Mercia Technologies PLC (“Mercia” or the “Company”), a Midlands based leader in the funding and commercialisation of technology businesses in the UK, has raised £70m before expenses from an institutional placing and will be admitted to AIM with a market capitalisation of £106m.

Mercia’s business is the creation, funding and development of technology businesses nationally with an emphasis in the Midlands and the North of the UK. Mercia brings technology transfer, company formation, incubation, commercialisation and investment, to technology ventures.

Mercia has a well seeded portfolio and pipeline of investments. The Company has a direct investment in 11 operating companies and access to a portfolio of 38 businesses through its third party funds, managed by its wholly owned subsidiary Mercia Fund Management (“MFM”).

Trading in Mercia’s shares is expected to start at 8.00am on Thursday 18 December 2014. (Ticker symbol MERC)

Cenkos is acting as the Company’s Nominated Adviser and Broker.

Strategy

Mercia’s strategy is to provide capital, infrastructure, accommodation and management support to accelerate the development and enhance value in selected technology businesses with a focus on:

  • UK technology sectors which offer investment prospects with high growth potential including:
    • digital
    • electronics and hardware
    • advanced materials, engineering and specialised manufacturing
    • sub sectors within life sciences.
    • investing across the UK, with an emphasis on the Midlands and the North
    • businesses with modest capital needs
      • businesses which combine technology and service provision, are rich in intellectual property, are scalable and require relatively modest capital infusion
      • flexible funding providing early stage businesses with seed and early stage follow-on capital through MFM’s third party funds and as the businesses mature at a later stage, development capital from its own resources to scale the ‘emerging stars’
      • flexible deal sourcing including (but not exclusively) from its collaborative relationships with nine UK universities which provide access to broad range of opportunities.

Reasons for Admission and use of proceeds

The placing and Admission will assist Mercia in its development by:

  • giving it access to the capital required to scale its direct investments and other emerging stars from the MFM portfolio
  • supporting regional growth, both organic and through selective complementary acquisitions
  • enhancing its scalable platform
  • enabling the recruitment of experienced commercialisation professionals including a CIO
  • expanding its number of university partners.

Mercia’s net placing proceeds of £66m are to be used:

  • 70% to 80% for investment in ‘emerging stars’, being:
    • existing direct holdings
    • other investments emerging from MFM
    • investing behind portfolio companies which can become sector consolidators
    • 20% to 30% in opportunities to scale:
      • strategic acquisitions and pipeline development
      • organic expansion.

Mark Payton, Chief Executive of Mercia Technologies PLC, said:

“We are entering the next phase of our growth as a leading national player in the development of technology businesses in the UK, by taking advantage of the significant opportunity in the Midlands and the North to scale the provision of efficient and targeted capital and support.

We provide a platform to accelerate the development of high growth technology companies in selected sectors with the goal of exiting the investments over time, generating attractive returns and realising value.

“As well as providing us with substantial funds to invest in our established portfolio of emerging stars, this listing will raise our profile and enable us to expand geographically whilst further strengthening our team to support our ambitious but realistic growth plans.”

Enquiries:

Mercia Technologies PLC (www.merciatechnologies.co.uk)

+44 (0) 330 223 1430

Mark Payton, Chief Executive Officer

Martin Glanfield, Chief Financial Officer

Cenkos Securities

+44 (0) 20 7397 8900

Ivonne Cantu / Michael Johnson

Instinctif Partners

+44 (0) 20 7457 2020

Adrian Duffield / Kay Larsen

Background

Mercia Technologies’ vision is to become a leading national player in the creation, funding, incubation and development of high-growth technology businesses with an emphasis on the Midlands and the North of the UK.

Mercia has a flexible sourcing model which provides Mercia with access to a large number of investment opportunities in its areas of focus. Mercia has collaborative relationships with nine universities (including the Universities of Birmingham and Warwick) and research centres in the UK, allowing Mercia to access their flow of spinout and early stage investment opportunities as well as a broad professional network through its management and associates.

Mercia’s model is to provide early stage businesses with capital, infrastructure and management support to accelerate their development and enhance their value. Mercia’s strategy is to: (i) provide first pathfinder/seed capital from its third party funds under management; and (ii) at a later stage, provide development capital from its own resources to scale ‘emerging stars’ with the goal of realising value for Shareholders through an exit over time.

