Proactive specialist asset management
We provide venture, private equity or debt finance to regional businesses with growth ambition.
Mercia’s EIS fund is a tax-efficient technology fund, optimised to source, support and scale UK growth enterprise across key sectors in which we have deep expertise. The Fund aims to triple (3x) invested capital in five to seven years (including tax reliefs), by the creation of a diverse, regionally focused technology fund.
Target portfolio size
Approximately 12 companies
Each EIS fund aims to be fully invested within 12 months of the fund closing
Mercia aims to triple invested capital (including income tax relief and loss relief)
We always have an EIS Fund open, with funds closing at the end of March, June and December of each year
Investments are made into sectors
which have modest capital requirements but high growth potential
Members of our investment team have been giving updates on Mercia’s EIS portfolio companies, as well as explaining a little more about our co-investment model.
We firmly believe in both the resilience and the value that resides within SMEs located in the UK’s regions. Mercia has been working hard to back exceptional businesses and, in part, redress the funding imbalance. As a result, we are proud to be one of the most active investors in the UK regions, fueling our own growth in the provision of private equity, venture capital and debt – what we term our ‘Complete Connected Capital’
“Companies that pay attention to environmental; social and governance concerns do not experience a drag on value creation – in fact, quite the opposite”
London and the South East have a signiﬁcant oversupply of capital creating high pre-money valuations. The UK regions offer exciting deals with businesses that are priced sensibly and have relatively modest capital needs that we can, if we choose to, support solely from our own means.
Over 100 colleagues have strengthened Mercia’s business model through their combined business expertise, geographic and investment knowledge. Mercia has eight regional offices across the UK, as well as two other additional locations from our staff can be based. Our team has been our priority during 2020 and in response to COVID-19, we have ensured that we safeguarded the team’s health and wellbeing.
Our Platform provides access to high-quality business leaders, advisory teams and operational specialists to offer relevant support our portfolio.
Powerful relationships and deeply embedded ecosystems provide unparalleled access to a wealth of opportunities across the regions. From our 19 university partnerships to our non-executive networks, we are well placed as the investment partner of choice.
Leading supplier of native and recombinant viral and bacterial antigens, antibodies and immunoassays. We first invested in 2013 via MGF1 (EIS Fund). Delivered a circa 8.6 times return for the EIS Fund.
SaaS tool providing organisations with data and systems to improve performance management. We first invested in 2018 via MGF8 (EIS Fund). Acquired for up to £26m in October 2020 which delivered a circa 8 times return for the EIS Fund.
Helps organisations improve the performance of their sales teams giving managers insight into team members’ conversations. We first invested in 2016 via MGF5 (EIS Fund). Delivered a profitable return for our investors.
Specialises in advanced technologies for cell and gene therapy. SEIS/EIS invested between 2013 and 2016, followed by Mercia PLC, and delivered a return of up to 20 times cost.
With operations in both the UK and the US, Sense is focused on the development of instrument-free molecular diagnostics delivering true point-of-care molecular testing.
In October 2019 Sense raised £10.5million in Series A investments and concurrently secured a grant of £1.8million from Innovate UK.
In March 2020, Sense announced an accelerated programme to launch the world’s first instrument-free, point-of-care molecular diagnostic test for COVID-19, partnering with Phillips-Medisize (a leading global medical device innovator, developer and manufacturer, owned by Molex) to scale up production of its testing to meet the growing demand for rapid diagnostics. In October of the same year the company also announced successful series B investment to support their scale up plans.
Voxpopme, Birmingham-founded, but US-based, Voxpopme is a video insights platform that provides innovative video analytics for internationally renowned clients such as Microsoft, Shell, Coca-Cola, Verizon and Expedia.
The business has demonstrated continued growth in ARR over the last six months to 30 September 2020 against the backdrop of COVID-19. Post period end in November 2020, Voxpopme secured a syndicated investment of £3.1million in which Mercia contributed a direct investment of £0.8million. This company demonstrates Mercia’s Complete Connected Capital in action as it has received investment from our EIS Funds, the Northern VCT Funds as well as Mercia’s balance sheet.
Any EIS or SEIS investment should be considered to be a medium to long-term investment, and this asset-class is inherently high-risk and illiquid.
Mercia models for a third of its EIS companies to fail, and operates a ‘fail fast’ policy, which means that we will not provide follow-on funding to failing companies. This is good industry practice and means more capital is deployed into the remaining successful companies. Our fail fast policy has resulted in a total of fifteen businesses crystallising a loss, but interestingly only seven of these companies have ever received EIS investment (the others have received only SEIS).
The companies that do succeed are modelled to deliver high-multiple cash returns, but this process can take a long time, which makes the exit process even more important.
However, there may be options for alternative exits, depending on how the company progresses.
These notes should be read in conjunction with the above performance data.