SuperSeed Venture Fund

SuperSeed Ventures LLP (“SuperSeed”) is a venture capital business founded in 2018. It was set up by two technology entrepreneurs, later joined by a third, who between them have previously founded, grown and sold businesses with total exit proceeds in excess of £25 million. SuperSeed launched its first fund, SuperSeed Venture Fund, in 2019.

The fund seeks to invest in eight to 12 B2B Software-as-a-Service (SaaS) businesses using artificial intelligence and data to provide innovative services. SuperSeed aims to back businesses at an early stage in their development and use its experience to help them achieve their first £1 million in revenue. 

Since launching in 2019, the fund has raised £2.9 million from investors and made 16 investments into 14 investee companies (April 2021):

  • Of the five companies backed in 2019, two have grown from pre-revenue to an average £197k annual recurring revenue (ARR), two have grown from £7k and £115k to £492k and £425k ARR respectively, and a fifth is up 33% to £370k. 
  • Of the five companies backed in 2020, one has grown revenues fourfold and has achieved the £1 million revenue milestone, the other four have seen average ARR grow from £143k to £190k.
Remember: past performance is not a guide to the future. 

The partners of SuperSeed are committed to personally investing a minimum of 10% of assets under management up to the first £2 million, and 5% of assets under management thereafter.

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.

Read important documents and apply

Highlights

  • Targeting a portfolio of 8-12 investee companies
  • Early-stage B2B AI and SaaS sector focus
  • Invest alongside a team of successful technology entrepreneurs with collectively £25 million in exits
  • The fund intends to help investee companies achieve their first £1 million revenue
  • Targeting 3x return over a five to seven-year holding period (not guaranteed)
  • Minimum investment £25,000, you can apply online

The manager

SuperSeed Ventures launched in 2018 and the SuperSeed Venture Fund in January 2019. The business was founded by Mads Jensen and Dan Bowyer, both successful technology entrepreneurs. In 2019, Dan and Mads were joined by Daniel Pitchford, who serves as Venture Partner.

They have a combined 60 years of operational experience in AI, B2B SaaS and sales, having collectively achieved four exits as entrepreneurs and four as investors in Software, AI and Digital Services, generating total exit proceeds in excess of £25 million. 

Mads Jensen is the Managing Partner of SuperSeed. He has 20 years of experience as a technology entrepreneur. In 2009 he founded Sefaira, a software company specialising in cloud-based computing solutions for high-performance energy-efficient building design. Mads took the business from inception to global market leader, eventually selling it in 2016. Mads is also a competent coder and author of multiple US patents in data and SaaS. 

Dan Bowyer has been involved in technology for over 20 years, unusually, after a brief but successful stint in an international boyband in the early 90s. Dan has since built six IT services and digital businesses, achieving two exits. 

Daniel Pitchford is a Venture Partner. Daniel is not part of the investment committee but will help to mentor and advise investee companies. Daniel co-founded the world’s first and largest AI news and event company, AI Business, which he sold in 2017. Daniel is also the author of the first book dedicated to the practical application of AI in business. 

The three partners are joined by James Sore, previously Chief Investment Officer at Syndicate Room, James is an experienced early-stage investor, and has arranged deals and invested in over 80 start-ups. 

The Partners of SuperSeed Ventures have committed to invest a minimum of 10% of AUM up to the first £2 million raised by the fund and 5% of AUM thereafter.

Investment strategy

The founders seek to use their first-hand experience to help founders achieve their first £1 million in revenue. 

The fund will primarily invest in businesses involved in:

  • B2B Software as a Service (B2B SaaS) – the management believes this area is attractive because of the potential for a recurring revenue stream and for cost-effective distribution to a global audience. 
  • Artificial Intelligence (AI) – the management sees this as one of the most exciting growth areas. AI is often described as the ‘fourth industrial revolution’ with the potential to disrupt nearly every sector in every country.  
  • Data – because it is the raw ingredient of AI and crucial to its development. Indeed, data and originators of unique datasets used for artificial intelligence are becoming increasingly valuable.

SuperSeed sources potential investment opportunities from over 50 incubators and early-stage accelerators. This identifies over 1,000 start-ups looking for investment. The team expects to review 100-150 start-ups in person and invest in 8-12 each year. SuperSeed seeks to invest in companies which have a market-ready, or nearly market-ready product. Interestingly, as part of its due diligence process, SuperSeed works with company founders to see if they can sell their own products. This helps establish market readiness and flag any areas for improvement.

Once invested, SuperSeed seeks to support investee companies by providing sales resource and sales strategy advice where needed. Additional help is available via the SuperSeed Accelerator program, which comes at an additional cost but is optional. Fees are negotiated separately and investment into a company is not conditional on it joining the accelerator program.

Target returns

The fund targets a return of 3x after five to seven years, excluding any EIS tax reliefs, not guaranteed. 

Exit strategy

SuperSeed aims to provide hands-on support to investee companies to help them achieve their first £1 million in revenue, and potentially prepare them for a Series A funding round. The expected holding period for investments is between three and seven years (not guaranteed) but could be longer. Following any sale of qualifying shares in a company, the sale proceeds will be paid out to investors, so any distributions from the fund (not guaranteed) are likely to be paid over a period of time.