Mercia’s third party funds under management

MFM, a regulated fund management company, manages six funds (the “MFM Funds”) with a total of circa £22m under management (“FUM”). Mercia Technologies will acquire MFM shortly before Admission pursuant to the terms of the MFM Acquisition Agreement.

The MFM Funds invest in early stage companies ranging from university spinouts to more developed businesses, not exceeding £10m in annual revenue at the date of initial investment.

Following an initial investment the MFM Funds have the ability to make follow-on investments as the businesses develop. As at 4 December 2014, the MFM Funds had invested circa £16 million and had a combined portfolio of 38 businesses across a number of sectors at varying stages of business development (the “MFM Portfolio”).

Mercia’s direct investments

Mercia provides development capital from its own resources to scale up businesses in line with its investment policy. Mercia’s strategy is to make direct investments into companies within the MFM Portfolio which the Board considers to be ‘emerging stars’ and in other opportunities arising outside of the MFM Funds.

Strategy and business model

Headquartered in the West Midlands, Mercia’s vision is to become a leading national player in the creation, funding and development of technology businesses with an emphasis on the Midlands and the North of the UK, regions which the Directors believe have been historically underserved by investment capital and incubator services providers, compared to the South of the UK.

The Directors’ belief is supported by analysis which identifies a lack of capital for businesses outside the South East and London, where there are approximately 19,000 small and medium enterprises. Between 2011 and 2013 there was an 18% increase in high growth small businesses and Mercia hopes to take advantage of this rapid expansion.

Mercia’s business model is to invest in and provide a platform to accelerate the development of early stage companies in its chosen sectors with the goal of exiting the investments over time, generating attractive returns and realising value for Shareholders.

There are numerous companies and other organisations seeking to provide technology transfer, incubator services and funding to technology spinouts including incubators, venture capital funds, technology transfer offices, angel investors and other boutique investors. These entities operate a variety of business models and cover a broad range of sectors and geographies. Mercia seeks to differentiate itself from other market participants in a numbers of ways, including:

  • Sourcing flexibility – Mercia sources technology and investment opportunities from both its university relationships and from the broad professional network of its management and associates. This gives the Group access to a broader pool of opportunities particularly in the digital sector, including the gaming, gamification, e-commerce and fintech sectors. Circa 50% of the MFM Portfolio and of the Mercia direct investments have been sourced from non-university contacts.
  • Funding flexibility – Mercia has the ability to provide capital from new venture creation through to expansion and development capital. MFM, through the MFM Funds, provides seed, early stage and development capital while Mercia from its own resources, provides capital to scale ‘emerging stars’. The Directors believe that Mercia’s flexibility in funding, sourcing and support can have a material impact on accelerating a company’s development and in capturing the inherent value in the businesses it supports for the benefit of Shareholders.
  • Sector focus – Mercia focuses on some of the highest growth sectors of the UK including: (i) digital; (ii) electronics and hardware; (iii) advanced materials, engineering and specialised manufacturing; and (iv) life sciences. In addition to their growth potential these sectors have been chosen taking into consideration the sector expertise of the investment team and their relative low capital intensity. Within these sectors, Mercia aims to invest in businesses with a technology team recognised as leaders in their field and which have an underlying scalable technology, capable of addressing multiple applications and on occasions acting as consolidators in their market.
  • Flexible support – Mercia can provide a broad range of support to its investee companies throughout their development. These include accommodation, company secretarial and accounting support, management mentoring and recruitment, business planning and development, governance and corporate finance.
  • Regional focus – Mercia intends to take advantage of the general equity gap within the UK and lack of investment in regions outside London and the South East of England. It believes that it is well placed to do so given the geographic diversity of its portfolio, with investments in the Midlands, the North, the South East and Wales and its track record in the region.
  • “Fail fast” policy – investment into the MFM Portfolio companies and the direct investments are based on performance milestones. When an investment fails to meet those milestones, support is removed and the investment is exited to protect further loss of capital. This allows Mercia to focus capital and resources on “emerging stars”.
  • Leverage of third party specialist funds – MFM’s third party specialist funds invest in seed and early stage opportunities which represent a pipeline of investment opportunities for Mercia. Mercia seeks to include pre-emption rights and permitted transfer provisions when making investments through the MFM Funds to facilitate follow-on investments and/or transfer of holdings from the MFM Funds to Mercia, as the businesses develop.

