MMC Ventures EIS Fund

MMC Ventures is a well-established technology investment manager. This EIS portfolio aims to invest in 8 to 12 technology-enabled businesses.

Highlights

  • Evergreen EIS fund investing in technology-enabled businesses
  • Focus on four sectors: fintech, digital media, consumer internet and business software
  • Mix of new and follow-on investments
  • £25,000 minimum investment

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

The manager

MMC Ventures started in 2000 as a syndicated investment service for high net worth individuals. It was founded by Bruce Macfarlane, the current managing partner, Alan Morgan, the current chairman, and Allan Cockell. It launched its first EIS fund in 2005. Today MMC has circa £300 million under management. 

MMC has maintained a consistent investment style for 18 years. It only invests in high-growth technology-enabled businesses.

MMC was started as a vehicle for its founders and like-minded individuals to invest their own money. This ethos continues to this day. This helps aligns the management team's interests with investors.

Watch an exclusive video interview with Anna Slemmings and Henry Emson of MMC Ventures:

Recorded 18 October 2017

Strategy

MMC focuses on four sectors: fintech, digital media, consumer internet (including ecommerce), and business software.

New investors into MMC’s EIS portfolio should receive approximately half of their investment into companies targeting consumers (B2C) and half into businesses selling to other businesses (B2B).

MMC does not invest into brand new firms. All companies must have sales and revenue, ideally annual sales of at least £1 million and up to £5 million in total sales. They will have often previously received business angel financing or seed money. MMC then assesses how much further financing is needed to reach a cash break-even point.

Any new potential deal is screened by two associates in the investment team. If they think it has merit they will meet the entrepreneurs behind the business. If this is successful, there will be a further meeting with the entire MMC investment team followed by a site visit. The team then presents a paper to MMC’s investment committee. Virtually the entire MMC investment team will meet a company prior to any investment.

In total, MMC targets an initial investment of £1 million to £5 million in the first funding round. Subsequent funding could reach up to £12 million to further support investee companies as they grow. 

New investors are likely to have their money invested into 8 to 12 companies within a 12-18 month period – ideally into 10 companies, half new investments and half follow on ones.

As well as providing capital, MMC aims to engage with investee companies to help them grow and realise the best returns. They assist companies in areas such as senior hiring, strategy, fundraising, governance and exit.

Target return and exit strategy

The fund aims to return 2–3x the invested amount over a 3-8 year investment period. This is not guaranteed.

MMC assesses the routes to exit and considers potential buyers when it conducts its initial due diligence on investee companies. A listing on AIM is one exit route. Private equity and trade buyers have also bought companies in the past. Past performance is not a guide to the future.

Portfolio company examples

Note these are previous EIS investee companies and may not form part of a new investor’s portfolio. They are outlined to give examples of the types of companies an investor might expect.

Signal Media is a media monitoring platform that uses AI (artificial intelligence) to help knowledge workers, communications teams and research executives to monitor markets and get actionable business insights from the world’s media.

The company principally targets the financial services, legal and professional services sectors. Its clients include British Airwaus, E.ON and TalkTalk. 

MMC first invested in Signal Media in late 2016 as part of a £5.8m funding round, co-investing with Hearst Ventures. More recently, they were the biggest contributor in a $16 million series B funding round. The funding will be used to drive expansion into new markets, power AI product development and grow Signal’s team. 

Gousto is a recipe box business that delivers a weekly box of healthy, responsibly-sourced ingredients, providing everything needed in the right quantities for couples or families to cook. The business has grown rapidly: in early 2019 it reported year-on-year growth of 170% and it now delivers over 1.5 million meals every month. 

An investment round completed in January 2019 brought in an additional £18 million of funding, bringing the total raised since launch to £75 million. MMC Ventures participated alongside Unilever Ventures, Hargreave Hale and BGF Ventures. 

Tyres on the Drive (TotD) allowed customers to compare prices, order tyres online and have an engineer fit new tyres at a time and location of their choice. 

MMC first invested in 2012 when TotD has one regional depot and 7 vans. It then took part in a £10.5 milion funding round in January 2017 alongside Halfords plc.

In 2019, the company had agreed further funding as well as a commercial deal with a new US partner (a leading tyre distributor in North America). Unfortunately, the deal did not complete and this resulted in a liquidity crisis with the company entering administration in January 2019. An insolvency agreement was made to secure all jobs and to allow the business to continue however investors received no value from the shares and were able to claim loss relief.

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.

Fees

A summary of the fees and charges is shown below.

Full initial charge 3%
Annual charge 2.5%
Annual custodian fee Nil
Dealing fee Nil
Performance fee 20%

More detail on the charges

Our view

MMC Ventures is a credible and experienced venture capital company. It focuses on four key high-growth areas and has invested in these sectors consistently for a number of years. The fee structure is aligned with investors’ interests: from year three the annual fee is accrued but only paid to MMC after the first exit. We also like the fact that the management team invests a significant amount of their own money in the fund.

Read important documents and apply

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
2–3x
Funds raised / sought
£29.0 million raised
Minimum investment
£25,000
Deadline
Allotting in 2019/20
Last updated: 29 March 2019

News about Enterprise Investment Scheme. Read all