Symvan Technology EIS Fund
The Symvan Technology EIS Fund offers investors exposure to early-stage technology businesses that are potentially disruptive in their sector. Symvan relies on its SEIS funds to act as incubators and expects around 75% of the investee companies within the EIS portfolio to be sourced from its SEIS funds.
Symvan intends to provide follow-on funding to companies it believes have competent management teams who have demonstrated their ability to scale the business.
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- Exposure to early-stage technology companies
- Collaborative approach with technology incubators
- Investment selection emphasises competent management teams
- Target return of 2.85x (not guaranteed)
- Aims to provide exposure to seven to ten companies (minimum portfolio of five)
- Minimum investment £20,000 – you can apply online
Symvan Capital was founded in 2013 by Kealan Doyle (CEO) and Nicholas Nicolaides (Investment Director). They met in the early 2000s and have experience in investment banking and venture capital.
The EIS fund is managed by a core investment team of four and receives support from Symvan’s advisor network. Symvan employs advisors to broaden its industry contacts and to provide sector expertise for investee companies. Currently, there are six advisors involved with the fund, with experience in media, big data, machine learning, and fintech.
Symvan looks to invest in a company across its lifecycle. The capital needs of a business are considered from first investment through to exit – so as well as providing any initial SEIS funding, Symvan will consider the requirements for later-stage, follow-on funding, through the Symvan EIS fund.
To date, Symvan has launched four SEIS funds. The SEIS funds act as incubators and are expected to provide the majority of the EIS deal flow. Symvan will provide follow-on funding to companies it believes have competent management teams who have demonstrated their ability to scale the business. However, other factors such as revenue generation, market competition and valuation can affect this decision. For deals sourced outside Symvan’s existing portfolio, the investment team will monitor the company for several months before investing.
Typically, the investment team sees over 500 deals a year that are of interest. It expects fewer than 1% of these will receive investment across both the EIS and SEIS funds.
The fund is sector agnostic. Prospective companies should ideally already be generating revenues, however, Symvan may consider those with revenues in sight e.g. a commercial contract.
The fund targets a return of £2.35 per £1 invested after at least four years (Returns and timeframes not guaranteed).
Symvan anticipates exit options for portfolio companies will include an acquisition of IP rights, a trade sale, or the introduction of new investors.
It expects most exits will take place once the companies have been held for at least four years but some could take longer.
Currently, Symvan has around £22.5 million in assets under management. Of this, EIS represents £16.6 million with the remainder held in SEIS.
Since launching the EIS fund in 2016, Symvan has invested £13.6 million into 18 companies. Approximately 75% of these were follow-on SEIS investments. The estimated hold period is expected to be between 5-7 years, although it may be longer.
The fund targets an average portfolio size of between 7-10 companies, with a minimum of five, not guaranteed.
Below are portfolio company examples from previous iterations of the fund. They are outlined to give a flavour of the types of companies you might expect but are unlikely to be part of a new investor's portfolio.
RightIndem develops and sells its own proprietary insurance claim management software.
The company was originally established as a subsidiary of Buying Butler, a digital concierge purchasing service. However, following strong early growth, RightIndem acquired the entire share capital of Buying Butler. At the time of the acquisition, Buying Butler was a Symvan investee company. For every ordinary share in Buying Butler, subscribers to the fund received 1.21 shares in RightIndem.
RightIndem aims to improve the customer journey for insurance claims by digitising the process. Its white-labelled service provides firms with a 24/7 claims platform that is easily customised. RightIndem states its solution helps insurers save more than 30% in claim costs and is 66% faster to settle compared to traditional methods, leading to higher customer satisfaction. The company recently appointed Kieran Rigby as Chairman, previously global president of Crawford Claims Solutions, the largest publicly listed independent provider of claims management solutions.
Since RightIndem’s acquisition of Buying Butler, Symvan has continued to support the company. In total, Symvan has invested just over £2.6 million.
Founded by the ex-General Counsel of CrowdCube, Tabled Technologies (“Tabled”) is a legal operations and management platform that helps legal firms and in-house counsels manage their legal and compliance workflow.
Furthermore, using its machine learning capabilities, the system can triage cases to identify legal operation bottlenecks within an organisation. The company was initially incubated at Founders Factory, a six-month accelerator programme and was also selected for the first cohort of Slaughter & May’s Collaborate – a new legal technology programme. As part of the Collaborate cohort, Tabled receives access to an expert panel for product testing and feedback as well as two dedicated mentors.
Having completed early validation for the product, the company is focused on building its pipeline. The platform is already used by Legal500 firm Markel, as well as by the in-house legal departments of Monzo and Secret Escapes.
Examples of previous exits and failures
To date, the Symvan EIS Fund has yet to make a cash exit, however, two portfolio companies have generated unrealised returns through separate acquisitions. The first, Buying Butler was a paper exit after merging with a complementary business (see RightIndem above) andthe second, B.heard, was sold in exchange for Sweetcoin, a cryptocurrency. Please note, as the fund exited Buying Butler within the three-year holding period, the investment no longer qualified for EIS tax relief.
As is to be expected, not all investments work out. One example of a failure is WonderLuk, one of the early SEIS investments, from 2014.
WonderLuk sold 3D-printed jewellery (bracelets, rings, necklaces etc) designed by architects, product and jewellery designers from around the world. Durable high tech nylon pieces were digitally created and the sterling silver elements were crafted by lost wax casting from the 3D-printed shape.
WonderLuk opened the first pop-up store for 3D-printed jewellery in Europe and in 2015 the firm collaborated with Topshop to open a 3D-printed accessories pop-up store in the Topshop Oxford Circus branch.
However, WonderLuk was not able to scale. In 2017, the business was liquidated and a small amount was returned to SEIS shareholders.
The EIS fund did not invest even though the business was seeking further money: indeed this is one example of how Symvan’s knowledge and experience gained from working with a company at SEIS stage can have potential benefits at the EIS level.
The graph below shows the annual value of £100 invested for each tax year invested in the open EIS fund for each tax year. Please note, while the fund has achieved two paper exits (one in consideration for cryptocurrency), these returns are included in the 'unrealised gains' category, rather than realised gains of cash back to investors.
The chart below shows the average performance of the total subscribed into the fund each tax year, based on valuations as at 31 December 2020, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.
Source: Symvan Capital Partners, as at 31 December 2020. Figures are net of all fees. Past performance is no guide to future performance. These figures do not include any realised returns which would be available through loss relief. 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.
Investors should note the fund has exited one investment for
a cryptocurrency consideration. This has fewer controls and regulations in
place to protect investors: valuations and realisations can also be difficult.
Exits could take considerably longer than three years: equally, the sale or exit of a company within the three-year minimum holding period could affect EIS tax relief.
A summary of the main charges and savings 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.
|Full initial charge||0%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||0%||Annual management charge||0%|
|Performance fee||20%||Investee company charges|
|Initial charge||Up to 6%|
More detail on the charges
Timing 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.
Symvan launched its first SEIS fund in 2014. This was followed by its EIS fund in 2016. The core investment team has remained unchanged for the last five years which should mean the investment strategy is now well established. The four members of the System team are supported by its network of six advisers. The fund continues to build its track record with some initial traction (in the form of two paper exits) although it is yet to experience a cash exit.
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- Target return
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