Portfolio

The fund aims to invest in a portfolio of eight to 12 investee companies (not guaranteed).  Investments will be made into early-stage businesses with revenues of less than £1 million. 

Since launching in 2019, the fund has raised £2.9 million from investors and made 16 investments into 14 investee companies (April 2021):

  • Of the five companies backed in 2019, two have grown from pre-revenue to an average £197k annual recurring revenue (ARR), two have grown from £7k and £115k to £492k and £425k ARR respectively, and a fifth is up 33% to £370k. 
  • Of the five companies backed in 2020, one has grown revenues fourfold and has achieved the £1 million revenue milestone, the other four have seen average ARR grow from £143k to £190k.

Remember: past performance is not a guide to the future. 

The companies outlined below are historic investments made by the fund in its previous iterations and give a flavour of the types of companies a new investor might expect. EIS funds tend to be managed on a discretionary basis so each individual portfolio is likely to be different.  

Ai Build – SuperSeed Venture FundAi Build  (recent investment)

Founded in 2015, Ai Build has developed an AI-powered SaaS platform that enables factories to deliver large-scale 3D printing at remarkable speed, such as car parts and aerospace components.

The two founders realised that whilst 3D printing had come a long way, it was still extremely difficult to produce large, complex parts with the consistency required by the manufacturing industry. Parts that only take a few hours of printing time, could take manufacturers weeks or months to prepare.  In addition, the process heavily relied on human labour, which accounts for up to 86% of the production costs. 

Ai Build’s platform uses AI and automation to address this and reduce human labour cost by 90%. 

The business is reportedly working with a number of leading automotive and motorsport brands and has been selected to participate in the ATI Boeing accelerator program. 

Proceeds from its latest funding round, in which SuperSeed invested £288k, are to be used to hire additional software engineers, build its sales team and reach its first £1 million in annual recurring revenue – not guaranteed.

kleene.ai – SuperSeed Venture FundMonoro Ltd (Kleene.ai)

The rise of cloud data warehouse providers, such as Snowflake, has fuelled a step-change in the computing power available for organisations to process and analyse large data sets. However, unlocking the value of this analysis is often prohibitively expensive, requiring specialist expertise. Kleene.ai is a cloud-based SaaS business that provides tools to extract, load and transform data without hiring data engineers.  

The company was founded by Andrew Thomas (CEO) and Matt Sawyer (CDO), who previously worked together at JustEat. The pair founded Kleene.ai after noticing organisations incurred large time and financial costs when preparing data from analysis. 

SuperSeed invested £120,000 into the business as part of a $1.5 million funding round alongside Episode 1 Ventures. Proceeds from the funding round are to be used to further expand the team and deliver on its product road map.

Exits and failures

The SuperSeed Venture Fund has not experienced any exits or failure to date. 

Performance

The SuperSeed Venture Fund launched in 2019 and therefore has a limited performance track record.

The chart below shows the average performance of the total subscribed into the funds each tax year, based on valuations as at 6 April 2021, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Source: SuperSeed Ventures, as at 6 April 2021. Performance figures are supplied by SuperSeed Ventures and are net of all fees, based on SuperSeed Ventures’ valuation methodology. Past performance is no guide to future performance. These figures do not include any realised returns (exits) as there have not been any. In the above examples, initial tax relief of up to 30% could also apply – remember tax rules can change and tax benefits depend on circumstances.

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, or even be prepared for all companies to fail.

The nature of businesses in the portfolio means the first round of funding is unlikely to be the last. Future rounds may dilute existing investments. 

Charges

A summary of the main charges is shown below. Some of these will be payable by the investor, whilst others by the investee companies. 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 Up to 2%
Wealth Club initial saving
Net initial charge through Wealth Club Up to 2%
Annual management charge Up to 2.5%
Administration charge
Dealing charge
Performance fee 20%
Investee company charges
Initial charge Up to 5%
Annual charge Variable
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

Timing of the offer

SuperSeed anticipates taking up to 12 months to fully deploy investor capital, not guaranteed.

Our view 

This is a relatively new EIS fund with a limited performance track record, focusing on exciting but high-risk sectors.

The previous experience of the partners at SuperSeed could help them navigate the risks, identify businesses with potential and add value to them. It could also help that the team has a clearly defined objective: to help companies generate their first £1 million in revenue. Companies backed by SuperSeed in 2019 and 2020 appear to have made progress towards achieving this milestone. Past performance is no guide to the future. 

The question is now whether SuperSeed can translate its experience and a well-defined investment strategy into tangible results for investors. The partners are aligned to the fund having committed their own capital in the fund. SuperSeed Ventures may appeal to both software entrepreneurs seeking a supportive early-stage investor, and to investors seeking to augment their existing portfolio with exposure to early-stage B2B SaaS and AI businesses. 

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
3x
Funds raised / sought
-
Minimum investment
£25,000
Deadline
Discretionary
Last updated: 10 June 2021

News about EIS Investments. Read all