SageTech Medical EIS

MedTech business with patented technology capturing waste anaesthetic gas, that could help hospitals save £millions and cut emissions

Surprisingly, when surgical patients breathe in anaesthetics, they metabolise less than 5% of the anaesthetic gas. 95% of the gas is exhaled, mostly unchanged, and then pumped out of the building into the atmosphere as a greenhouse gas emission. 

In the UK, it’s estimated that the NHS emits as much from the use of gas anaesthetics as the commute for all its 1.3 million staff.

SageTech Medical Equipment Limited (“SageTech” or the “Company”) has developed patented technology that captures and purifies waste anaesthetic gas more environmentally sustainably and efficiently than current extraction solutions – for a third the capital cost. 

The Company has received industry support from the UK Environment Agency, DEFRA and the NHS Sustainable Development Unit. Management has also worked closely with the Association of Anaesthetists and European Society of Anaesthesiology’s (ESA) environmental task force and has run several successful pilots with the NHS, with first sales expected later this year – not guaranteed. 

The Company also aims to be first-to-market in the UK recycling and re-selling anaesthetic gases by the end of 2022 (not guaranteed). 

Led and advised by EMV Capital, a subsidiary of healthcare and sustainability group NetScientific plc, the Company is now raising up to £1.6 million under EIS to fund its ongoing development. Wealth Club has an allocation of £500k. 

Based on the Company’s forecasts, target mid-case return is 6x (IRR 43%), high case 8x (IRR 51%) after five years (after performance fees but before EIS tax relief) – high risk and not guaranteed.

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.

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SageTech Medical EISThe deal at a glance

Type Single company EIS private offer
Stage Pre-revenue
Date started trading 2015
Funding to date £4.4 million (£3.37 million equity, £1.07 million grants)
Co-investors EMV Capital, syndicated private investors and family offices, high net worth investors
Sub-sector Medical devices
Fully diluted pre-money valuation £12.4 million
Market size $9.4 billion
Business model B2B
Revenue to date Pre-revenue – £0.6 million revenue forecast in 2021 (not guaranteed)
Revenue model Sale/lease of machines and ongoing service contracts
Profitability forecast from May 2023
Forecast revenue in year 5 £24.7 million
Forecast EBITDA in year 5 £8.1 million
Target return in year 5 6x
Target IRR 43% IRR
Projections and targets are for illustration only and are not guaranteed


  • Novel, patented medical equipment that aims to capture and purify waste anaesthetic gas at 30% of the capital cost
  • Successful trials show the product could save NHS and other healthcare providers money, deliver environmental targets and increase hospital flexibility 
  • Final pilots with three NHS trusts in Q1 2021, 23 more trusts in the pipeline
  • Large available market with limited competition 
  • Experienced management team and board with track record in scaling venture-backed businesses
  • EMV Capital leading £1.6 million funding round; £500k allocation for Wealth Club members
  • Minimum investment £20,650 (350 shares at £59)
  • Target return 6x (43% IRR) – not guaranteed
  • Private pre-revenue single company investment with no diversification – high risk

I’d like to congratulate SageTech for delivering innovation which has huge benefits to our environment and will reduce the cost of anaesthesia delivery across the world.

Dr Kathleen Ferguson – President, Association of Anaesthetists

This overview is based on the information available in the offer documents prepared by the SageTech management team and reviewed by EMV Capital. Wealth Club has not reviewed or verified the information included, the Company's forecasts or the deal details. Please read the offer documents carefully to form your own view and ensure you wholly understand the potential benefits and risks.

The business

SageTech is an EIS-qualifying innovative medical technology and equipment company founded in 2015 and headquartered in Paignton, Devon. Its patented technology aims to capture and process the significant amount of anaesthetic gas that goes to waste during medical procedures. 

Less than 5% of the inhalational agents in anaesthetic gas is metabolised by the patient. The rest is exhaled unchanged and, in current practice, hospital ventilation systems pump this directly out into the atmosphere – as a greenhouse gas emission. 

With the UK bound by the 2008 Climate Change Act to reduce greenhouse gas emissions across the economy by 80% by 2050, the NHS has set itself a similar target.

The NHS produces 5.4% of the UK’s greenhouse gases – estimated to be more than all aircraft departing from Heathrow Airport annually. SageTech’s solution could potentially help the NHS reduce this by up to 80,000 tonnes CO2e (carbon dioxide equivalent) a year.

