Mercia is pleased to announce the profitable sale of one of its direct investments, Clear Review,  for a total cash consideration of up to £26.0million.

Mercia held a 4.0% fully diluted direct holding in Clear Review at the date of sale and will receive cash proceeds of £1.0million representing a 2x return on its investment and a 72% IRR. In addition to this direct investment return, the sale will also generate an 8x return on Mercia’s EIS managed fund investment cost and a 122% fund IRR.

The company, which was first backed by Mercia’s managed funds in 2018 and became a direct investment in June 2019, has been sold to Advanced Business Software and Solutions, the third largest British software and services company in the UK.

Clear Review, which was founded by Stuart Hearn, former HR director at Sony, is a SaaS tool providing organisations with data and systems to improve performance management. Under Stuart’s leadership the company quickly met its commercial milestones, passing £2.0million in annual recurring revenue in December 2019, up 100% from the previous year. Mercia portfolio director Nigel Owens was a non-executive director from December 2019 until the sale.

Stuart Hearn, CEO of Clear Review, said “We’re extremely proud of the success of our Clear Review platform and its role in improving business performance and developing talent around the world. The acquisition will enable us to accelerate Clear Review’s growth as well as integrate with Advanced’s HR solutions, helping organisations retain their best talent and increase performance.”

Dr Mark Payton, CEO of Mercia Asset Management, said: “Clear Review is now our fifth full cash exit from the direct investment portfolio, coming just three months after we announced the sale of The Native Antigen Company. We have been consistent in our stated objective to both source and exit deals well, and I am pleased that we have been able to again demonstrate our execution of this strategy through another successful exit.

“The team at Clear Review has achieved great things in a relatively short period of time and I am confident that under their new custodian they will continue to disrupt the HR SaaS sector.

“This sale process has been handled entirely virtually, which is testament to our team’s effectiveness in transacting deals even during these complex times.”

 

A start-up which aims to use cutting-edge technologies to help farmers improve crop yields has raised £250,000 from the MEIF Proof of Concept & Early Stage Fund, which is managed by Mercia and part of the Midlands Engine Investment Fund (MEIF).

The funding will allow Earth Rover to launch its first product, a ‘crop scouting’ system which predicts the size and timing of harvests. The Earth Rover system uses cameras fitted to a tractor to scan the plants and measure their growth as the vehicle passes through the fields on routine farm operations. The data is then analysed using artificial intelligence (AI) housed in a supercomputer on board the tractor.

Crop scouting is traditionally carried out by farmers walking the field. Earth Rover, which is based in Newport, Shropshire, aims to provide more accurate predictions to help them produce the right number of crops – enough to meet contracts with buyers while avoiding food waste that has to be ploughed back into the fields. It also helps farmers plan their harvesting labour requirements.

The system, which is suitable for high value crops such as broccoli and lettuce, is currently being trialled at Polybell Farm in Doncaster, one of the UK’s leading organic vegetable producers. Earth Rover will initially target growers in the UK and Spain, which has a year-round season. The company, which has been funded so far through angel investment and by a contract with the European Space Agency, is also working on robotic systems for herbicide-free weeding and harvesting.

The MEIF funding will be paid in two tranches over the next 12 months subject to commercial milestones and will allow the company to fund current trials and bring the product to market.

David Whitewood, CEO of Earth Rover, said: “Technologies such as AI and robotics have revolutionised manufacturing in recent years, yet agriculture has suffered from a lack of investment and still relies on traditional techniques. At a time when we face the challenge of feeding a growing population with limited land and labour supplies, it is time for agriculture to undergo the same transformation. At Earth Rover we aim to play a leading role in the digitisation of farming to make the industry more productive and sustainable.”

David Baker, Investment Manager at Mercia, added: “Vegetable growers routinely overplant crops due to the difficulty in predicting yields and the need to fulfil stringent contracts with supermarkets. This pushes up costs and means that much of the crop simply rots in the fields, creating additional carbon emissions. We believe Earth Rover’s system could help increase crop yields by 5 per cent and reduce costs by a similar amount. This funding will help the company to prove its value and launch into the market.”

Ryan Cartwright, Senior Manager at the British Business Bank, said: “This latest equity investment is a great example of the innovative Midlands’ businesses that the MEIF seeks to support.  The funding will help Earth Rover as it begins to commercialise its technology and we’d encourage other start-ups within Shropshire and the Marches area to consider the options available through the MEIF.”

Mandy Thorn, chair of the Marches Local Enterprise Partnership, said: “This is a hugely exciting project which shows the Marches is at the cutting edge of innovation in agriculture and developing high-tech solutions which improve efficiency and sustainability. We are delighted that the MEIF has supported Earth Rover and look forward to this project going from strength to strength.”

