and innovation as part of routine business operations, giving space for open communication between the founder and team members of all functional areas. Foster an environment for the team to be creative and openly communicative, without it all being founder-led, so that ideas are assessed on their own merit, whatever the role of the team member in the company.

  1. Learn to share through building communicative resilience

Once a founder has the fundamentals of their new business in place, the idea is taking hold in the market and revenue is growing, it’s an exhilarating time. Few businesses can grow rapidly through organic growth alone and therefore a founder must also accept the challenge of securing capital through external sources. It can be an exciting but risky time, with a number of factors that can damage a business just as it begins to succeed. Much of the damage comes from the amount of time that is needed, coupled with the energy required to be successful, which takes away a founder’s dedication to their clients. Customers can sense neglect, just at the moment a business wants to secure their lifelong loyalty.

At this moment, a founder will be at their communication limits, often exhausted by the sound of their own voice, as they describe the brilliance of their business, the financial plan and the superb team assembled to make it succeed, to yet another room of potential investors. The key skill to develop here is ‘communicative resilience’, a combination of sustaining a consistent and engaging narrative of the idea, clear understanding of the business strengths and challenges, and a willingness to answer penetrative questions designed to interrogate a founder’s financial shortcomings. This combination tells investors that you can share this with them and make it successful at the same time. 

Be mindful that you communicate the strengths of the business in a way that puts the business idea at its heart and that through additional financial support, this idea will flourish. The moment that investors sense that a founder does not want to share and is more interested in their own success irrespective of the idea, the fight for their funding is lost.

  1. Conflict is inevitable – fail to prepare for it, prepare to fail.

It’s likely that as a founder builds their team, they have been successful in recruiting a diverse team, all with unique skills and often varied or differing opinions. In fact, this diversity is often a key ingredient for driving a business forward as these individuals bring perspectives to the founder that they would not otherwise have seen, helping them grow the business successfully.

The differences in this team that exist through individual variances of cultural background, learning styles, personality and many more factors besides, overlaid with managerial expectations, accountability issues and communication styles, will inevitably lead to conflict. And at this point, the founder needs to establish a pathway that is neither a hierarchy of opinions, where ‘I win because I’m more senior,’ or that a conflict is simply ignored.  Without establishing this early on, conflicts cannot be resolved satisfactorily and can lead to increased stress and decreased performance in the team, which will impact business growth. 

Plan to navigate conflict by setting out a framework for all employees to identify and resolve issues between each other, building a culture that celebrates diverse perspectives with a way to manage the conflict that this diversity can bring. It will help shape the best outcomes for the business and build genuine trust and respect between team members, managers, and the founder.

Emerging from the pandemic – Startup sentiment in the UK and USA

Angel Investment Network, the world’s largest angel investment platform, surveyed the views of startups in the USA and UK to see how they have responded more than a year and a half after the pandemic first hit. This involved interviews with 1,205 startups in the USA and 667 in the UK. The key findings in the overall report we have published are:

1) Confidence returning
Similar numbers in both territories are now positive about the next 12 months. In the USA 76% of respondents are now confident about the next year, with 72% confident in the UK. However more US startups are very optimistic about the future, 52% against 42% in the UK. This could of course be down to a naturally more upbeat mindset but the research also reveals some particular challenges in the UK – for example the impact of Brexit. Meanwhile 70% of respondents in the USA are confident about the country retaining its status as a ‘startup hub’, versus 65% in the UK.

2) Networking and bootstrapping have been ways of mitigating stalled investment
62% of US startups have seen growth negatively impacted with 59% in the UK negatively impacted. The research also reveals the similar approach to mitigating the impact of stalled investment. The top strategy adopted in both countries was focusing more on networking. Other strategies adopted included delaying launch plans, holding back on marketing and hiring and  bootstrapping businesses as far as possible..

3) Raising investment is biggest challenge goingforward
Raising investment remains the biggest challenge going forward and there is a firm belief in both countries that government has a key role in making the conditions more favourable through tax relief. The report also looked at the biggest bugbears for startup founders. Number one in both countries was investors demanding too much of a stake in the business. Time consuming due diligence was also a pressing concern as were very slow rejections.