Another benefit of SageTech’s system is that it is not tied to fixed infrastructure– meaning it can be set up (and scaled up) flexibly anywhere in a medical facility, allowing anaesthetic gas to be used and waste-processed wherever needed. 

By contrast, conventional solutions consist of high-capex infrastructural ventilation systems, making it hard for a hospital to expand or re-allocate its ICU and operating theatre capacity – crucial in the event of epidemic outbreaks or catastrophe. The Covid-19 crisis has highlighted this shortcoming – and the need for low-capex flexibility in anaesthetic systems, which SageTech technology could potentially provide.

SageTech’s manufacturing is outsourced to two partners in the UK, with limited final assembly completed at the Company’s headquarters in Devon. The Company currently has 10 employees.

Over £4 million has been invested in the technology to date, including over £1 million in grant funding from Innovate UK.

The Company has a skilled management team and board with experience in scaling venture-backed businesses in allied industries. CEO Dr Iain Menneer grew revenues at listed veterinary pharmaceuticals group Animalcare Group plc (previously backed by Octopus Investments) from £12 million in 2013 to over £62 million in 2017 as CEO. 

The Company’s advisors, EMV Capital Ltd (“EMV”), have experience introducing products to the healthcare industry globally. EMV is an award-winning investor in high-tech B2B businesses and part of life sciences and sustainable technology investment group NetScientific plc. This provides the Company access to an ecosystem with strong links to the NHS and the healthcare industry in the UK and globally. John Clarkson, Chairman of NetScientific plc, is a recently appointed Investment Director at SageTech and provides ongoing strategic advice to the Company. 

How does the SageTech equipment work?

In 2019, SageTech was featured on BBC Spotlight – watch video:


The system, comprised of automation and advanced chemical engineering, allows hospital staff to capture waste gas easily on-site with the potential for recycling it, instead of letting it be pumped out of the hospital as a pollutant.

Capture canisters are connected to the exhaust stream of anaesthetic machines. Waste anaesthetic gases attach to a substrate within the canister. Full canisters are then loaded into SageTech’s patented automated extraction machine on the hospital premises.  

The machine extracts the waste from the canisters, using supercritical carbon dioxide to condense the gases to liquid form, then stores it. Once capacity is reached (approximately 30 litres), the bulk liquid waste is transported to the Company’s processing facility in Devon for purification. Crucially, the canisters can be re-used in the operating theatre.

Further product development to recycle and re-sell anaesthetic gases is on-going and expected to launch to market by the end of 2022. 

Regulation and IP

The SageTech capture system requires regulatory approval as a Medical Device and its recycle process will require approval under MHRA Good Manufacturing Practice regulations. The Company is preparing to apply for these with the help of a regulatory expert, formerly of the British Standards Institute. 

SageTech has already received ISO9001 accreditation for its capture process and will now file for ISO13485 and Class 1A medical device accreditation with a view to getting this approved by the end of Q2 2021.

The Company plans to support an application to MHRA for its recycle process with data from NHS trials due to commence in Q1 2021. This filing is planned to be made in 2022.

SageTech’s extraction technology is patented. Management believes SageTech’s ability to extract and store waste gases condensed to liquid form, enabling the re-use of canisters, is novel.

Three further patents have been filed around refinements to the system, use of supercritical fluids in the manufacture of virgin anaesthetic gases, and wider applications such as industrial halocarbon processing and the recycling of other gases. 

Whilst the Company expects to gain regulatory approval, it is at this stage not guaranteed.

NHS trials and commercialisation 

The Company plans to sell or lease extraction machines to healthcare providers, initially in the UK to the NHS and potentially other healthcare providers. It will encourage customers to sign up to service and maintenance contracts for canister and waste processing, which will provide a longer-term revenue stream.

Following a successful technology trial with Newcastle NHS trust in 2020, pre-commercial pilots are now due to launch in Newcastle, Royal Cornwall and Royal Devon & Exeter NHS Trusts in Q1 2021. Predicated on these being successful and regulatory approval for its capture process being received, the Company expects first commercial sales in Q3 2021 (not guaranteed).