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

Fast-growing legaltech business Clarilis has raised a further £6m in a Series B investment to support its ongoing growth. The funding has come from Mercia’s Northern Venture Capital Trust Funds (VCTs), which were an existing investor in the business, and Gresham House Ventures, investing on behalf of the Baronsmead VCTs.

The funding will assist the company’s continued international growth and fund its sales, marketing and product development activities.

Clarilis, which is based in Leamington Spa and has an office in Singapore, is a leading provider of automated drafting technology. Its CLARILIS™ platform was designed to automate complex suites of precedents, such as Share Purchase and Facility Agreement suites with many ancillaries, parties and complex underlying deal structures. CLARILIS™ saves significant amounts of lawyer time whilst ensuring that law firms and in-house legal departments draft consistently high-quality documentation.  This creates time for solicitors to focus on what they do best – providing bespoke advice to clients and handling non-standard aspects of transactions.

Clarilis was co-founded by brothers James Quinn, a former solicitor, and Kevin Quinn, the technical architect of the CLARILIS™ platform and former lead developer. Since its launch in 2015, it has experienced consistently strong growth and now boasts an impressive blue-chip client base including Addleshaw Goddard, Baker McKenzie, GoCompare, National Grid and Slaughter and May.

Henry Alty, Investment Director at Gresham House Ventures, said:

While the legal world has arguably been a late adopter of technology, firms are realising that automation is essential to driving both cost efficiency and resilience across distributed workforces.

“In Clarilis we have found an ambitious business with a market-leading solution and exceptional customer satisfaction as a result of its fully managed service. It exemplifies the type of technology-driven and scalable business model that our investment team look for. We’ve been impressed by the impact that Clarilis has already had in the market and as the business expands, particularly into the South East Asian market, we are excited to be bringing our experience to bear and to help facilitate its growth.”

Tim Levett, Investment Chairman of Mercia Northern VCTs, commented:

“We are pleased to be investing once again in this leading LegalTech business, particularly in this current environment where the rapid adoption of user-friendly consumer software has fundamentally changed user expectations within enterprise. Regardless of the complexities of any business process, elegant automation and consumer-grade UX are the critical success factors that have set Clarilis and its platform apart, especially filling the void left by legacy software in this sector.  

“Mercia’s strong tech and SaaS investment credentials and experience combined with our ability to invest through the lifecycle of a business will be important to support the team at Clarilis as they continue to scale the business.”

James Quinn, CEO and co-founder of Clarilis, added: “It’s fantastic to have the continued support from the investment team at Mercia Asset Management and I’m really pleased they’re backing us again.  We are also delighted that Gresham House has chosen to invest.  Gresham House were the clear choice here given Henry Alty and James Hendry’s in-depth knowledge of the LegalTech space and excellent insight.  The Gresham House team also share our vision for the development of the Clarilis platform going forward. 

“This investment will provide the resources required to bring significant enhancements to our platform and to further scale the Clarilis team both in the UK and abroad. 

The uniqueness of Clarilis’ intelligent drafting platform and managed service is resonating with organisations globally – particularly as current market conditions highlight the importance of technology that can provide a strategic advantage.”

A biotech company which is developing new treatments for patients with serious spinal conditions has completed a £2.25m funding round led by Mercia Asset Management to help to continue its ground-breaking research and bring its first products to market.

Locate Bio has secured the investment from Mercia’s own balance sheet, its EIS fund and the MEIF Proof of Concept & Early Stage Fund, which is managed by Mercia and part of the Midlands Engine Investment Fund, and the Future Fund.  Together with earlier funding rounds from Mercia and MEIF, it brings the total raised by the company to over £8m.

Locate Bio’s first product, which is at the pre-clinical development stage, will help patients who require spinal fusion surgery, where bones are permanently joined together to overcome low back pain. It uses a type of bone protein to remove the need for a bone graft. Its second therapy will be for the biological renewal of the intervertebral discs and will help those suffering from degenerative disc disease, a painful condition affecting 33 million people in the US and EU.

Locate Bio is a spin-out from the University of Nottingham and based on the research of Professor Kevin Shakesheff, a world-leading expert in regenerative medicine. The company, which initially started out as a contract research organisation, first received investment from Mercia in 2018.

John von Benecke, CEO of Locate, said: “I am delighted by the continued support of our lead investor. This investment will allow us to maintain the excellent progress with our lead product and further the development of a pipeline of synergistic products.”

Dr Ian Wilding, Chairman of Locate said: “This investment comes at an important time for the Company as it enters an exciting phase. Despite the uncertainty and disruption that COVID-19 has brought to so many industries, the Locate team have relentlessly executed against its aggressive timelines and the additional funding announced today is a welcome validation of the progress that has been made.”