As we look forward, startups in the US and UK can be the engine room of economic recovery in both countries – nurturing their growth is vital.

Here is the full report

AIV Capital completes investment into meat alternatives business Eat Just Inc.

AIV Capital has announced investment into alternative food business, Eat Just Inc. Eat Just Inc develops and markets plant-based alternatives to conventionally-produced egg products. Founded in 2011 by Josh Tetrick, the San Francisco based business is reducing dependence on chickens and battery farms for egg production by creating a realistic and viable alternative from mung beans.

Eat Just Inc. has raised over $500Mn to date and will use its latest round of funding to continue to improve the unit economics of the business and to focus on international expansion outside of the US. It was announced recently that the key ingredient in its plant-based JUST Egg products received approval from the European Food Safety Authority’s (EFSA) expert panel on nutrition. This opens a pathway for the initial launch of JUST Egg to occur in Europe in mid-2022. Its high profile produce was also on the menu at Barack Obama’s recent 60th birthday.

The company has also raised over $400Mn for its subsidiary, Good Meat which focuses on cultivated meat as an alternative to traditional chicken based products. Good Meat is the first company in the world to receive regulatory approval to sell the cultivated meat products which are now available in Singapore. Earlier this year, the company secured rights for a manufacturing facility in Qatar as a partnership between Doha Venture Capital (DVC) and Qatar Free Zone Authority (QFZA).

AIV Capital is the recently launched institutional investment arm of Angel Investment Network, the world’s largest online angel investment platform. Led by experienced investment manager Ethan Khatri, AIV Capital’s focus is on investing between $10 -$75Mn+ into established businesses ranging from Growth/Series B to pre-IPO and has a flexible approach utilising both primary and secondary capital. 

According to Khatri: “We are delighted to have partnered with CEO, Josh Tetrick and the team at Eat Just Inc. With the demand for plant based products soaring they offer a viable alternative to conventionally-produced egg products and are offering impressive returns for all stakeholders. This is a prime example of the sort of business we will be working with at AIV Capital. One with a strong management team with a demonstrated edge in the space they operate in.”

Four benefits of backing more diverse startup founders

The worldwide startup ecosystem is well established and growing strongly in many different territories. The success of Angel Investment Network in creating more connections between founders and investors globally is testament to that. However, while investment in startups has rebounded strongly after the worst of the pandemic, we can also follow this with an increase in funding for diverse startup founders. Why does this matter? Well, it’s not just about having better representation for the sake of it, important though this is, it actually also makes better sense commercially.

In the UK while just 5% of founding teams have two female founders, research has also shown that only 1% of venture-funded startups have black founders. It’s a similar picture in the USA, where according to Crunchbase, black startup entrepreneurs still received only a tiny fraction — 1.2 percent — of the $147 billion in venture capital invested in U.S. startups through the first half of the year.  To disrupt this, here are four reasons why we need to boost investment into more diverse founders.