Mercia’s strategy to achieve its goal of becoming a leading player of scale in the sector includes:

  • expanding the Mercia team through the selective recruitment of experienced professionals within its sector focus
  • continuing to develop relationships with universities, accelerators and incubators
  • seeking acquisition or investment opportunities of complementary businesses
  • increasing its geographic reach, including establishing a London office which will give Mercia better access to the gaming technology hub and to co-investors
  • continuing to use its MFM third party fund platform to raise further funds to invest seed, early stage and development capital into new ventures.

Investing strategy

In respect of direct investments made by Mercia, the Directors will apply some or all of the following investing strategy to achieve the investing policy:

  • a pre-identified strong market potential and high opportunity for growth
  • the identification of likely exit opportunities, such as trade sales, flotation or partnerships
  • the technology team should be recognised as leaders in their field
  • there should typically be an underlying enabling and scalable technology, capable of addressing multiple applications
  • there should be defensible intellectual property and ideally comprehensive patent protection, with the ability to enhance this position as the investee company develops
  • the technology is typically projected to be no more than two to three years away from demonstrating incremental value to third party investors or trade buyers or being capable of generating revenue streams for the business.

As at 4 December 2014, the MFM Funds had investments in 38 companies, a number of which are considered to be ‘emerging stars’ by Mercia. Through a combination of their progress and potential, of the 38 companies in the MFM portfolio, Mercia has direct investments in 10 of them, plus a direct investment in a Leeds University spin out.

Overview of Mercia direct investments

Science Warehouse

Science Warehouse was established in 2000 as a spinout from the University of Leeds. Science Warehouse has developed a cloud-based procurement, catalogue and spend analysis platform which gives the customer control of the purchasing cycle from requisition through to payment helping to deliver cost savings and to manage spend.

Allinea Software

Located in Warwickshire, Allinea Software is a University of Warwick spinout in which Mercia Fund Management was a founding investor. Allinea is a leading vendor of tools for parallel software development and high performance computing.

nDreams

nDreams was formed in 2006 by former Eidos Creative Director, Patrick O’Luanaigh. Mercia first invested in nDreams in March 2014 through the MFM Funds. nDreams is an innovative game developer and publisher specialising in virtual worlds and virtual reality (“VR”). The first VR headset was launched by Samsung in September 2014 and includes circa 20 demonstration games, two of which are developed by nDreams with one of the games, Gunner, featured by Samsung as one of the primary demonstrators of the head set’s capabilities.

Native Antigen (“NA”)

Originally a University of Birmingham spinout, NA is an Oxford-based contract service provider specialising in the R&D and scale up manufacturing of highly pure viral and bacterial native antigens. NA’s antigens are used primarily by pharmaceutical and IVD manufacturers in vaccine research and serology where high specificity and sensitivity are vital. As well as offering antigens from a rapidly expanding portfolio, NA undertakes bespoke product development and partnering.

Ventive

Ventive was formed in 2011 and manufactures energy efficient property ventilation devices which are installed into chimney cavities. Ventive has developed a range of award winning passive heat recovery ventilation products which improve air quality without the need for an additional power source. The first products are now selling in the UK market, in both the social and private housing, new build and retrofit sectors. In addition, the product is simple to install and has no moving parts requiring minimal maintenance.

Concurrent Thinking

Located in Birmingham, Concurrent Thinking is a Data Centre Infrastructure Management solution provider founded in 2010. The software platform is designed to drive operational and management efficiencies in data centres. It monitors servers, power supplies and air conditioning systems, resulting in significantly reduced energy costs within a data centre.

Nightingale-EOS

Nightingale-EOS was founded in 2005 to develop innovative laser based technology for measuring thin film coating thickness on curved surfaces. The company’s patented n-Gauge metrology product is expected to be a major step forward for in-line metrology of thin-film coatings on small engineered parts, such as cardiac stents, orthopaedic prosthetics and contact lenses.

Warwick Audio (“WA”)

WA is a University of Warwick spinout incorporated in 2002. WA specialises in the development of flat, flexible loudspeakers which when compared to conventional speakers have a reduced cost of manufacture, are extremely lightweight, thin and use circa 10 per cent of the power.