Peter Dines, Chief Operating Officer of Mercia, said: “We are very pleased to continue to support John and the team at Locate. Their lead product has the potential to disrupt a $3bn market, and we remain excited by the prospect of helping to build a world-leading business.”

Ken Cooper Managing Director, British Business Bank, added: “We are pleased that the MEIF Proof of Concept fund has been able to support further investment into Locate Bio.  Along with the bank’s other programmes the MEIF funds are investing to support SMEs in the region and are still very much open for business. This second round of funding recognises a business which has continued to make good progress despite the difficulties caused by Covid 19.”

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

One of the challenges that we at Mercia know that small businesses face, is accessing funding. And now, during COVID-19, this has just become even more stressful as hundreds of thousands of businesses are unable to access emergency funding, as banks are battling to process applications or are turning down customers – oftentimes without giving any reasons.

To recap, there are a number of different loans that are available, including our own CBILS, and it is essential that these loans are being made available quickly. Or that a response to these applications are made in a speedy manner, so that small business owners are not left wasting valuable time when they can least afford it.

The loans that are available currently include:

Coronavirus Business Interruption Loan Scheme (CBILS)
For small businesses with a turnover of less that £45m per year. These small business in the UK can borrow between £25,000 and £5m – in this instance from Mercia – with the Government guaranteeing 80% on each loan and covering the first 12 months of interest payments.

Bounce Back Loans
Small business can borrow between £2,000 and £50,000, and the good news is that these small businesses can access this cash within days. Interest free for the first 12 months, these loans can be applied for online and the process is short, fast and simple.

Other options that may help SMEs and even micro/small businesses include Swoop Funding that can help with the funds mentioned above, as well as other grants or funding solutions that small businesses may find as life-saving or a healthy boost during this pandemic, and indeed for future growth when we get back to business as usual.

 

Apply now for CBILS

At Mercia we want ambitious small businesses and start-ups to succeed, and for them to succeed we want to make sure they are making the right decisions when searching for finance or debt investment. SME loans are available with  Mercia and are important if you are looking to scale your premises, grow your business or bridge cash flow gaps. We will also provide small business loans to leverage buyouts and/or acquisitions.

Make sure you choose the right small business loan and you are satisfied with your repayment package. This must to be right for you and your small business, or else this can put you in an awkward situation.

Many SMEs make the wrong choice with their chosen loan, so this is where having access to a start-up loan calculator can help you.

You need three key pieces of information about your loan to begin:

  • The amount of funding required
  • The repayment term
  • The interest rate of loan.

Then you need to go online, where in many instances you will get a quick answer, but we would suggest that if you access small business loans through this route, check the small print and make sure you understand if the loan is unsecured or secured. At Mercia, we would prefer to talk to you. Not only to find out more about your small business, but also to understand what your future growth ambitions are, and how our ‘Complete Connected Capital’ can help you to fully realise your small business’ potential.

 
Talk to us

With over 5.6 million SMEs in the UK, these small businesses make up 60% of all private sector employment and a turnover in the region of £2 trillion. These small businesses provide the back bone to the UK economy and if these SMEs begin to struggle with cash flow and productivity, the effect could be huge. With central Government not prioritising their well-being and growth, these micro to small businesses need nurturing on a wider scale.

Those small businesses, who are based outside of London, are finding it increasing difficult to get the support that is available through government channels, and with 40% of SMEs saying that they aren’t receiving enough government cash to cover liabilities for the next month, this is where we believe Mercia can help.

We are partnered with the British Business Bank and the region’s LEPs, and as flexible finance provider, based in the regions to supply debt finance, loans and the type of support that will allow small businesses reach their full potential.

Apply here

Small businesses are the engine of the UK economy, but it has to be said that the central Government does not necessarily prioritise their wellbeing and growth, which it should if SMEs are to continue to help the economy grow further. As much as it is the issue of funding and providing small businesses with the loans, or the right structures to access loans, debt finance and other small business investment, these micro to small businesses need to feel supported on a wider scale.

This support can include mentorship, development programmes, networking and co-working spaces – all of which are crucial for small businesses to grow and succeed in the UK economy and beyond. And, given that there are there are over 5.6 million SMEs in the UK which have a combined turnover of £2tn, it’s clear that the government must do more to benefit small-business owners.

It is not just about start up loans or funding for small businesses either. Ambitious SMESs, and those typically based outside of London, face numerous barriers to the support that is readily available in the southern regions of the UK, and that’s why we believe Mercia is a critical partner in conjunction with the British Business Bank and the region’s LEPs. We see ourselves as a flexible finance provider, based in the regions to supply debt finance, loans and the type of support that will allow small businesses reach their full potential.
 
Apply here