SuperSeed Venture Fund

SuperSeed Ventures LLP (“SuperSeed”) is a new venture capital business. 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.

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 asset 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.

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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, SuperSeed has made investments into eight software businesses (July 2020). 

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.  

Scribeless - SuperSeed Venture FundScribeless (recent investment)

Scribeless is a digital handwriting business which helps companies improve customer engagement.

Using machine learning and robotics, Scribeless can learn and recreate individual handwriting styles including small imperfections and personal nuances. Clients can choose from a selection of ready-made styles or create their own. Once a message is finalised, Scribeless uses its advanced printing technologies to accurately reproduce the content at scale.

Scribeless sells its service globally, and has production facilities in the UK and US, with plans to open soon in Canada. SuperSeed participated in a £450k seed funding found in the summer of 2019 at a £1.8 million valuation.

MetaDataWorks – SuperSeed Venture FundMetaDataWorks (recent investment)

MetadataWorks has built a metadata management platform using an innovative metamodel originally developed in partnership with researchers from Oxford University. Put simply, the platform supports medical researchers on identifying, normalising and using medical data. Historically, it could take more than six months for medical researchers to identify relevant patient data from sources such as NHS trusts. With MetadataWorks, this research process could be dramatically reduced, increasing the efficiency of researchers and allowing them to deliver more accurate medical insights, faster. 

SuperSeed co-led the company’s first investment round in 2019 and supports the management team in developing and refining its go-to-market strategy. In the half year since closing the investment, revenue growth is gaining traction and the company seems on track to meet and exceed its 2020 business targets.

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.

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 new EIS fund with no 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.  

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: 17 September 2020

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