Haatch SEIS Fund

New “Meet the manager” video – watch below

The Haatch SEIS fund is managed by the same team as the Haatch EIS funds: four successful entrepreneurs who have between them founded, grown and sold businesses achieving personal exits worth over $150 million. It invests in sectors the team knows well, such as software-as-a-service, on-demand, gig-economy and digital consumer and where the manager can use its considerable experience to add value. Haatch refers to this as its ‘Smart Money’ approach.

Haatch has made a total of 60 SEIS-qualifying investments to date (including 48 through its SEIS funds). In the SEIS funds, 13 are now showing an average 3.0x unrealised uplift, 32 are held at cost, one has failed and two have been exited below cost have failed (January 2024). Past performance is not a guide to the future. 

  • Target return of 10x over five to ten years - high risk and not guaranteed
  • Planned deployment into a portfolio of 9 -15 SEIS qualifying companies in the 2024/25 tax year - not guaranteed
  • Minimum investment £10,000 – you can apply online
  • Deadline: 26 April 2024 for deployment in September 2024 - not guaranteed

Important: The information on this website is for experienced investors. It is not a 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: you could lose all the money you invest.


Co-invest alongside the British Business Bank

British Business Investments, a commercial subsidiary of the British Business Bank, has a commitment of £10 million to Haatch Ventures through its £150 million Regional Angels Programme. 

The commitment will be managed by Haatch and invested alongside the Haatch SEIS and EIS Funds. Haatch intends to deploy the British Business Investments’ funds alongside all its investors in every investment.

The manager

Haatch was founded by Scott Weavers-Wright and Fred Soneya. They met at Kiddicare.com, an online baby care retailer co-founded by Scott, which became one of the UK’s largest e-commerce businesses and was acquired by supermarket Morrisons for £70 million in 2011. Whilst at Kiddicare, Scott and Fred ran the Kiddicare start-up program, working with selected start-ups, three of which achieved exits in excess of $1 billion.

This experience led to an angel co-investment joint venture, Haatch Angel, in 2013 which in 2018 became Haatch Ventures.

Scott also founded retail cloud platform Elevaate in 2014, acquired four years later for $25.7 million, and in 2022 was awarded an OBE for services to Technology and Retail E-commerce Entrepreneurship.

Alongside Scott and Fred, the other partners at Haatch are Simon Penson and Mark Bennett. Simon joined Haatch in 2019 after selling his content marketing agency Zazzle Media in a deal worth up to £37 million. Mark is Vice President of Android Partnerships at Google. Previously, he led the international business for Google Play and was managing director of the music-streaming service Blinkbox Music, which he helped grow to 2.5 million users in 18 months.

Collectively the four partners have built and sold businesses achieving total personal exits more than $150 million between them. 

They have invested in each SEIS fund tranche to date and account for 7.7% of total fund assets.

Before your subscription is invested, the cash will be held by the custodian, Mainspring Nominees Limited. After investment, shares will be held by the nominee, MNL Nominees Limited.

Meet the manager: Mark Bennett, partner at Haatch Ventures

 

Investment strategy

Haatch seeks to back entrepreneurs building disruptive digital businesses. The team focuses on B2B software-as-a-service (SaaS) models for three reasons:

  • Experience: the team has significant experience building digital businesses and should be well placed to add value
  • Scalability: low incremental costs to add new customers once the software has launched
  • Growth potential: high margins can be an efficient source of capital to fund future growth.

Each company is assessed against two key metrics: the problem it aims to solve, and the potential buyers. 

The team seeks to back companies whose products it considers capable of becoming operationally essential to its customers and building natural levels of recurring revenues. 

Haatch will also look at a company’s client acquisition plans, pricing strategies, and distribution channels to establish how well it understands its target market. While founders may be technically proficient, they are likely to need commercial support. Haatch will use its experience to advise on go-to-market strategy. Haatch believes its four partners complement each other: each has a technical product background which enables Haatch to support portfolio companies. 

The majority of Haatch’s deals are sourced from a mixture of inbound and outbound enquiries. Outbound enquires are a key focus for the SEIS fund, with Haatch seeking to back promising founders before they have officially begun to fundraise for the new venture.

Top performing businesses from within the SEIS portfolio may receive follow-on investment from the Haatch EIS fund, not guaranteed. 

Where possible, Haatch reserves board rights, so any member of the investment team can attend portfolio companies’ board meetings.

Portfolio

The fund seeks to invest in a portfolio of 9 -15 disruptive SEIS-qualifying digital companies. The manager’s first five SEIS funds have so far invested in 48 companies.

The companies outlined below are historic investments made by the Haatch Ventures SEIS Fund in its previous iterations and give a flavour of the types of companies a new investor might expect.

Made-with-intent-Haatch-SEIS.jpgMade With Intent 

Made With Intent is a B2B software platform that helps retailers better understand the intent behind their audience’s browsing patterns, allowing them to provide personalised marketing messages, boost conversion rates and generate more revenue. 

By tracking various activities, such as how long a user spends reading, how quickly they read it, what they do before and after reading it, Made With Intent’s platform can better understand whether a user is just browsing, evaluating, or ready to buy. This allows retailers to intervene with personalised marketing messages, helping boost conversion rates.

Haatch Ventures SEIS fund invested £250,000 into the business in April 2023 alongside a further £60,000 from Haatch’s BBI commitment. The proceeds are expected to be used to fund product development, sales, and customer support. 

