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VC firm Cambridge Innovation Capital has raised £225m for its second fund to invest in deeptech and life science startups based in Cambridge.
The fund will mainly invest in startups at the seed and Series A stage. A typical investment will be as much as £5m, with £15m reserved for follow on fundraising.
It brings Cambridge Innovation Capital’s assets under management to $1bn. Founded in 2013, the venture firm is the preferred investment partner of the University of Cambridge.
It has previously invested in approximately 40 startups, including quantum computing software company Riverlane and cancer immunotherapeutic firm Epitopea.
The oversubscribed Fund II is Cambridge Innovation’s largest fundraise to date. It follows the venture firm’s £75m fundraise in 2016, which went on to invest in the likes of CMR Surgical and Pragmatic Semiconductor.
“Cambridge, UK is one of the fastest-growing science and technology innovation ecosystems in the world,” said Andrew Williamson, managing partner of Cambridge Innovation Capital, also known as CIC. “Since our inception, CIC and our co-investors have invested more than £2bn in sectors as diverse as robotics, semiconductors, genomics, gene therapy, therapeutics, liquid biopsy, artificial intelligence, and edge computing.”
The capital for its latest fund came from a group of about 50 institutional and strategic investors, with almost half of the cash coming from those based in the UK.
Its second fund has already invested in six startups.
Cambridge Innovation Capital has also co-founded DeepTech Labs and Start Codon, two business accelerators based in the university city.
According to government research, Cambridge is the UK’s top regional tech hub thanks to the high levels of VC funding and startup creation in the city.
Cambridge has become a magnet for deeptech startups, particularly in quantum computing. The city is the home of Cambridge Quantum Computing, which last year completed a merger with US-based Honeywell Quantum Solutions to create a quantum computing powerhouse named Quantinuum.
UK Retail sales volumes fell by 1.4% in March 2022 following a fall of 0.5% in February, the Office for National Statistics said on Friday. That said, sales volumes were 2.2% above their pre-coronavirus February 2020 levels.
The largest contribution to the fall came from non-store retailing with volumes down 7.9% after a fall of 6.9% in February. The proportion of retail sales online fell to 26%, its lowest proportion since February 2020 (22.7%). Its peak of 37.1% had come a little over a year ago in the middle of a lockdown.
Again, though, even with the drops, e-sales volumes were 20.3% above February 2020.
Non-food store sales volumes rose by 1.3% in March, although fashion didn’t contribute to the rise with DIY on many consumers’ minds instead.
Clothing stores’ sales volumes actually dropped 0.5%. And department stores were down 0.1% month-on-month.
But the sub-sector of ‘other non-food stores' reported a monthly increase in sales volumes of 2.9% in March. This was because of strong growth in second-hand goods stores.
Overall, it seems small business struggled and Government High Streets Task Force expert and ShopAppy founder Dr Jackie Mulligan said: “For countless small independent retailers, March was merciless. The thousands of small high street businesses we work with said it was extremely challenging last month and this data reflects that. Inflation is really starting to take its toll on people's finances and that is rapidly impacting sales on the high street.”
And Victoria Jenkins, CEO of London-based fashion retailer Unhidden, added: “Sales are currently slow. An additional challenge for us, compared to fast fashion brands, is that we are made to order, which means producing items is much more time-intensive. We are also currently targeting a demographic that the fashion industry, sadly, has long excluded, namely the disabled community. We are still trust building with our prospective customers and that's another challenge right now.”
Dalia Hawley, skincare manufacturer at Dalia Botanqiue, also showed that beauty isn’t immune to the downturn. “I sell handmade natural skincare both online and in a local social enterprise craft shop. I have noticed a significant drop in sales, both online and in store over the past month or so. I believe people are now viewing my range as more of a treat as opposed to an item they previously didn't think twice about buying a few times a month,” she said.
Online beauty and technology group THG reported its preliminary results for last year on Thursday, plus a Q1 trading update that showed it weathering the current inflation and supply chain storm fairly well.
But perhaps even more interesting is that CEO Matthew Moulding confirmed speculation that the company has had buyout approaches. However, it doesn’t look like it will be up for sale any time soon.
“I can confirm that the board has received indicative proposals from numerous parties in recent weeks [but] has concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group, and confirms that THG is not currently in receipt of any approaches,” he said.
“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the [London Stock Exchange] at the appropriate time.”
