Two exclusive EIS tranches with imminent deadlines

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Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.

When you invest in an EIS fund, the manager will often deploy your funds over time – usually around 12 months. In many instances, you have little visibility as to which investee companies will be included in your portfolio. 

However, in some instances, the managers agree to share with Wealth Club investors a pipeline of companies likely – but not guaranteed – to be included in their portfolio and provide a more precise timeframe for targeted deployment. 

This is the case with the upcoming investments for two EIS funds – Par EIS Fund, one of our featured EIS funds, and SuperSeed Venture Fund, the latest addition to our service. If you invest by the set deadline, your funds should be fully deployed by the end of the tax year and your portfolio is likely to include the companies listed below (not guaranteed).

Par EIS Fund September tranche

Co-invest alongside British Business Investments' Regional Angels Programme – deadline 30 September, £500k exclusive allocation 

SuperSeed Venture Fund introductory tranche

Invest alongside technology entrepreneurs in early-stage B2B SaaS and AI businesses – deadline 9 October

Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value, so you could get back less than you invest.


Par EIS Fund September tranche – apply by 30 September

In April 2020, Par Equity was one of just three firms to win the backing of the British Business Investments' £75 million Regional Angels Programme. The programme is committing £15 million to be invested alongside the Par EIS fund and Par Investor Network.

We already benefit from a flow of high-quality investment opportunities and this commitment from the Regional Angels Programme will bring us increased financial firepower. It will help us enhance our growing reputation as the investment partner of choice for the best young companies in the regions

Paul Munn, Managing Partner of Par Equity

Now investors can co-invest alongside British Business Investments with expected full deployment by the end of this tax year (not guaranteed) – the deadline to invest is 30 September.

Which companies might be part of the portfolio?

Par currently has five companies in its pipeline, expected to be included in a portfolio of around eight companies.

Please note, whilst Par Equity has every intention of deploying funds into the companies below, deals can fall through, so gaining exposure to all five companies is not guaranteed. 

These are all small early-stage companies, so there is a risk some – or all – might fail and you could lose all your capital.

RD Graphene – Par EISRD Graphene

Graphene is considered to be the world's thinnest, strongest and most conductive material of both electricity and heat. Indeed, it has been heralded as a miracle material for the 21st century. It can be used in a range of applications, from aerospace engineering to electronics and biomedicine. Now research is focusing on methods for large-scale manufacturing. 

RD Graphene has developed a patent-pending process for the cost-effective generation of graphene at room temperature, on any surface, with cycle times in seconds. This method could potentially be scalable for high-volume production.

The company has been revenue generating since incorporation in 2014. In 2019, it generated £639k, projected to increase to £894k in 2020 and £10.3 million in 2022. These figures are forecast and not guaranteed; past performance is not a guide to the future.

Datactics – Par EISDatactics

Belfast-based Datactics has developed software that profiles, scores, cleans and reformats data for regulatory compliance and business growth. 

Its expanding client portfolio includes government departments, such as the UK Home Office and the Financial Ombudsman Service, as well as global banks and a wide range of firms operating in the financial sector, such as Brewin Dolphin, Bank of Ireland, Danske Bank, ING, UBS and Thomson Reuters. 

Since Par Equity first invested in April 2019, Datactics has grown revenue to £1.5 million at FY19 and is projecting revenue of c.£2 million in FY20 (despite Covid-19), growing to £7 million in FY23 (forecast and not guaranteed). Past performance is not a guide to the future. 

Plotbox – Par EISPlotbox

Named Northern Ireland's most innovative technology company, Plotbox has developed a cloud-based platform for cemeteries and crematoria. 

Traditionally they rely on multiple and often antiquated systems to manage records and work orders and only have paper maps, often hand drawn – showing the different plots.  

Plotbox’s solution is the first to integrate two previously separate functions - software and mapping. Its platform allows facilities to have everything in one place – contracts, accounting, records and deeds. In addition, Plotbox uses drones to create high-quality imagery of a cemetery, providing real-time inventory status. 

Plotbox is headquartered in Northern Ireland with three offices in the United States and customers in Europe, US and Australia. Since Par’s initial investment in April 2019, the company has grown annual recurring revenue to $1.28 million, forecast to grow to $3.9 million in 2021 and $7.3 million in 2022 – these are forecast and not guaranteed and past performance is not a guide to the future.

Censo Biotechnologies – Par EISCenso Biotechnologies

Based at Edinburgh University’s Roslin Institute, Censo Biotechnologies is a spin-out stem-cell firm from the institute that cloned Dolly the sheep. 

The biotech firm produces stem-cells in a laboratory from a person’s skin or blood sample, which are then transformed into brain and other types of cells for drug research for neurodegenerative and neuroinflammatory diseases, such as Parkinson’s and Alzheimer’s.

Censo’s ability to service blue-chip pharmaceutical companies is impressive, having recently delivered stem cells under multiple six-figure contracts to the likes of GSK, Evotec, Takeda and Pfizer. 

The management team recently completed a successful exit of a similar business to a global acquirer and aims to replicate that with Censo – not guaranteed. 

TriVirum – Par EISTrivirum 

Trivirum is an early-stage medical device company using cutting edge semiconductor and signal processing technology to build innovative medical devices to assess coronary heart issues. The management team is highly experienced and has worked together previously in building and exiting a similar business in the US. 

Trivirum’s technology has been well received during initial discussions with the NHS as well as Kaiser Permanente, a large US health care provider, and it is anticipated that trials will follow with a view to wider deployment thereafter. 

