Arie Capital Technology EIS Fund

The Arie Capital Technology EIS Fund invests in early-stage technology companies sourced from its connections across the UK, Israel, and China.

Highlights

  • Early-stage technology companies
  • Exposure to proprietary deal flow from Israel
  • Target return of 2x investment after a five-year period, not guaranteed
  • Minimum investment of £10,000

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.


The manager

Arie Tech LLP ("Arie") is the company mentor for the fund which is managed by Sapphire Capital Partners LLP.

Stephen Margolis and Simon Tobelem are partners of Arie Tech. Collectively, Mr Margolis and Mr Tobelem have substantial experience in fundraising, financing, and strategic management. They act as Chairman and CEO respectively.

The offer

The fund will primarily focus on technology companies that the manager believes has the potential for significant innovation.

In particular, Arie will use its connections in Tel Aviv to source companies originating in Israel. Israel is one of the global leaders for technology research and development and has seen rapid development of its venture capital market over the last 30 years.

Where it identifies companies for investment,  Arie will assist the company in transferring its management and headquarters to the UK.  It will only invest through the EIS fund once the company receives Advance Assurance.

Arie believes it can secure more competitive valuations and offer a level of diversification not typically available to UK investors. Arie anticipates 60% of the portfolio should be sourced from Israel.

Arie will look for companies within five sectors: finance, apps, medical, electronics and big data. Any company the fund invests in must be able to demonstrate proof of concept, either through revenues, viable products, or compelling strategic partnerships. Typically, Arie will consider companies that have a management team with credible track records and the potential to replicate prior success.

Exit options

The fund is targeting a return of 2x over a five-year period. However, please remember returns and timeframes are not guaranteed.

Arie will consider a number of exit routes, such as a trade sale, acquisition, management buyout, or refinancing.

Portfolio

So far, the EIS fund has invested in four qualifying companies. Investors are expected to get exposure to a minimum of four companies (not guaranteed). Below are some examples of companies supported by the Arie team: note new investors will be exposed to different companies.

Examples of portfolio companies

Redux – Arie Capital EIS Redux

As demand grows for thinner and lighter technology, devices like smartphones and tablets are running out of space. Take the example of when Apple removed the headphone jack from new iPhones. While a controversial design choice, it eliminated a bulky component and freed up essential space. As this trend persists, big tech companies are searching for their next solution. Redux operates in this niche, removing  the need for speakers all together. Its invention can turn screens into speakers with haptic functionality (where the surface responds to physical actions like taps and swipes).

Arie Capital invested around £2.2 million in 2013 when the company was little more than a collection of patents. By 2017, the company had received significant interest from the industry and was eventually bought for an undisclosed fee by tech giant, Google. 

SatixFy – Arie Capital EISSatixFy UK

Developed by leading entrepreneurs in the satellite industry, SatixFy produces advanced communication modems for satellites.  

SatixFy’s technology allows it to reduce the cost, size and weight of satellite payloads (the scientific instruments carried onboard). The hardware can also be used in communication terminals and for in-flight connectivity, allowing airline passengers to access the internet during flights.

The company setup its first UK operations in 2016 and has forged relationships with the UK Space Agency, Innovate UK and the Department for International Trade. It has two design centres based in Farnborough and Manchester and received a funding commitment of £30 million from the European Space Agency’s Advanced Research in Telecommunication Satellites (ARTES) programme in 2018.

Please note, investments made by this EIS may be different.

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.

EIS investments are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

Tax rules can change and benefits depend on circumstances.

This EIS fund invests in early-stage businesses which are more likely to fail than larger ones. So you should expect a number of failures in the portfolio.

Charges

A summary of the main charges and savings is shown below. The net initial charge shown includes any Wealth Club saving. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details.

Investor charges
Full initial charge 2.5%
Wealth Club initial saving
Net initial charge through Wealth Club 2.5%
Annual management charge
Administration charge
Performance fee 20%
Investee company charges
Initial charge 5%
Annual charges 1.5%
All fees and charges are stated exclusive of VAT, which may be applicable in some cases. Any fees and charges payable by the investee companies or the underlying businesses do not directly come out of your investment. However, they will effectively reduce the returns generated by investee companies and therefore impact your investment.

More detail on the charges

Timings of the offer

The fund anticipates taking up to 12 months to fully deploy investor capital following the closing dates. However, it may take longer.

The fund has informed us it aims to allot subscriptions received before 27 March 2020 in the 2019/20 tax year. This means the investment could be eligible for carry back to 2018/19. Please note, this is not guaranteed.

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.

The details

Type
Fund
Sector
Technology
Target return
2x
Funds raised / sought
-
Minimum investment
£10,000
Deadline
27 Mar 2020
Last updated: 22 January 2020

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