For the first three months of this year, it saw revenue of £520.2 million, up 17.2% against last year (YoY) and 87.9% over two years (2YoY).
It hailed “a strong result considering the particularly challenging comparable global lockdown period, with the long-term trend towards e-commerce continuing to support new customer acquisition and retention”.
THG Beauty delivered sales growth of 19.7% YoY to £264.7 million, with partnerships across leading brands “continuing to strengthen across the retail destination sites with 24 new partners joining the platform in Q1”.
Group apps continued to “drive improvements in order values and time between orders, with influencers also playing an important role in cost-efficient marketing”. They generated around 10% of total group D2C revenue for Q1 on a tracked basis.
Its key Ingenuity Commerce business that gets other brands online also had a good quarter. Ingenuity revenue was £51.9 million, up 281%. And Ingenuity Commerce revenue rose 47.9% to £11.8 million.
In Q1, the number of live client websites was 202, up from 133 a year ago, with recurring revenue at 76% compared to 55%.
THG said that while companies may be rethinking their capital spending due to current pressures, “digital transformation projects remain essential, reflected in the strength of the THG Ingenuity new business pipeline”.
Looking back at 2021, THG said that on a preliminary basis, revenue rose to £2.179 billion from £1.613 billion YoY. And the operating loss narrowed to £137 million from £481 million.
Adjusted EBITDA rose to £161 million from £151 million. This represents a margin of 7.4% (down from 9.3%) reflecting cost headwinds in H2. In fact, the impact of these headwinds trebled in H2 relative to H1, but it believes “much of this pressure is short term and will dissipate over time”.
As well as the one-year comparison on revenue, the company said that group revenue rose 95% on a constant currency basis 2YoY.
All divisions grew, with THG beauty performing “particularly well”. It saw revenues of £1.18 billion, representing 51% of the group's total revenue compared to 47% in the previous year as strong organic sales growth was complemented by the acquisitions of Dermstore, Bentley and Cult Beauty.
THG Ingenuity grew its revenues 42% YoY to £194 million with the Ingenuity commerce division growing 135%. Its revenue was up to £45.4 million and included 62% recurring revenue rather than 48% a year earlier. Recurring revenue includes SaaS licence fees, monthly brand-building fees, infrastructure service fees, revenue share and a number of additional services.
International sales accounted for 58% of the total, down from 61% a year earlier, after it saw very strong UK growth of 46%. This was helped both by organic growth and acquisitions.
Matthew Moulding said: “In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO. We delivered a record revenue performance for the year”. He added that on a two-year basis, THG has effectively doubled the size of the business.
London-based fintech startup Pillar has raised £13m in pre-seed funding for its platform that gives immigrants access to credit when moving to a new country.
The funding round was led by Global Founders Capital and Backed VC. Angel investors for the round include Wagestream co-founders Peter Briffet and Portman Wills.
Pillar was founded to serve the needs of migrants who, despite having plenty of cash, are unable to secure credit services like loans and credit cards due to the difficulty of taking a credit file to another country.
Co-founded in 2021 by Revolut’s former head of lending Ashutosh Bhatt, Pillar provides those moving internationally with access to credit products using open banking data and analytics.
Bhatt was inspired to co-found Pillar, along with company CTO Adam Lewis, by his own experience as an immigrant.
“Ever since I moved to the UK and found I couldn’t access any of the everyday products I had in India this has been a problem I have been passionate about solving,” Bhatt said. “I arrived earning a good salary at Barclays and found I couldn’t even get an iPhone!”
Bhatt noted that years later, the problem hasn’t changed, “so we have set upon building a globally scalable platform that breaks down data silos and credit borders as well as solves this massive problem faced by financially secure people moving to a new country”.
Bhatt added: “Through Pillar, anyone moving to the UK from another country can have a credit card in their pocket before they board their flight and instantly get on the credit ladder. Plus, we aren’t stopping with this use case, we want to take this service and experience globally to credit markets around the world.”
A number of recently founded startups have been trying to solve the problem of providing credit products to those who are ‘credit invisible’, including Yonder, which recently raised £20m in seed funding.
Spanish fashion company Mango continues to demonstrate its commitment to sustainability. After closing 2021 successfully with a good financial structure, the company has just extended the maturity date of its syndicated loan, scheduled for 2022 and 2023 and with an outstanding balance of €236 million, until 2028. The company has linked the transaction to its ESG (environmental, social and good corporate governance) criteria. The transaction was led by CaixaBank.