Kwanji

Kwanji is an early stage company developing an online platform to remove the complexities, inefficiencies, manual data entry and high fees which Small and Medium Enterprises (“SMEs”) suffer when making or receiving international business payments. Kwanji aims to provide SMEs with access to the same foreign exchange (forex) rates as those enjoyed by larger businesses as well as saving them time.

Smart Antenna (“SA”)

Based in Birmingham, SA is a spinout company from the University of Birmingham established in 2013 based on conceptual antenna technology developed by the chief technology officer, Sampson Hu. MFM invested in SA in the same year. SA has designed, developed and patented a pioneering smart antenna technology which provides an efficient and low cost antenna solution to the mobile PC, tablet and portable device market. The mobile market alone comprises approximately 2 billion handsets manufactured per year.

University relationships

Mercia has collaborative relationships, on a non-exclusive basis, with the following nine universities and research centres in the UK to access their flow of spinout opportunities.

  • Aston University
  • Birmingham City University
  • The University of Birmingham
  • Coventry University
  • Keele University
  • Leicester University
  • Staffordshire University
  • University of Warwick
  • Wolverhampton University.


IMPORTANT NOTICE

This announcement has been issued by, and is the sole responsibility of, the Company. This announcement is for information only and does not constitute an offer or invitation to subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction in which such an offer or solicitation is unlawful, including without limitation, the United States, Australia, Canada, South Africa or Japan.

This announcement does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the admission document (the “Admission Document”) to be published on or around 15 December 2014 by the Company, in connection with the proposed placing and admission of the ordinary shares in the capital of the Company to trading on AIM, a market operated by London Stock Exchange plc. Copies of the Admission Document will be available following its publication during normal business hours on any day (except Saturdays, Sundays and public holidays) from the registered office of the Company.

FORWARD-LOOKING STATEMENTS

Certain statements included in this announcement may contain forward-looking information concerning the Company’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Company operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company’s control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Nothing in this announcement should be construed as a profit forecast and no part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company, and must not be relied upon in any way in connection with any investment decision. Any forward-looking statements made herein by or on behalf of the Company speak only as of the date they are made. Except as required by the FCA, the London Stock Exchange or by applicable law or the AIM Rules for Companies, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Virtual reality is set to deliver the next seismic change in gaming, creating a multi-billion dollar sub-set of the industry, according to Mercia Fund Management’s head of digital Mike Hayes.

The long-talked about technology got a shot in the arm back in March when Facebook bought out virtual reality start-up Oculus VR for $2 billion (£1.25 billion). With Samsung expected to release its first virtual reality headset by the end of the year and Apple not far behind, the technology is expected to take mobile gaming by storm.

With such powerhouses – and such money – behind it, Hayes (pictured), believes it is a case of when, not if, the virtual reality applications take off.

Hayes brings a unique perspective to technology investing, having previously been the chief executive of Sega’s Europe and America businesses. He oversaw the rebirth of the Japanese giant as a multi-platform software company and launched one of the first ever games for the iPhone, Super Monkey Ball.

This article appeared first and in full on Citywire’s Wealth Manager.

View full article

By Mike Hayes- Head of digital

The gaming sector is a dynamic and fast growing sector – in 2013 the market was worth £2.7 billion in the UK, (excluding hardware sales), and is expected to grow to £4 billion by 2016. At Mercia we want to be at the heart of investing in UK gaming start-ups.

In the past five years, we’ve seen how the games industry has undergone a seismic transition.

For 30 years the industry produced either console/handheld games under licence from a specific platform holder, e.g. Nintendo, Sega, Sony, Microsoft etc. or PC games. Combined these consistently represented over 95% of game experiences.

Since the introduction of smart phone platforms, improved broadband connectivity and also the consumer adoption of low end social games the market has changed.

Traditional console and high end PC games, (physical media), typically rely heavily on sequels and massive production and marketing budgets ($25 million+), meaning new entrants can be locked out of the market, particularly at the lower investment end of the business. (There have been very few notable new publisher entrants into this market sector in the past five years).

Since the late noughties however the games market has been opened up in a way we’ve never seen before. Whether it is smart phone game apps, social games, gambling apps, lower end but highly addictive PC games, serious game applications, game platforms etc. the development environment has never been more vibrant or accessible.