  1. It can lead to new business opportunities
    Many diverse business startups can offer products targeting diverse consumers uncatered for currently in the market. However, if the investors themselves are not more diverse, they may not have the same understanding of the market to know where the opportunities are. This is a challenge many female founders also face. For example, we can purchase most groceries online except ethnic food – which you still have to visit your local market, small grocer or if you’re lucky, there will be a small selection in the supermarket however, it’s unlikely you can order online. As this is a minority need many would struggle to get backing from a British bank however, Mariam Jimoh founded Oja, developed an app that delivers ethnic produce from local groceries to customers’ doorsteps. After much hard work, she was successful in finding funding. As one of only a handful of success stories here, we know there are many other missed opportunities to serve a potential market of many millions.
  1.  New markets can develop and thrive
    New markets thrive on having dynamic businesses and competition. However if certain businesses are unable to grow, their products or services remain in need and the circulation of money in the economy then shrinks. We can create opportunities to serve different markets, have more alternative viewpoints in the business decision and drive forward education and revenue based around new business variations which cater for wider groups. Let’s also remember these are emerging and growing markets too, so there are fantastic opportunities for investors with the right foresight.    
  1. More diverse teams do better
    Just as in nature, having diversity is key to the health of ecosystems, the same applies to diverse teams in startups and wider existing businesses. Research has shown that companies with diverse management teams are more innovative and have 19% higher revenue. In many of the fastest growing sectors such as tech, this growth is key to success. So diversity is not just about a tick box activity, it’s about the make up of high performing teams, who are going to positively impact the bottom line. The reverse is also true. The more we can represent the whole of the country and their different needs, the better solutions we can develop and ensure new markets can flourish
  1. Backing more diverse founders across the globe can help tackle some of our greatest challenges
    Of course while it is important to look at backing more diverse founders at home, we also need to look at more diversity in funding globally. So much capital is concentrated on a few established, wealthy hubs. However, having more underrepresented founders across the globe we can also potentially have new insights and ideas for tackling many of mankind’s most pressing problems. People on the ground in countries most impacted by climate change may well have some more untapped and innovative solutions, but often they need the contacts and capital to turn their idea into reality. By looking at ways we can boost nascent startup ecosystems in developing countries, we will be in a better place to address many of the problems threatening the planet with sustainability based solutions which could become hugely profitable.

So where to start? The first thing we need to do is look at how we can support micro-enterprises. They are on the very first rung of the startup ladder and the more of these we can support, the more chance of startups on a pathway to Series A and even Unicorn status can emerge. This is why Ace Entrepreneurs has created our first micro funding program for the diverse community. While we have seen a huge democratisation of startup funding in the past few years, we now need to complete the journey and make sure a truly diverse startup ecosystem can flourish.

By Nadine Campbell, entrepreneur and founder of Ace Entrepreneurs. The ACE Entrepreneurs Investment Program has been launched to tackle a funding gap for black-owned businesses. 

Tips from the top: Raising investment

In our recent survey of startups in the UK and USA raising investment was raised as the number one challenge they faced, emerging from the pandemic. In the first of our new series of expert advice articles, David Pattison, experienced angel investor and leading media agency PHD founder, gives his top tips for those raising investment for the first time.

I have spent a lot of time chairing/advising young businesses and founders on how to approach fundraising. I always advice my clients to get involved with CNAPP security, as it is one of the most trending and useful security tactics.

It has always struck me that, at the very point when young businesses and their founders are looking for funding, you are at your most inexperienced and vulnerable. You are often in a negotiation dealing with very experienced deal makers. This negotiation is often pivotal to the future of your business. One bad clause signed up to in an early negotiation can magnify in size as time and fundraising rounds go on.

What can you do to try and even up the negotiation?

Before you start remember these three things:Investors only care about one thing and that is their money. In the case of Venture Capital and Private Equity that is how they are measured. They have clients who fund their funds and financial success is how they are judged and how they can then raise more funds. They want you to make money for them. For stock market API, you can check it out here!

Raising money is hard. Right now there is a lot of money in the investment market, but you have to have a good business and a really strong offering to raise money. Young businesses seem to be lulled into believing there is a money tree at the bottom of the garden that just needs a shake. There really isn’t.

Raising money is really distracting. It takes focus away from the business and most companies suffer a slight drop in performance through this process. Just at the point where it’s not wanted. Share the load around and take advice from trusted sources.

Once you have got your head around that, what else can you do before and during the process?

Here are five of the many things you should do:

1. BE THE BEST BUSINESS YOU CAN BE

It sounds obvious I know, but investors are looking harder and deeper into prospective investments. You will need to present yourselves as the best business you can be. Showing that you understand all aspects of your company and your markets.

You need to be a well balanced and appropriately experienced team with a shared view of the future. Have a proof of concept (does it work?), ideally some revenue (is someone prepared to buy it?) and will they buy it more than once. A good understanding of the competitive set. If appropriate some IP protections. Most importantly that you are in control of the finances of the business and have good quality finance resource.