Native-Teams-Haatch-SEIS.jpgNative Teams

Native Teams is an online work platform for freelancers, remote workers and businesses around the world. It provides the tools they need: from invoicing, to payments, employment solutions and more.

The business was launched in July 2021 by serial entrepreneur Jack Thorogood after experiencing the problems of running a global remote team first-hand. Today, it operates in 55 countries and has attracted more than 50,000 users.

Haatch SEIS fund invested in March 2022 as part of a €2 million funding round alongside several European and US venture capital firms. The proceeds helped to expand the Native Teams offering in Africa and South America.

Example of previous exits

Haatch’s SEIS-qualifying investments, made through its EIS and SEIS funds, have yet to achieve a positive exit. 

However, the team had a notable exit prior to launching the SEIS fund. In 2014, Haatch Angel made an SEIS-qualifying investment of £30,000 into Scott’s retail cloud platform business, Elevaate. 

Elevaate grew to power supplier sponsorship programmes globally for several blue-chip clients. The business was acquired by US-based Quotient Technologies for $25.7 million in 2015. The original £30,000 investment generated a return of 276x (£8.3 million). Please note, this is an unusual exit example as the founder of Elevaate is also the founder of Haatch and past performance is not a guide to the future. The £30,000 invested acquired a large initial stake in the business and qualified for SEIS relief.

VuePay – example of previous failure

As with any SEIS company, these are high-risk investments and not all will work out as planned. VuePay is an example. 

VuePay created a tool to enable content creators and influencers to monetise their content directly. Haatch invested in April 2020 alongside angel investors and supported the team to launch the minimum viable product. However, the business required a significant amount of capital to scale and the market for investment in consumer businesses quickly dried up. As a result, the investment has been written down to nil.

Performance

Haatch has backed a total of 60 SEIS-qualifying companies: 12 through its EIS funds and 48 through the SEIS fund, which launched in February 2021.

Of those backed in the SEIS fund: 13 are showing uplifts, averaging 3.0x cost, 32 are held at cost, one has failed and two have been exited below cost have failed (January 2024). Past performance is not a guide to the future. 

The chart below shows the average performance of the total subscribed into the funds each in each full tax year from 2013/14 (or from when the current strategy was adopted if later) to 2022/23. The chart is based on the latest valuations provided by the manager, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Performance of SEIS-qualifying investments per £100 (12 companies)

Performance of Haatch Ventures: SEIS fund after launch per £100 invested (44 companies)

Source: Haatch Ventures, as at January 2024. Past performance is not a guide to future performance. The chart shows realised returns (where share proceeds have been returned to investors as cash) and unrealised returns (where cash has not yet been returned and the value of the investments is based on the manager’s own valuation methodology). There is no ready market for unlisted shares. The figures shown are net of all fees and do not include any income tax relief or loss relief. The performance figures refer to SEIS-qualifying investments made through the EIS fund until 2020/21 and SEIS fund performance thereafter to 2022/23.

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 and should only form part of a balanced portfolio. As must be expected with early-stage investments, some or even all of the companies in the portfolio could fail: the fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. You should not invest money you cannot afford to lose.

There is no ready market for unlisted SEIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment. Exits are likely to take considerably longer than the three-year minimum SEIS holding period; equally, an exit within three years could impact tax relief.

To claim tax relief, you will need SEIS3 certificates, normally issued once shares have been allotted. This can take several months: please check the deployment timescales carefully. Tax reliefs depend on the portfolio companies maintaining their SEIS-qualifying status. Remember, tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

Charges

The charging structure of this fund is different from that of most of its peers. There is an investor initial charge of 10% but there are no annual fees or on-going management charges – neither to investors nor investee companies. The manager believes this structure could be more beneficial in the long term. Please note: tax relief should be available on the amount invested, after deduction of the initial charge. 

A summary of the main charges is shown below. 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 10%
Wealth Club initial saving
Net initial charge through Wealth Club 10%
Annual management charge
Administration charge
Dealing charge
Performance fee 25–30%
Investee company charges
Initial charge
Annual charge
The fees and charges above are stated exclusive of VAT, which applies in some cases, as determined by the manager. Please check the VAT position carefully in the provider documents. 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

Our view

The Haatch SEIS fund offers an opportunity to invest alongside a team of experienced entrepreneurs who have founded, grown, and sold businesses achieving personal exits worth more than $150 million between them within e-commerce, retail technology, and digital marketing. The combination of mentoring from the Haatch team, a founder-friendly charging structure and the addition of both the enhanced SEIS investment limits and British Business Investment money could make for an enticing prospect for entrepreneurs seeking SEIS funding and lead to enhanced deal flow (not guaranteed).

The fund is expected to build a portfolio of 9 –15 companies to which the team believes it can add value, in sectors it knows well. Several of Haatch’s earlier SEIS-qualifying investee companies now show promise: remember these are currently unrealised returns and past performance is not a guide to the future.

The offer could be a consideration for experienced investors looking to invest in a portfolio of SEIS companies alongside a team of experienced entrepreneurs.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. 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
10x
Funds raised / sought
-
Minimum investment
£10,000
Deadline
26 Apr 2024 for Sept deployment
Last updated: 1 November 2023

News about SEIS Investments. Read all