By 2016 over 40% of all games played, (by revenue), will be via digital platforms such as Steam for PC, Live for Microsoft, PSN for PlayStation and so on. A staggering 20% of gaming revenue will be generated by mobile apps.

As traditional developers and publishers close, many new innovative small developers have begun to spring up and create a vibrant development community using the new open development and distribution platforms. These new developers are appearing regularly as the cost of entry is small, and the prizes are huge. And the UK remains one of the most creative and innovative countries for game and game associated development with world-class game engineers.

For many new developers and publishers looking to break into the market, it’s not just funding that presents a problem – management know-how to take their company to the next level and sector expertise can be critical. Many start-ups rely on family and friends, angels and regional grants and while these are of course valuable sources of funding, the sector expertise can be limited.

At Mercia, we believe that we’re different. Our investment team has a wealth of expertise in this specific sector – so we are able to offer in-depth understanding of not just funding but also the barriers that interactive, digital gaming businesses have to overcome.

We have a burgeoning gaming portfolio – with six investments carried out to date in 2014. One of our portfolio, nDreams is well and truly cementing its position in the Virtual Reality space, and aims to have two titles available alongside the launch of the Gear VR head-mounted display (HMD), expected later this year.

Sample gaming deals have ranged from a £200,000 SEIS/EIS investment in character focussed mobile apps builder, No Yetis Allowed, to a £300,000 EIS investment in the UK-based independent studio behind the popular online multiplayer football management game, SoccerManager.com. Recently we have just closed a £200,000 SEIS/EIS round with Edge Case Games an exciting and innovative player in the PC market and the company behind “Strike Suit Zero”.

This is just the tip of the iceberg for our portfolio companies and investors – watch this space for the most exciting gaming start-ups.

Edge Case Games is the team behind the popular space flight combat game Strike Suit Zero, downloaded and enjoyed by well over a million gamers on PC, XBOne and PS4.

Formed by two industry veterans, James Brooksby and Chris Mehers, and supported by an experienced creative team based in Guildford, Edge Case Games is moving to the free to play games as a service model, focusing on the core PC gamer audience. First steps will be to focus on building a vibrant engaged community around its first soon to be announced free to play game.

Chris Mehers, co-founder of Edge Case commenting on the investment said: “These funds will be used to expand the development team, and create the right launch platform for our first free to play game.” He added: “We chose Mercia as our funding partner as their experience and depth of knowledge in the digital entertainment sector means that they will add value way beyond simply being a financial investor.”

Mike Hayes, head of Mercia Fund Management’s Digital Division added: “Digitally delivered free to play games as a sector is enjoying explosive growth with games like League of Legends, World of Tanks and many more delivering hundreds of millions of dollars of high margin revenue, disrupting the traditional retail and digital pay to play incumbents. Investing in this sector with an expert team is a natural choice for us as we expand our digital portfolio.”

Mercia, the business incubator and investor, recently launched the Mercia Digital Fund, to complement its suite of growth funds that uses the hybrid structure for tax-efficient investing via the Enterprise Investment Scheme (EIS) and Seed EIS (SEIS). Mercia invests in a diversified portfolio of technology business with high growth potential to include innovative digital companies.

Mercia Fund Management is kicking off the new football season with a £300,000 investment in Soccer Manager. Soccer Manager Ltd. is the UK-based independent studio behind the popular online multiplayer football management game, SoccerManager.com, which was released in 2006.

Soccer Manager will use the investment to finalise production of new sports related titles, grow existing development capacity and gain third party support and expertise. Industry expert and former Director of Brand Marketing at SEGA, Matt Eyre, has now become involved in this exciting project to help grow the Soccer Manager brand.

The business is just one of Mercia Fund Management’s growing portfolio of gaming companies which benefit from both investment and also sector expertise from former SEGA CEO Mike Hayes (Mercia Investment Director) and ex-Codemasters MD Nick Wheelwright (Mercia Investment Panel member).

Andrew Gore, CEO of Soccer Manager said: “We are excited to be working with Mercia Fund Management due to their significant industry experience and strong network of contacts.”

Mike Hayes, head of Mercia Fund Management’s Digital Division added: “The UK is undoubtedly among the world leaders in key digital industries including the fast evolving games sector. With over nine million people registered on SoccerManager.com since its launch and over 600,000 app downloads since December 2014, this is already proving to be a popular game.

