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BGF backs 24 new businesses and invests £180m in the first half of the year
BGF has backed 24 new companies in the first half of the year whilst continuing to actively support its portfolio.
Total H1 investment stands at £177m and includes £128m into new portfolio companies and £49m into existing portfolio companies.
BGF has made it a priority to support the economy in uncertain times, backing one new company a week, including Emma Bridgewater in Stoke-on-Trent, Bayfield Opticians in Leeds and AIM-listed The City Pub Group in London.
Stephen Welton, Executive Chairman at BGF said: “Covid-19 is already having a dramatic impact on the economy with growing unemployment and real concern about rising insolvencies as furlough ends and recessionary conditions hold sway. BGF as a business has maintained full employment and successfully operated remotely. That sadly will not be the case for much of the economy which is why ongoing investment activity is so crucial.”
BGF delivered eight successful exits in H1 with an average money multiple of 2.1x and an aggregate IRR of 41 percent, reflecting the underlying dynamism of the Growth Economy.
The average investment hold period for H1 exits was 3.5 years and ranged from nine months to over six years, facilitated by BGF’s flexible investment model.
These exits – which returned £135m from the £66m invested – included four technology services and software companies, Miss Group, Vysiion, Solid Solutions and AIM-listed Castleton, and e-commerce retailer DOS. BGF has fully written down investment in three companies during this period.
Technology and digital companies made up a significant portion of investments in the first six months and included Amdaris in Bristol, AND Digital in Maidenhead, Edgescan in Dublin and Juriba in London. Maintaining a strong regional focus remains paramount to BGF as shown by recent activity and the spread of the portfolio overall. New offices were opened in Cambridge and Cork in the first half of the year.
Meanwhile, on the digital side, Gousto – the recipe box subscription service – secured its seventh round of BGF funding. Trouva topped this year’s Start Ups 100 – which lists Deliveroo, Monzo and Revolut in its alumni, and the World Economic Forum named Streetbees in its 100 Technology Pioneers 2020.
Andy Gregory, Head of Investments – UK & Ireland, BGF said: “BGF has experienced an impressive investment run rate which has continued at pace throughout lockdown. We are anticipating a strong third quarter, with a number of new deals – including investments in life sciences and clean tech – progressing well.
“The past three months have been a challenging time for most entrepreneurs and management teams in Britain and Ireland, but we have seen a huge amount of focus and resilience. BGF’s regional and decentralised structure has enabled us to maintain pre-Covid levels of activity during Q2 thanks to the relationship building efforts of the investment teams and localised processes.”
Stephen Welton, Executive Chairman of BGF continued: “At the forefront of the debate around how Britain & Ireland funds its future beyond immediate liquidity are the capital needs of businesses in general and growth firms in particular. BGF has demonstrated significant momentum in the first half of the year but, equally, we know that this quarter has been incredibly tough for growing businesses and the outlook is even more uncertain.
“As the furlough scheme comes to an end and creditors begin to seek repayment, many companies will now face a triple whammy: a harsh trading environment, the need to raise working capital and strengthen balance sheets, alongside pressure to pay back the loans they needed to take during lockdown. Without significant support that will be unsustainable for many businesses.
“There is a critical need to unlock vital sources of equity funding for UK firms that allow them to service their debts, but crucially also to grow. The government and the private sector alike must take this as an opportunity to be bold and commit to invest in the companies that will drive the economic recovery we so urgently need. That is why we are calling for a £15bn National Renewal Fund to ensure these businesses have the capital they deserve. Our discussions with a broad range of investors shows that with the right circumstances and approach, there is a willingness to invest.”
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