The deal signed on Wednesday, April 19 enables the company to extend its repayment date, improve the cost of its debt and double the availability of revolving credit lines. The agreement also includes a new syndicated loan of €200 million from which €150 million will be amortized on a straight-line basis until 2027, while the remaining €50 million are part of a financing facility that can be used until 2024 for capex investments and could be paid off in a single bullet repayment in 2028 if drawn down.
However, the cost of the loan could be reduced if sustainable targets are met. The company must achieve 100% use of sustainable cotton, recycled polyester and cellulose fibers by 2025, as well as reduce scope 1 and 2 CO2 emissions by 10%.
"This is a historic transaction for the company. Not only is it the first time that we’ve linked the cost of debt to sustainability indicators, but we have also managed to extend the repayment calendar, improved its cost, and doubled our financing capacity," said Margarita Salvans, CFO of Mango.
In addition to CaixaBank, the transaction was coordinated by BBVA and Banco de Sabadell. Banco Santander, Erste Bank, Deutsche Bank, Ibercaja and Unicaja also participated in the transaction, while the Barcelona law firm Broseta served as legal advisor.
This strategic move comes at a time when Mango has just completed the full repayment of the €240 million credit line requested in spring 2020, at the beginning of the pandemic, to the Official Credit Institute (ICO). At the end of 2021, the company had a negative net debt of €8 million.
Founded in 1984 in Barcelona, Mango is present in more than 110 countries through a retail network of 2,447 points-of-sale. Its latest sustainable projects include a collaboration with the company I:CO aimed at promoting circular economy by placing Committed Box containers throughout a selection of its stores allowing clients to recycle their clothing. In fiscal year 2021, Mango generated a turnover of €2,234 million, up 21.3% year-on-year, with the online channel accounting for 42%.
A French court has given two former Deliveroo managers suspended one-year prison sentences for abusing the freelance status of the British food delivery company’s riders.
The managers were also fined €30,000 (£24,955) each. The London-headquartered company was handed a fine of €375,000 (£311,966) and was told to publish the court’s decision on the home page of Deliveroo France for one month.
The court deemed that the food delivery company has been violating French labour laws that grant workers certain rights, including benefits, social security, and pension contributions.
An investigation into Deliveroo’s practices found that the company was allocating extended time slots in which riders must be available to make deliveries. Those that refused the extra deliveries were told they could not continue working on the platform.
This was despite Deliveroo’s claims that its riders are “freelance partners”. Under French labour laws, freelancers have more autonomy over the hours they work than full-time employees.
The investigation also found that Deliveroo had an illegal level of control over the pay increase criteria and minimum hours requirement for freelance workers.
“This set of elements characterises a situation of almost permanent legal subordination,” said judge Sylvie Daunis.
Deliveroo has said it is appealing the court decision.
“The judgement goes against previous decisions in civil courts covering the same historic period, which have repeatedly found riders to be self-employed,” a spokesperson for Deliveroo said.
“While this case does not concern today’s operating model, we strongly disagree with this judgement and the basis on which it has been made, and we will appeal.”
This case comes just three weeks after Deliveroo CEO Will Shu was given a 16% pay increase, taking his salary up to £600,000 with an additional £5m of shares, as part of a £30m package over the next six years.
Debates over the ethics and legality of companies operating with the gig economy model for employees have been ongoing since the rise of companies like Deliveroo and Uber.
Deliveroo has previously faced legal action over the status of its couriers, having won a court case in the UK last year following the Independent Workers Union of Great Britain’s (IWGB) attempts to represent riders in 2017.
The UK court deemed that Deliveroo riders did not meet the requirements to be classified as workers.
Uber faced similar legal action last year when the UK Supreme Court forced the ridesharing company to classify its drivers as employees instead of independent contractors.
Last year, Deliveroo listed on the London Stock Exchange and saw its share price immediately plunge by as much as 30%.
London-based cryptocurrency firm Blockchain.com is reportedly seeking a US listing for its upcoming initial public offering (IPO) launch, in a potential blow to the growth of the UK cryptoasset sector.
The startup has started interviewing banks ahead of the potential US IPO and could finalise the deal this year.
Sources close to the situation told Bloomberg that the IPO launch might not happen until next year and that the company’s plans could change.