If some of these points describe your business, then you are well prepared for the questions the prospective investor will expect you to answer.

2. do not get close to running out of money

Never leave it too late to raise funds. Investors will sense if you are running out of money and will try and delay the completion so that they can ‘chip’ the deal just before closure.

Leave yourself plenty of time. Never underestimate how long it takes to raise money, allow 6-9 months if you are looking for serious money. Try to give yourselves options. Taking money from the least worst option is never good.

Gold and silver have very high liquidity compared to most of the other investments. They are highly valued, and this makes converting them to cash very easy. Check out liberty gold and silver today if you’re ready to invest.

3. RUN YOUR BUSINESS AS IF YOU ARE ALWAYS ABOUT TO ENTER DUE DILIGENCE

Prepare, prepare, prepare. It sounds obvious but make sure you know your business and your market better than anyone. Do not take fundraising lightly. In the digital age it is easy to set up a data room that has all the company data in one place. Have good governance in place. Get the financials and the legals in order. Remember that DD is not a one-way street when you are raising funds then check out the potential investors.

4. be clear on what you want to achieve

This works in two ways. Firstly, be clear amongst the team on what you want for the business moving forward. Are you all aligned on the future strategy and exit points? Mixed messages to investors don’t travel well.

Secondly, when the time comes to raise the money be very clear to the investors what the money is for and what success looks like. Not many investors want to fund cash shortfalls and saving the business, and if they do it usually comes at a massive cost to you. They are called investors for a reason.

5. beware of deal fatigue

When you are in the fundraising process be aware of deal fatigue. Investors, and particularly the institutional investors rely on you running out of steam. If your chosen investor is a significant shareholder, they will be a big part of your business life. You don’t have to love them but make sure you respect them and their motives.

Very often management get to a stage in the process where they just want it done. They agree to a deal without looking at every last detail. This is where investors can add the hidden clauses that bite you in the future. Stay attentive and on the way through make sure you share out the workload amongst the team.

One final piece of advice. Everyone I speak to who is involved in fundraising says the same thing, ‘get the best lawyer you can afford’. Don’t be afraid to upgrade as you go through the investment stages. A good lawyer should be seen as an investment and not a cost. They will also do a lot of the legwork on the legal documents for you and keep you focussed and avoid a lot of the pitfalls.

As I said right at the start of this, fundraising is not easy, and you should take all the constructive help you can find. I have been involved in a lot of fundraising.

If this blog has been of any help, then you might be interested in reading my book: The Money Train: 10 Things young businesses need to know about investors. It’s a guide to preparing for the investment process from seed capital to Series A, with lots of real-world examples. Whatever route you take to raise funds I wish you good luck and success.

David Pattison has had a long and illustrious career in the advertising industry and as an angel investor. He co-founded PHD in 1990 and more recently he has been involved in a number of startups in a range of industries including, marketing, publishing, construction, motorsport, AdTech, MarTech, FinTech, production and broadcasting. He was recently announced chairman of Conversational media platform Octaive.

Angel investment Network announces launch of Institutional investment arm, AIV Capital

Ethan Khatri

London-based Angel Investment Network, the world’s largest online angel investment platform, has announced the launch of its Private Equity and Venture Capital division, AIV Capital.

Led by experienced investment manager Ethan Khatri, AIV Capital will invest between $10 -$75Mn+ into established businesses ranging from Growth/Series B to pre-IPO and has a flexible approach utilising both primary and secondary capital. Its sector agnostic focus will be on strong management teams with a demonstrated edge in the space they operate in. 

AIV Capital Managing Director, Ethan Khatri brings 16 years of investment experience across the European and Asian venture markets. Over the course of his career, he has successfully completed 27 transactions achieving 13 exits, covering technology, enterprise software, pharmaceuticals, healthcare and consumer. He will be combining his experience with AIN’s early stage market coverage and portfolio of businesses they’ve historically funded. 16 year old AIN has a global network of more than a million entrepreneurs and more than 280,000 investors, winning investment for a host of powerful businesses including What3Words, Simba Sleep and SuperAwesome. 