“The vision behind the project and proven success to date makes Soccer Manager an ideal addition to our diversified portfolio of innovative gaming companies with disruptive technologies.”

Mercia recently launched the Mercia Digital Fund uses the hybrid structure for tax-efficient investing via the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). Mercia invests in a diversified portfolio of innovative digital companies with high growth potential.

Technology investment specialist Mercia Fund Management is launching a new fund offering tax-efficient investment in the UK’s fast-growing digital economy.

The Mercia Digital Fund will utilise the hybrid structure of Mercia’s previous three tax efficient funds, combining the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), to invest in a diversified portfolio of innovative digital companies with high growth potential.

Mercia’s highly experienced investment team have strong relationships in the technology sector, including long-term partnerships with eight universities and can access opportunities not generally available to private investors.

The Mercia Digital Fund will target a compound annual growth rate of up to 50% (excluding tax advantages) and investors can expect to realise their portfolios between three and seven years. The fund launches on 11th August and the minimum investment is £25,000 if investing via a financial intermediary or if taking regulated advice.

The tax advantages available through EIS and SEIS investments include initial tax relief of either 30% or 50%, loss relief and zero Capital Gains Tax on returns once qualifying shares have been held for three years.

Mark Payton, Managing Director of Mercia Fund Management, said: “We believe there are a number of compelling reasons for launching a fund of this type in the current climate.

“First and foremost, digital is the UK’s fastest-growing sector and is already the third biggest contributor to the nation’s economy.

“The sector boasts three times higher employment growth than the wider economy, with 25% greater revenue growth than traditional firms, and a Gross Value Added (GVA) per employee of £83,000, the output within digital is nearly twice the UK average for all sectors.

“Figures from 2010 to November 2013 show investment returns in digital technology dwarfed other sectors, with 17 UK tech flotations with an average return of 101.7%, compared with 1.8% across 256 listings on the London Stock Exchange.

“We think this combination of factors makes for an especially attractive proposition, particularly in light of the additional tax advantages available under EIS & SEIS which help to significantly offset the associated capital risk whilst enhancing prospective investment returns.”

Key sub-sectors within digital that the Fund will target include:

Fintech – financial technology – in which global investment has more than trebled during the past five years
The Internet of Things (IoT) – focused around the interconnection of everyday devices through the internet, allowing automated data interaction
E-commerce, which represents Europe’s fastest-growing retail market
Gaming and gamification, in which game technology is used in non-game contexts.
Payton said: “The UK is undoubtedly among the world leaders in key digital industries such as fintech, e-commerce and the fast evolving gaming categories.

“Recent research has also shown we have the highest density of start-up companies in the world – and if these are to fulfil their promise they will need both capital and support.

“Given the ability of the EIS/SEIS structure to convert a traditionally high-risk/return strategy into a moderate-risk/high-return opportunity, we believe this is one instance where backing Britain could prove very rewarding indeed.”

Free-to-play game developer secures SEIS investment package

Henley-in-Arden, 9 June 2014. Venture capital fund manager Mercia Fund Management (MFM) has announced a Seed Enterprise Investment (SEIS) in game developer and publisher Dab Gaming.

Dab Gaming builds and operates mobile free-to-play games and has recently launched its debut game BingoDab, bringing the excitement of playing real world bingo to mobile and tablet devices. The game features real dabbing of bingo cards and rewards for the speed and accuracy of your dabbing along with other surprises, awards and challenges. In the future, the company is looking to develop further free-to-play mobile products in the casino and sports betting verticals.

Dab Gaming has received £150,000 funding from Mercia Fund Management after completing its first round of funding, and combined with a further injection of £520,000 from private investors as the company looks to build and scale its mobile driven business model.

The business is just one of Mercia Fund Management’s growing portfolio of gaming companies benefitting from both finance and also sector expertise from former SEGA CEO Mike Hayes and ex-Codemasters MD Nick Wheelwright.

Darren Clarke, Co-Founder of Dab Gaming, commented on the deal: “The funding from Mercia Fund Management provides the financial boost we need to launch our business-to-consumer venture and realise our growth ambitions. Marketing, user acquisition and app store optimisation are our main priorities leading up to the launch of our mobile free-to-play games. In addition to this, the investment enables us to effectively support our team of developers, technical and marketing professionals.”

