Jenson SEIS Fund

The Jenson SEIS Fund is one of the longest-running SEIS funds, having been established the year the scheme was introduced, in 2012.

Jenson Funding Partners (“JFP”) is an early-stage investor. It follows a broadly generalist strategy, with a preference for tech-enabled businesses with a defensible offering. Companies will primarily be sourced from JFP’s existing network and those with potential may ‘graduate’ to the Jenson EIS Fund. 

To date, JFP has backed 110 companies across both its SEIS and EIS funds, investing a total of £17 million (£15.3 million via its SEIS funds).

The SEIS funds have realised £2.2 million worth of proceeds from eight investments. Of these, five resulted in positive overall returns. Looking at the whole portfolio, 41 companies are no longer trading – a failure rate of 36.3% – and several of the rest are showing significant paper gains. Past performance is not a guide to the future – these are early-stage companies, which can and do fail. 

Highlights

• Generalist SEIS fund with a preference for tech-enabled businesses 
• Aims to invest in 8 to 12 investee companies
• Highly active SEIS manager with over 110 investments in 8 years
• Extensive deal sourcing network 
• Evergreen fund
• Target return of 185p per 100p invested (not guaranteed)
• Minimum investment £10,000 - you can apply online

The manager

Jenson Solutions Ltd (“JSL”) was established in 2001 by Paul Jenkinson and Sarah Barber, to provide strategic, financial, and operational solutions to small businesses. In response to the introduction of the Seed Investment Enterprise Scheme, the pair set up Jenson Funding Partners (“JFP”) in 2012, with the aim of raising and providing capital to early-stage businesses. 

The funds are managed by a core team of seven, led by co-founders Sarah Barber and Jeffrey Faustin. Sarah is a Chartered Accountant and was part of the team responsible for creating the first Jenson SEIS Fund in 2012. She is now CEO, Partner and Board Member. Jeffrey has a background in engineering and made the transition to finance after completing an MBA in 2012. He joined JFP in 2013 and is now Chief Investment Officer and Partner, responsible for managing all aspects of the investment process. The investment team will have access to the resources of JSL where required.

Investment strategy

JFP receives over 2,000 pitches a year through its network of incubators and accelerators, universities, corporate finance houses, professional services providers, VC and PE houses.

Jenson favours businesses with scalable business models and some pre-existing momentum, run by ambitious and driven entrepreneurs. These businesses should be addressing market gaps with innovative and disruptive technology.

All potential investee companies are required to make two presentations: first to the selection committee and, if successful, to JFP’s approval committee. JFP also conducts extensive pre-selection assessments, interviewing the management teams over a series of calls and meetings to determine their suitability for the fund.

Post-investment, a JFP portfolio manager or a nominated non-executive director attends board and senior management meetings. Regular contact allows the team to monitor progress and provide support when needed, prepare companies for the next stage of growth as well as help avoid common pitfalls.

Until recently, JFP offered a mandatory ‘Investee Support Package’ for a fee. This has now been replaced by a more tailored approach, offering companies direct introductions to trusted third-party service providers. For example, JFP has connected several of its companies with a B2B SaaS professional with experience of scaling operations to help them structure their value propositions and sales processes.

Target return

The fund targets a return of £1.85 for every £1 invested, excluding tax relief, over a period of five to seven years, not guaranteed.

Exit strategy

It is anticipated most exits will take place between five and seven years after investment, although this could take longer depending on the company and market conditions. JFP will look at several exit strategies including trade sales, listing on a stock exchange, or selling its shares to a larger private equity firm. Exit options and timeframes are not guaranteed.

Portfolio

JFP is a generalist investor but prefers technology-based businesses. In total, Jenson has completed over 110 investments since its first SEIS investment in 2012.

SEIS investors will receive a portfolio of between 8 to 12 companies, with an expected holding period of 5-7 years, 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. 

Examples of previous portfolio companies

FrontM

Launched in 2016, FrontM serves businesses in environments without good internet access. Using its own patented technology, ‘Edge Intelligence’, it can create business and customer applications that work offline and require 70% less satellite data when connected.