Par Equity believes Trivirum might reach an inflection point in Q2 2021 leading to a significant valuation uplift at a Series A fundraising, although of course there are no guarantees.

Par EIS Fund September tranche – apply by 30 September


 

SuperSeed Venture Fund introductory tranche – apply by 9 October

SuperSeed Venture Fund is a new EIS fund launched last year by two technology entrepreneurs, later joined by a third, with previous total exits of over £25 million. It aims to give investors exposure to one of the most exciting – and high-risk – sectors: Artificial Intelligence (AI). 

The UK is a global top performer for VC investment into Artificial Intelligence and deep-tech companies – UK AI raised £2.42 billion in 2019. 

The SuperSeed Ventures Fund could be a way for private investors to access early-stage B2B SaaS and AI businesses, although you should form your own view. 

To mark the launch on Wealth Club, SuperSeed is making available an introductory tranche to invest in a minimum four to six investee companies, with the aim of being fully deployed by the end of the tax year (not guaranteed) – the deadline to invest is 9 October.

Which companies might be part of the portfolio?

SuperSeed has provided details of four companies expected to be included in the tranche (one is anonymous because is still undergoing due diligence). As ever, deals can fall through, so gaining exposure to all four companies is not guaranteed. 

These are all small early-stage companies, so there is a risk some – or all – might fail and you could lose all your capital.

SuccessData – SuperSeed Venture FundSuccessData 

SuccessData has created a solution that uses machine learning to automatically turn unstructured data buried in text, tables or figures from documents such as invoices or legal and commercial contracts into machine-readable data. This could help reduce time spent on manual data entry, dramatically improve data quality and reduce errors.

For instance, SuccessData could help digitise accounts payable departments by automatically extracting and processing data from complex invoices. The company estimates this could result in a process that is 30 to 50x quicker than the manual workflow with up to 99+% accuracy. 

SuperSeed first invested in SuccessData in 2019. Since then the company has secured five new key clients and expects to grow revenues by 3x in 2020. These are forecasts and not guaranteed.  

AI Build – SuperSeed Venture FundAI Build 

AI Build is a London-based company developing cloud-based Artificial Intelligence and Robotic technologies for large-scale additive manufacturing (i.e. 3D Printing). 

It is estimated that human labour accounts for up to 86% of the cost of producing large-scale units with additive manufacturing. The lack of automation results in high failure rates and uncertifiable production quality. AI Build’s cloud-based software, AiSync, is reportedly reducing manual labour costs by 90% and increasing quality.

AI Build intends to partner with major 3D printer manufacturers to become the default operating system for additive manufacturing. The business generates revenue by providing AiSync on a SaaS basis, the software is resold through third-party hardware manufacturers. 

Proceeds from the current funding round are to be used to hire additional software engineers, expand the sales team and reach its first £1 million in annual recurring revenue – not guaranteed. 

ThingTrax – SuperSeed Venture FundThingTrax 

Thingtrax is a provider of smart technology to the manufacturing industry – a $10 trillion market in the midst of an AI revolution. AI applications can monitor, understand and enhance productivity as well as improve a factory's health and safety. However, because of the costs involved, Thingtrax believes just 8% of manufacturers operate smart factories. 

Thingtrax has developed a simple and cost-effective AI solution for the remaining 92%. Its solution plugs into existing machines, is installed in one hour, and uses computer vision to collect valuable data. The solution is cost effective to install and removes the need for new machines, training, or expensive consultants. Thingtrax’s existing customers report reduced machine downtime, and line closures, as well as staff reduction. 

Thingtrax is initially targeting the plastic and chemical sectors. The business has a pipeline (not guaranteed) of £500k in revenue and intends to use funds to invest in sales and marketing.

Anonymous company – SuperSeed Venture FundAnonymous – Point-of-sale transaction data

This company is still undergoing due diligence and is expected to be included within the introductory tranche pending successful completion (not guaranteed). 

Half of the revenue in the beverage sector is generated “out of home”, which is, however, a blind spot for beverage companies. Data is not captured on sales or consumer behaviour. To address this, the company has developed an independent platform for the collection of data. The company incentives gastronomy vendors to supply the data to its platform, then charges beverage brands a fee for use of the data and insights the platform provides. 

The business has integrated with a number of transaction data vendors and has engaged with leading beverage brands. The company now seeks to raise capital to build its software and sales team and to live-test its platform and insights with brands. The management team has previous experience in building an AI startup in the gastronomy sector, having built a business which employed 45 people and had over €2 million in revenue. Please note, past performance is not a guide to the future.

SuperSeed Venture Fund introductory tranche – apply by 9 October

Why is the timing of the deployment important?

When you invest in an EIS fund, the fund manager will deploy your funds over time by investing in EIS-qualifying companies. 

Usually this process happens over time – around 12 months on average. 

Once your funds are deployed, your shares are allotted. 

The date your shares are allotted (not the date you invested) will determine the investment date for tax purposes. 

If your shares are allotted in EIS-qualifying companies before 5 April 2021, you should be able to choose whether to use the income tax relief against tax you owe for the 2020/21 tax year or against tax you’ve already paid for the previous one (known as “carry back”). 

Please note: To benefit from the tax advantages, certain conditions must be met, e.g. you need to hold EIS shares for at least 3 years to retain tax relief, and the investee companies need to remain qualifying. This is a brief overview and does not cover all the conditions. Tax rules can change and tax benefits depends on circumstances.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.