SageTech has developed a wider pipeline of enquiries from 23 other NHS trusts and from private practices across Europe and the US, before starting any marketing. These include the well known Guy’s and St Thomas’ NHS Foundation Trust. Once regulatory approval is confirmed in the UK, the Company will target private markets overseas, initially in Europe, from 2022.

Having previously worked closely with SageTech Medical in a clinical environment, Newcastle Hospitals would wholeheartedly give their support to the pioneering innovation that is proposed to capture extremely environmentally damaging waste anaesthetic gases in recovery suites of operating theatres. The benefit to the environment is clear.

James Dixon – Head of Sustainability, Newcastle Hospitals NHS Foundation Trust

The offer

The Company recently closed a £1.3 million funding round in November 2020, led by EMV.

Building upon that, the Company is now raising up to £1.6 million under EIS, in a follow-on funding round also led by EMV. EMV Capital has indicative commitments of circa £500k from its sources in this round, with other ongoing discussions. Wealth Club has an exclusive allocation of £500k. The pre-money valuation is £12.4 million, a 12.5% increase on the previous round. 

The Company believes the higher valuation is supported by the progress it has made: 

  • Proven its technology with Newcastle NHS Trust and grown its NHS pipeline
  • Secured ISO9001 accreditation
  • Closed previous £1.3 million funding round and secured balance sheet
  • Strengthened its board and corporate governance documents

Funding in this current round will primarily be deployed towards product development and commercial launch, as well as on staffing costs and scaling up the sales and marketing team.

The Company expects it will require a further £1.8 million of funding by 2022. Management intends to raise this through further grant funding and/or a joint development agreement with a pharmaceutical or manufacturing partner – not guaranteed.

If all can go according to plan, SageTech forecasts revenues of £24.7 million and EBITDA of £8.1 million in year 5. It targets a mid-case return of 6x (IRR 43%), high case 8x (IRR 51%) after five years (after performance fees but before EIS tax relief) if the business achieves its forecasts. Bear in mind these are target returns for a high-risk offer, not guaranteed. This is a pre-revenue company still to achieve regulatory approvals.

Covid-19 and Brexit impact

Initial trials of the SageTech technology were delayed as NHS Trusts focused on Covid-19 challenges. However, trials have now been successfully completed. More widely, management believes the pandemic has demonstrated the need for use-case agility within ICUs and operating theatres, to cope with seasonal demand, outbreaks and other crises. Indeed, the Company has seen a significant increase in enquiries from NHS trusts in the UK and medical providers overseas, despite no outbound marketing. 

Management does not consider Brexit will materially impact the business, although it remains uncertain. Manufacturing is outsourced and the significant majority of parts are off-the-shelf and also available from the US. Potential manufacturing cost inflation and time delays have been factored into the financial plan.


The anaesthetic machine market – SageTech’s initial market – is valued at $9.4 billion and growing at c.8% per annum. 

Once SageTech develops a recycled gas solution, the Company will enter the anaesthetic agent and anaesthetic recycling markets – not guaranteed. The anaesthetic agent market is valued at $1.3 billion, while the anaesthetic recycling market appears new with no clear market leader. 

Blue Zone Technologies (Canada) and ZeoSys GmBH (Germany) are SageTech’s closest competitors. However, neither appear to have scaled or raised significant funding. SageTech believes its capture and purification process provides a stronger commercial and environmental model – not least because both competitors’ solutions require capture canisters to be processed individually and offsite – with significant associated logistic and environmental costs.

Both Blue Zone (Desflurane) and ZeoSys (Sevoflurane) have received regulatory approval in Canada and Germany respectively for their recycled gas solutions, which provides a beneficial precedent for SageTech’s own approval. Blue Zone still appears relatively small, with only 10 employees and no clear presence in Europe. Meanwhile, management has confirmed early evidence of hospitals preferring SageTech’s solution over ZeoSys, citing the above-mentioned stronger commercial and environmental model.

Exit options

As with all EIS companies, there is the option of a trade sale, a sale to another investor, refinancing or a stock market listing. 

Management believes the most likely exit route for SageTech to be through a trade sale to a pharmaceutical business, anaesthetic machine manufacturer or medical waste management company. Management will seek a joint development agreement with a partner across these sectors – Baxter’s recent partnership with ZeoSys demonstrates the interest in the sector from large healthcare businesses.

Exit options and timeframes are not guaranteed. 


