BGF backs Kooth plc to support US expansion plans

We’ve completed a £3m investment into the business, a global leader in youth digital mental health and wellbeing services, as part its wider £10m fundraise.

1 September 2023

BGF has completed a £3 million investment into Kooth plc, a global leader in youth digital mental health and wellbeing, as part of the company’s recent £10 million fundraise.

Launched in 2001, Kooth is the longest-established digital mental health services provider in the UK. With a focus on the provision of online mental health services for children and young people aged 10 to 25, Kooth provides anonymous and personalised mental health support, and counts over 1.3 million logins per year. Licensed to the NHS, local authorities, charities and businesses, the Kooth platform is available to more than 60% of children and young people in the UK.

BGF’s decision to support Kooth follows the company’s recent success at securing a transformational contract with the California Department of Health Care Services, worth $188 million over the next four years, to provide digital mental health care to all six million 13-25 year olds living in the State.

Kooth’s oversubscribed £10 million funding round is aimed at fortifying general platform enhancements and expansion efforts in the United States. The business is now in the process of building out its US team to support the Californian contract, amid plans to roll out to additional US states in the near future.

Simon Blackaby, investor at BGF, commented: “Kooth is a great example of a high-quality business with a proven business model, a significant recurring revenue stream, and now, international growth potential. We have a strong conviction in the management team’s ability to execute the step-change in the scale of the business, following the recent US contract win, which is a clear demonstration of Kooth’s credibility and expertise in its field. This is an exceptional achievement for a UK-based business which has purpose at its core, and we’re delighted to be playing a part in its continued expansion.”

Tim Barker, CEO of Kooth said: We’re pleased to gain the backing of BGF on our share register. In addition to their funding, BGF’s network and support will give us the opportunity to continue building a world-leading platform for young people. With further traction now seen in the US platform, Kooth is well-positioned to continue its international growth.”

The investment in Kooth follows strong momentum for BGF, which has surpassed £50 million of new investment into UK quoted companies so far this year. This takes total investment by our Quoted team to over half a billion pounds.

BGF’s quoted proposition was launched in 2014 to support ambitious, listed companies looking to fast-track their growth. We invest in quoted companies across all sectors, throughout the UK, with a consistent focus on the smaller end of the market—with most investee businesses falling under a market cap of around £150 million at the time of investment.

Paul Stevens, head of quoted investments at BGF, said: “Kooth is a great example of the type of publicly-listed SME that we are keen to support—one that has delivered strong progress over recent years and is now looking to deliver significant scale, both in the UK and internationally.”

“The small cap ecosystem, including AIM, is home to some of the most exciting and innovative businesses in the country, many of them pursuing global growth strategies. BGF is well-placed to be able to support such businesses, owing to its differentiated balance sheet funding structure, and is proud to be a stable, long-term investor in the market.”

BGF is now one of the most significant dedicated investors in smaller listed companies. Other notable investments by our Quoted team include SigmaRoc, SDI Group and Franchise Brands.

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