The business is looking to address the disparity in internet access for remote spaces. In particular FrontM targets three key markets: airline passengers, cruise passengers and remote workers – an addressable market of more than 4 billion people. 

With the FrontM technology, businesses can create customised services for customers or employees. This can be anything from an inflight journey tracker to a digital workspace for remote workers. 

Jenson first made an investment into FrontM through its SEIS fund in 2019. It has since provided EIS funding in both 2019 and 2021 with the company’s valuation rising 28% between rounds. Past performance is not a guide to the future.

The Seam

The Seam was founded by Layla Sargent in 2019 after a move to London meant she could no longer rely on her grandmother for clothes alterations and repairs.

The digital tailoring platform matches individual tailors and seamstresses with those looking to repair or remake clothes, aiming to reduce waste in the fashion industry. Seam estimates that extending the life of clothes by just nine months can reduce carbon, water and waste footprints by as much as 30%.

The company has a network of over 700 makers in the Greater London area, with thousands of customers. 

In 2021 Jenson led a £250,000 pre-seed round for the company, which valued the business at £1.35 million. Past performance is not a guide to the future.

Voneus – example of previous exit

Voneus works with rural communities to provide high-speed broadband across England and Wales.

Founded by telecom veterans, Voneus can connect wirelessly to existing Superfast fibre networks using a series of transmitters. To access the new connection residents simply need to install a small receiver in their home. Current speeds are between 30-50Mbps, which should be more than enough to stream TV, use teleconferencing software or work remotely.

Voneus currently supplies thousands of homes across 50 rural communities. In August 2019, the company received £10 million in funding from Macquarie Capital, which it plans to use to upgrade its network and work towards its target of supplying up to 900,000 homes. 

Jenson first invested £150,000 through its SEIS fund in 2013 and provided an additional £420,000 in EIS funding. In 2021 Jenson exited Voneus following a partnership between Voneus and Macquarie Capital. The exit represented an average 2.6x return for the SEIS funds. 

Tapfuse – example of previous failure

As is to be expected with young companies, not all succeed. Mobile application developer Tapfuse is an example. Jenson EIS and SEIS Fund 2 originally invested in 2015. The business created multi-platform applications so that information could be shared in professional and educational institutions.

The business started positively, gaining several potential clients and developing a strong sales pipeline. However, it lost momentum due to the founder's personal circumstances. Jenson investigated possible options but ultimately struggled to find a viable alternative.

Eventually, Jenson was outvoted by Tapfuse's other shareholders, and the business was put into administration in December 2018.

Performance

Of the fund’s 110+ investments, the current portfolio failure rate is approximately 36% (December 2021). JFP has exited eight companies from its SEIS funds (of which three at a loss). Jenson has also received shares in new companies in exchange for its investments in three cases. The current cash return generated by the fund is £2.2 million, equivalent to a 1.9x return on those investments (before tax reliefs). The portfolio is also showing paper gains on a further 20 investments) . Please note: past performance is not a guide to the future.

The chart below shows the average performance of the total subscribed into the fund each tax year, based on valuations as 01 December 2021, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Performance per £100 invested in each tax year

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 / 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 EIS / 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, or even be prepared for all companies to fail.

Exit could take considerably longer than the three-year SEIS minimum holding period. Equally, an early exit could affect tax relief.

Charges

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.

Timing of the offer

The fund anticipates taking between 6-12 months to fully deploy investor capital following the closing dates. However, this is not guaranteed and it may take longer.

Our view

JFP is an active early-stage investor. It has amassed a sizeable investment portfolio of over 110 investee companies in its eight-year history. JFP may, therefore, be seen as a destination for entrepreneurs seeking seed investment – this could enhance its access to deal flow. While the investment team is small in proportion to the number of companies in the portfolio, JFP has been active in this area for almost a decade and is confident in its ability to continue identifying and supporting promising companies.

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.