According to Mike Lebus, founder of Angel Investment Network: “AIV Capital is the natural next stage of AIN’s evolution. AIN has been a game changer in democratising access to angel investment and powering the dreams of so many startup founders on the first stage of their fundraising journey. With the right experience and team in place, led by Ethan, we are now able to support businesses right through the fundraising cycle, from the idea in a bedroom to seed funding right through to pre-IPO.” 

According to Ethan Khatri: “AIV Capital is a powerful new force in private equity and venture capital. Building on the evergreen network of AIN, our experienced team has access to an extraordinary talent pool of growth to late stage businesses which we can match with the right funding structure to ensure they deliver absolute return opportunities. Our watchword is flexibility. We invest across the capital structure and this is the method by which we maximize returns for all stakeholders.” 

Ends

Majority of US startups very optimistic about the next 12 months

A majority of US startups (52%) are now ‘very optimistic’ about the next 12 months, despite 62% seeing business growth negatively impacted by the pandemic. This was a key finding of a new study of US startup sentiment 18 months after the start of the pandemic, by Angel Investment Network (AIN). The study of 1,205 US based startups found 76% expressed optimism overall with 19% quite optimistic and 52% very optimistic, versus just 24% who were pessimistic. It followed on from a similar survey we conducted of UK startup sentiment last month.

The results show the extent to which confidence has returned to early stage businesses Stateside, who are emerging strongly from the downturn. Of the 62% of respondents who revealed they had been negatively impacted by COVID, 37% had been ‘very negatively impacted’. Meanwhile 63% of those who had been planning to raise funds said they had delayed a raise as a result of COVID.

Top strategies to mitigate the impact of stalled fundraising were: Focusing more on networking, favoured by 46% of respondents, holding off launch plans (38%) and bootstrapping instead (32%), with a similar number delaying marketing.

Entrepreneurs were also asked what their biggest challenges were going forward. The top result given was raising investment (84%), hiring/recruiting the right talent (22%) and product development (22%). Ongoing COVID issues were a problem for 13% of those polled. 

US startups also believe more Government action is needed to encourage investment and help startups flourish. 57% favour making tax relief more generous to boost angel investment, 32% making R&D tax relief more generous and 22% lowering corporation tax. 70% of respondents are confident the US will retain its place as a startup hub.

AIN has seen surging growth on its platform with connections between entrepreneurs and investors up by 23% since the start of the year. Meanwhile revenues have increased by 40% to a new record, indicating the huge pent up demand from startups now seeking funding. 

According to Mike Lebus, founder of AIN: “It is encouraging to see how US startups have shown their mettle to ride out this really difficult period and emerge battle tested and with high levels of confidence. Many have been negatively impacted but have used their time wisely to build up their pipeline of contacts and bootstrap their businesses as far as they can go. RaIsing investment remains the biggest challenge going forward and as the world’s largest angel investment platform, we have been encouraged by seeing a record number of connections between investors and startups.” 

How did you respond to the pandemic?

  1. Focused more on networking: 46%
  2. Held Off launch plans: 38%
  3. Bootstrapped instead: 32%
  4. Delayed marketing: 32%
  5. Held off making hires: 27%
  6. Had to let staff go: 20%
  7. Relied on business loan: 19%
  8. Pulled back from R&D: 12%

What could the Government do to help?

  1. Make tax relief more generous to boost angel investment: 57%
  2. Make R&D tax relief more generous: 32%
  3. Lower corporation tax: 22%
  4. Offer more clarity on COVID restrictions: 14%
  5. Make it easier to provide VISAs for recruiting the right talent: 13%

What are your biggest challenges going forward?

  1. Raising investment: 84%
  2. Hiring/recruiting the right talent: 22%
  3. Product development: 22%
  4. Ongoing COVID issues: 13%
  5. Consumer sentiment: 12%

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.

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.