Darren added: “Mercia Fund Management has been extremely supportive and professional, and the specific gaming sector experience that the fund manager offers means that they bring more than just pure investment to the table.”

Dab Gaming was founded by three real money gaming industry professionals. Using its own in house technology its free-to-play products allow users to access full multi-player gaming in real time via their mobile handsets. Dab Gaming products feature a host of advanced features and functions including earning experience points, levelling up, tournaments, leader boards, sharing items with friends, daily challenges, jackpot games, progressive games and winning of additional items within the game.

The company already has a B2B sales agreement with Nektan, a Gibraltar-based real money casino provider. The partnership will see the resale of games to clients throughout Europe and the US.

Mike Hayes, head of Mercia Fund Management’s Digital and E-commerce Division added: “Funding provided by the Seed EIS has made it possible for exciting and scalable businesses like Dab Gaming to progress. Fortunately, in the recent budget, the Chancellor has backed SEIS funding for start-ups, so we envisage more gaming companies to benefit from this funding, just as Dab Gaming is.”

ENDs

Entrepreneurs take advantage of new tech start-up hub in UK gaming hotspot

Henley-in-Arden, 13 May 2014. Mercia Fund Management (MFM), a leading provider of investment and business support services for fast-growing technology companies, has created a high quality workspace targeted at early stage gaming businesses at its Forward House head office in Henley-in-Arden.

Mercia Fund Management is a highly active investor in the UK gaming sector with a number of recent investments including nDreams and No Yetis Allowed. Mercia Fund Management also recently enhanced specialist gaming expertise within the business by appointing executives Mike Hayes, former CEO of SEGA and Nick Wheelwright, former CEO of Codemasters.

Mike Hayes explained why he is expecting initially to attract gaming start-ups from Leamington Spa, Coventry and the wider West Midlands area. “Tenants at Forward House Workspace benefit from access to an established, knowledgeable and active investor in the games and digital market. We’re offering well-equipped office space and unrivalled support for new and burgeoning business ventures in the UK gaming sector.”

Mercia Fund Management is looking to attract entrepreneurs who are at an early stage with scalable ideas even if they are not currently part of the venture capital fund investor’s portfolio.

Nick Wheelwright concluded: “Forward House Workspace offers a superb place for people working in the games industry. Not only will they benefit from great office space and the ability to work alongside other games companies, but they have direct access to experts in finance, funding, business operations, marketing and gaming. An exciting place to be for anyone in gaming, especially early-stage entrepreneurs.”

From hot desks to larger offices, there are several options available for start-up gaming companies. For further information please contact: Josh Levy, Mercia Fund Management, joshl@merciafund.co.uk, +44(0) 330 223 1430. Alternatively please click here http://www.merciafund.co.uk/about-us/forward-house-workspace/ to access the Forward House Workspace webpage.

Mercia Growth Fund 3 is the latest incarnation of the company’s EIS / SEIS hybrid fund. The fund offers initial and follow-on funding to companies with a growing revenue base and highly scalable technology offering at their core with global applications. The tax efficient structure of the fund makes EIS and Seed EIS a compelling investment structure for private investors. The closing date for Mercia Growth Fund 3 is set at May 2014.

ENDs

Digital trading card developer poised for further growth following £280,000 EIS investment

Henley-in-Arden, 12 May 2014. VirtTrade has announced the completion of further investment led by Mercia Fund Management (MFM), a leading provider of investment and business support services for fast-growing technology companies.

VirtTrade delivers all the fun mechanics of physical card and sticker collecting and trading, using digital technology to make the experience more interactive and engaging. VirtTrade’s trading engine has been in development for a number of years and is unique in the way it allows users to complete trades on a global scale and in real time.

Complete with live feeds and real-world activity, VirtTrade has propelled the traditional trading model into the 21st century.

John Howard, CEO of VirtTrade, comments on the company’s unique concept: “The sticker and trading card market is extremely well established, but the current model was not designed for today’s users. VirtTrade makes the traditional trading mechanics ‘live’, and with data changing on demand our technology creates a smarter, more engaging way to trade and collect.”

VirtTrade has secured funding from a series of private and professional investments. Second stage Enterprise Investment Scheme (EIS) funding from Mercia Fund Management has recently been agreed.