The UK company was recently valued at $14bn (£10.7bn) following its latest round of funding and is one of the country’s largest cryptocurrency firms, claiming to have 37 million active users across the world.
Blockchain.com’s US listing plans come after Chancellor Rishi Sunak announced the Treasury department’s ambitions of turning the UK into a “global cryptoasset technology hub”.
Economic secretary for the Treasury John Glen outlined the department’s steps to grow the UK cryptocurrency industry, which included “legislating to bring certain stablecoins into our payments framework”, as well as the creation of an NFT by the Royal Mint.
Blockchain.com was founded in 2011, making it one of the earliest cryptocurrency infrastructure providers.
Despite being one of the UK’s biggest cryptocurrency successes, Blockchain.com has had difficulty operating in its own home nation. The firm has struggled to receive regulatory approval following a crackdown from the Financial Conduct Authority (FCA) on cryptocurrency trading regulations.
The company was briefly granted temporary trading permission from the FCA as part of a list of 12 companies. However, Blockchain.com lost this temporary approval when the list of companies was reduced to five.
Blockchain.com’ crypto exchange rival Coinbase recently launched its IPO last April, debuting at a valuation of $100bn, although its share value has dropped significantly since then.
Fellow crypto exchange Binance has also been looking into going public. The Binance chief executive said last September that he expects the IPO launch to happen in two or three years.
UKTN has reached out to Blockchain.com for further comments.
Next is continuing its acquisition spree as it expands in the mother-and-baby market with the purchase of Jojo Maman Bébé in a consortium with a group of finance firms.
It won’t be the majority owner though with the firm taking a minority — albeit a large minority — stake, adding up to 44%. The remaining 56% will be owned by investment companies managed or advised by hedge fund Davidson Kempner.
Next is also making a £16.3 million investment in the brand funded from its own cash reserves.
Next chief Simon Wolfson said: “We are excited to see what can be achieved through the combination of JoJo's exceptional product with Next's infrastructure and Davidson Kempner as our investment partner."
Jojo Maman Bébé’s founder Laura Tenison will leave the business after almost three decades as part of the deal. She was one of the shareholders selling her stake.
Tenison said she was “excited by the opportunities this new partnership will offer”, even though she won’t be part of those opportunities. She also said she was “exceptionally proud” of the brand’s achievements, after leading it “from a kitchen table start-up to being the UK's leading specialist boutique mother and baby brand”.
But while Tenison is exiting, Gwynn Milligan is staying and steps up as CEO after five years at the firm, originally joining as commercial director. Other members of the management team are also staying.
Importantly too, the company will continue to operate its 87 physical stores in the UK, which will come as a relief to its almost-1,000 staff. The report said there will be “no immediate job losses”. However, management also said that Next is keen to continue with any stores that are "running profitably".
The retention of the physical stores is perhaps no surprise as Next is adept at running both physical and online retail operations including both own-brand and other branded stores.
But the move does raise the prospect of future Jojo Maman Bébé concessions opening inside Next stores and it will be interesting to see whether any standalone stores for the label that are close to large Next locations are eventually merged into the larger business.
Apparently, the long-term strategy hasn’t yet been decided on and the brand will stay a distinct entity for the foreseeable future.
Under Next’s aegis, the label is also likely to see major online expansion.
Staff were told the deal would “ensure the longevity of the brand for generations of new customers”.
Next has a history of buying major minority stakes in premium businesses, its purchase of a substantial holding in Reiss being a good example.
Luxury giant Hermès was the latest big name to update on recent trading on Thursday and it reported what we’ve seen elsewhere so far this year — “strong sales momentum across all business lines in all geographical areas”.
In fact, sales rose 33% at current exchanges rates in Q1, reaching €2.765 billion. That was a 27% rise at constant exchange rates, which was perhaps unsurprising given how Q1 last year was marked by lockdowns in many of its markets.
It said sales were “particularly dynamic” in its own stores, especially in America and Europe, driven by the acceleration in all the business lines and “sustained growth” in the Leather Goods division.
Executive chairman Axel Dumas said: “The strong growth in sales at the beginning of this year reflects the desirability of our collections and the confidence of our customers in our artisanal and responsible approach.”
And he added that while the consumer and business backdrop may still be uncertain, the group is “accelerating its strategic investments, recruitments and training to support the growth of all the métiers of the house”.
