Velocity Technology SEIS Fund

This SEIS fund has a focus on innovative consumer technology businesses. 

Highlights

  • Focus on consumer technology startups with scale up potential
  • Experienced management team
  • Target return of £2.50 per £1 invested (not guaranteed)
  • Minimum investment £25,000

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 offer

The fund is a partnership between Velocity Capital Advisors, the investment consultant team, and Thompson Taraz, the investment managers. The team is headed by Rajeev Saxena and Bil Bungay. 

Each fund expects to invest in ten companies, however, this is dependent on whether the fund achieves its targeted raise. Investors will be offered a minimum of three investments.

As much as possible, the portfolio will be spread across companies at different stages. It is expected that around 60% of subscriptions will be allocated to later-stage opportunities with the remaining 40% split equally between early to mid-stage companies. 

Investment strategy

Velocity will only consider companies where technology is a significant component in the business, aside from this the fund is sector agnostic.

Deals are sourced either through Velocity's personal network or through independent organisations such as Pitch at the Palace or universities. In terms of selecting compnaies, the investment team look for businesses that can demonstrate clear market need, scalability and the potential to expand outside of the UK market.

Velocity is also open to co-investing, however, it will only do so as the lead investor.

This is a relatively new offer which launched in 2016. Some examples of current investments held within the funds are detailed below: note individual portfolios will vary.

Example portfolio companies

Velocity EIS – IynkIynk

The tattoo industry is notoriously fragmented - the most common form of recommendation is still word of mouth. Iynk's solution is a moible platform which connects tattoo artists with potential customers.

Users can find their closest artists, look through their portfolios and importantly, review their ratings. What's more, the app is all inclusive. Users can book and pay for appointments while also providing reference images for the artist all within the app itself. In turn, this provides artists with an efficient booking system and removes the need for a personal website.

The app is expected to launch this summer with a number of top artists already signed onto the platform.

Velocity EIS – ZilverZilver

Founded by Pedro Lourenço, an acclaimed fashion designer, Zilver is a brand focused on producing gender-neutral, sustainable fashion.

Over 10% of global warming can be attributed to the fashion industry. To combat this, brands have become increasingly more 'eco-friendly', however, leading designers such as Stella McCartney have so far only achieved around 17% sustainability. Zilver, on the other hand, is 98% sustainable. Nearly every product is designed from recycled material, some of its jackets have been made from bottle tops and even apple cores.

The company has already released three collections and is now one of the leading brands on Farfetch, an online luxury retail platform. Velocity first invested through its SEIS fund but has since provided follow-on funding through its EIS.

Velocity EIS – NextUpNext Up

Building on the success of other content streaming platforms, Next Up offers an online subscription service that provides exclusive Stand Up comedy performances. With new shows released every week, Next Up delivers an extensive collection of both breakthrough and well-established comedians to a dedicated audience.

Going forward, Next Up is looking to increase its customer base - this should be helped by its recent inclusin in the Apple TV subscription service.

Target return and exit strategy

The target return is £2.50 per £1 invested although this is not guaranteed. Exits are expected between four to seven years, but this is not guaranteed. The preferred exit strategy for subsequent companies would be to list on the AIM market, however, other exit strategies will be considered.

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.

SEIS 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 SEIS 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.

Please note, some investments may fall into the 2019/2020 tax year. 

Charges & savings

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. 

Investor charges
Full initial charge
Wealth Club initial saving
Net initial charge through Wealth Club
Annual management charge 2%
Administration charge
Performance fee 25%
Investee company charges
Initial charge 5%
Annual charges 2%
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

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
2.5x
Funds raised / sought
£3.0 million sought
Minimum investment
£25,000
Deadline
25 Oct 2019 for next allotment
Last updated: 3 September 2019

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