CEO Dr Iain Menneer leads the executive team. Iain joined SageTech in late 2019, after 15 years at AIM-listed veterinary pharmaceutical business Animalcare Group plc, which was backed by Octopus Investments and Hargreave Hale. During his tenure as CEO from 2013 to 2017, revenues grew from £12 million to £62 million and EBITDA from £2.6 million to £9.7 million. 

Following Iain’s appointment, co-founder Mark Rushworth moved into a non-executive position and continues to support the Company’s commercialisation plans. 

Iain is supported by an experienced multi-disciplinary senior team. The technical team is led by Head of Clinical Engagement Dr Matt Gopal, Head of Laboratory Dr Steve Wileman and Head of Quality Control Dr Mel Priston, who share more than 50 years’ medical research and clinical experience across human and animal health. Head of Operations Steve Yates and Financial Controller Leslie Casey complete the senior management team. 

Board of directors

Chairman Guy Beringer is a former Senior Partner of Allen & Overy. Since 2008, Guy has taken several non-executive roles, including at Stonehage Fleming family office and engineering business ATC Group.  

Non-executive director Peter Vickers has been Chairman and Managing Director of Vickers Oils for the past 25 years, growing the business significantly under his tenure. 

Non-executive director and co-founder Mark Rushworth and non-executive director John Clarkson (see below) complete the board.

EMV Capital

EMV Capital, a wholly owned subsidiary of NetScientific plc, is a London-based award-winning investor focused on B2B companies. EMV invests in – and provides advisory services to – investments over a range of technologies, including high-tech and healthcare businesses. EMV’s team has led and structured investments alongside some of the world’s leading corporations, including ABB, Philips Lighting, Evonik Industries, Mitsubishi and Flex. 

John Clarkson, Chairman of NetScientific plc, is a recently appointed Investment Director at SageTech and provides ongoing strategic advice. EMV advises the Company on positioning itself for the most successful exit and on driving shareholder value and is able to draw on the combined network of EMV and NetScientific plc in the healthcare industry.

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 Information Memorandum, which contains further details on the considerable risks, alongside the Wealth Club Risks and Commitments.  

This is a single company EIS offer with no diversification. It involves investing in an early-stage, pre-revenue business which is yet to secure regulatory approval, which is by nature high risk and prone to failure. You could lose the amount you invest.

To secure its first commercial sales, the Company requires regulatory approval for its technology. The Company is targeting commercial sales into the NHS – the NHS procurement process can be complex with significant lead times. Any delays in receiving regulatory approval or in successfully navigating NHS procurement processes would impact the Company’s ability to deliver its forecasts.  

In addition to this current round, the Company requires an additional £1.8 million by 2022 to meet its forecasts. This is not guaranteed, and if funding in this round or future rounds were not to be secured, this would impact the Company’s ability to deliver its forecasts.  

The value of tax benefits depends on circumstances and tax rules can change. 

If the Company were to achieve an early exit, this could affect EIS tax relief. Management is targeting an exit in year five – however, SageTech is an early-stage pre-revenue business and an exit could take longer to achieve.

Structure and fees

Investors are investing in the Company directly, so will pay no direct initial or ongoing charges. EMV, which is leading this funding round and has arranged this private offer, will pay an introducer fee to Wealth Club equal to 4% of capital raised. 

On exit, EMV is entitled to a performance fee predicated on investors achieving an exit greater than 1.1x. EMV will charge investors a 20% performance fee on investor profit over this hurdle. EMV will pay Wealth Club 15% of this fee, which equates to an overall 3% performance fee. There are no other fees paid to Wealth Club.  

Our view

SageTech has invested significant time and capital in its patented technology, which it aims to start commercialising in 2021 in a market worth over $9 billion.

It still requires regulatory approval and additional capital to commercialise and scale. To help drive this, the Company has recently recruited a highly experienced management team and board, with a track record of growing venture-backed businesses from start-up.

SageTech appears one of the first movers in the nascent anaesthetic recycling market. With increased governmental, NHS and societal focus on sustainability and the impact of anaesthetic gases, SageTech could be well positioned to benefit. However, there are no guarantees and experienced investors should form their own opinion.

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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

Single company
Healthcare & Technology
Target return
6x (43% IRR)
Funds raised / sought
£500,000 sought
Minimum investment
5 Feb 2021 for first close
Last updated: 12 January 2021

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