Getting down to more detail, sales rose by 28% year-on-year in its stores — again likely to have been boosted by the big global reopening compared to a year ago. It also said its network “continued to develop with store openings and extensions, and the strengthening of online sales worldwide”.
Looking geographically, Asia, excluding Japan, was up 20% and benefited from a “very good Chinese New Year and from sustained activity, especially in Thailand, Singapore, and Australia”. However, since mid-March, Greater China has been hit with new health restrictions and some store closures, particularly in Shanghai and Shenyang.
But the company had good news on stores in the region too. Its shops in Hong Kong’s Pacific Place and Macao’s One Central reopened in January and February, respectively, after renovation. A new store opened in Zhengzhou at the end of March, the first for the brand in the Chinese province of Henan.
Meanwhile, Japan sales rose 17%, continuing a general picture of sales rises there.
The Americas surged 44%, with “a strong acceleration at the end of March, thanks to a good momentum in the US”. Hermès is one of a string of latest luxury labels to see sales soaring in the US with that market being particularly buoyant in recent periods.
During the quarter, its South Coast Plaza store reopened on the Californian coast in Costa Mesa, near Los Angeles, after renovation and extension.
There was good news on Europe too, which had been a difficult region for many luxury labels as the tourist flows on which they previously depended became a mere trickle. But this time, Europe, excluding France, saw sales up 44%, and France itself rose 40%.
Of course this was helped by easy comparisons with last year’s lockdowns, but the company also saw “sustained growth particularly in the UK, Germany, Italy and Spain”.
Looking at its individual business units, the company said all divisions saw “strong momentum” by the end of March. RTW and Accessories “accelerated” with 44% sales rises at constant exchange rates, and the 16% growth in Leather Goods and Saddlery was based both on its increase in production capacity and sustained demand. The Silk and Textiles business line (+27%) “performed well” and Perfume and Beauty was up 18%.
Meanwhile, Watches (+62%) “achieved an outstanding performance” and ‘Other’ Hermès business lines (+37%) “confirmed their momentum, thanks to Homeware and Jewellery”.
That leaves the outlook for the rest of 2022 to deal with and it’s no surprise that the company said “the impacts of the health context are still difficult to assess”.
It gave no specific figures but nonetheless struck an upbeat tone. The company said that its “highly integrated craftsmanship model and balanced distribution network, as well as the creativity of our collections and our customers' loyalty allow us to look to the future with confidence”.
In the medium term, “despite the economic, geopolitical and monetary uncertainties around the world, the group confirms an ambitious goal for revenue growth at constant exchange rates”.
When it made several unsolicited offers to buy a Ted Baker, private equity group Sycamore Partners may have hoped to pick up the UK fashion business on the cheap. But it's now likely to have to pay much more than it hoped as it continues to take part in the bidding process.
Ted Baker said in a stock exchange statement on Wednesday that Sycamore has indicated it’s still interested in being part of the formal sale process, despite speculation that it might drop out now that the company has officially put itself up for sale and the price is therefore likely to rise.
The statement said: “Further to the announcement made on 4 April 2022, Ted Baker PLC confirms that Sycamore Partners Management LP will participate in the formal sale process. As such, Sycamore is no longer required [under stock exchange rules] to announce, by no later than 5.00 pm on 15 April 2022, either a firm intention to make an offer for Ted Baker or that it does not intend to make an offer.”
Ted Baker remains in turnaround mode having been working hard to recover from a series of problems both caused by the pandemic and by missteps of its own. But the company seems to be on the right track.
Despite its share price plummeting from the highs of 2015 when each share traded at almost £28, it clearly retains some appeal for private equity groups looking to profit from its recovery.
A few weeks ago, Ted Baker said it had rejected two successive unsolicited offers from Sycamore as they undervalued the business. But it also received an “improved proposal” from the group, as well as “other unsolicited third-party bid interest”.
It didn't disclose what the third offer from Sycamore added up to, but earlier reports said the group had initially offered £1.30 per share offer, valuing the business at £250 million.
The company's share price has struggled in recent years and was hit hard by the pandemic, falling as low as a little over 70p during 2020. However, the share price had recovered somewhat, but was still only at 80p in February. It subsequently began climbing and the Sycamore news sent it higher still. The shares were trading at around £1.50 each on Wednesday morning, valuing the entire business at almost £272 million.
It's still not known who else is interested in buying the company and whether any other retailers might be prepared to throw their hats into the ring.