The funding will be used to develop VirtTrade’s core technology and license the high-value commercial content needed to enhance the product within the next 12 months. The investment package will also be used to strengthen and extend its team of designers, developers and marketers.

John added: “Working with Mercia Fund Management will enable us to take our technology to new partners and grow our business further. The investment team’s business expertise has already helped us to secure critical hires, significant license deals and kick start product development.”

Mike Hayes, Head of Mercia Fund Management’s Digital Division, commented on the investment: “VirtTrade’s USP makes it a significant and exciting addition to our digital portfolio. Its ability to take an already profitable traditional model to new heights in the digital world demonstrates a highly scalable concept that has the capacity to appeal to consumers of all ages. The digital division at Mercia Fund Management is looking forward to working further with VirtTrade and welcomes the company to our portfolio of innovative companies.”

Mercia Fund Management’s latest EIS and SEIS hybrid fund, Mercia Growth Fund 3, is set to close in May 2014. EIS provides investment capital to those seeking follow-on funding to accommodate and accelerate growth. Both SEIS and EIS are long term investments and unlock legitimate tax reliefs for private investors.

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Mercia Fund Management fuels growth for profitable Virtual Reality games developer and publisher nDreams and separately for Mobile app developer No Yetis Allowed, via Seed EIS and EIS investments

Henley-in-Arden, 7 April 2014. Virtual reality (VR) games developer and publisher nDreams and Mobile app creator No Yetis Allowed have both secured funding from Mercia Fund Management (MFM), a leading provider of investment, accommodation and business support services across the UK.

These businesses are just two of Mercia Fund Management’s growing portfolio of gaming companies benefitting from both finance and also sector expertise from former SEGA CEO Mike Hayes and ex-Codemasters MD Nick Wheelwright.

Mike Hayes, head of Mercia Fund Management’s Digital and E-commerce Division commenting on the investments said: “The expansion of our digital and e-commerce portfolio has allowed us to invest in a number of exciting and innovative ventures in the thriving gaming sector.”

nDreams, which was founded by former Eidos Creative Director, Patrick O’Luanaigh, in 2006 develops and publishes Virtual Reality (VR) games and experiences, an area that is set to grow massively by the end of 2014. Noting the company’s recent developments Patrick O’Luanaigh said: “We have been working on VR prototypes and experiments for eight months and have a number of games and experiences in the pipeline. We have also funded an independent VR gaming website called VRFocus, which launched in February 2014 and is already one of the leading global VR gaming sites in terms of traffic.”

He added: “Mercia Fund Management’s £250,000 investment in nDreams will enable us to expand our existing profitable operation by increasing our team of developers and to increase our focus on enhancing our VR technology. It is a pleasure to work with Mercia Fund Management and the fact that we share a very similar yet ambitious vision proves that the Mercia team is the right partner for us.”

No Yetis Allowed, which was formed in late 2013, and is led by former Blitz Games Studio Project Director Mark Hardistry, builds character focussed mobile apps utilising a host of high profile and universally recognised characters. The company’s apps are aimed at users of all ages and the fun and original products are due to be released on iOS and Android as well as additional mobile and web based platforms following the initial launch.

Mark Hardisty, founder of No Yetis Allowed, commented on the deal: “The £150,000 we have secured through Seed Enterprise Investment will primarily be spent on increasing the functionality of our apps. Alongside increased interactions and gameplay with our existing characters, we will be building upon the gaming engine, enabling us to add further characters in the future as well as expand our repertoire of features and games.”

Mercia Growth Fund 2 was launched in 2012 and the latest incarnation, Mercia Growth Fund 3, is designed to fuel business growth further via Seed Enterprise Investment (SEIS) and EIS.

The closing date for Mercia Growth Fund 3 is set at 31st April 2014.

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About Mercia Fund Management

Mercia Fund Management (MFM) has over £19 million under active management. MFM provides investment capital throughout a company’s journey (from early stage to expansion capital), support services for its portfolio and accommodation at its post-seed incubator at Forward House, Henley-in- Arden, Warwickshire.

Mercia Growth Fund 3, which launched December 2013, is closing for new investment in April 2014 and is targeted to raise circa £5 million.

MFM is an FCA authorised and regulated fund manager under FSMA (FRN: 524856).

www.merciafund.co.uk