QUBIS Innovation Fund (SEIS)

Update (5 July 2021): Offer closed

Please note, this offer has now reached capacity. Any applications already submitted will be processed on a first come, first served basis. 

Founded in 1984, QUBIS is one of the UK’s leading technology transfer offices. It acts as the commercialisation arm of Queen’s University Belfast, which ranked as the top UK university for delivering Entrepreneurial Impact over the last two years, outperforming both Cambridge and Oxford Universities. 

More recently, QUBIS was appointed the lead partner of the North by North West (“NxNW”) ICURe (Innovation to Commercialisation of University Research) accelerator programme, providing it with access to spinout opportunities from across the UK. 

Now, QUBIS is launching its first fund and aims to invest in a portfolio of early-stage spinout companies, the majority of which will be sourced from successful cohorts of the ICURe programme. 

The fund is targeting a maximum raise of £1.5 million, of which Wealth Club has secured a £500k SEIS-only allocation. Due to investor demand, this has been increased by £150k (28 June).

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.


Highlights

  • Proprietary deal flow through NxNW ICURe Incubator
  • Strong investment process with a focus on market validation and customer discovery
  • SEIS allocation, EIS available on request
  • Portfolio of at least three SEIS-qualifying companies expected
  • Target return of 2.5x before tax relief – not guaranteed
  • Minimum investment £20,000 – you can apply online

The manager

Queen’s University Belfast (“QUB”) is a Russell Group institution and is a recognised world leader in a number of research sectors, such as life sciences, cybersecurity and electrical engineering. Its technology transfer office, QUBIS, was formed in 1984 to support spin-out companies from IP to IPO. Since its launch, it has created more than 90 spinouts, including three PLCs, and was ranked the top UK university for entrepreneurial impact for the last two years. 

In 2018, Queen’s University joined North by North West – a consortium of seven universities in the northern United Kingdom. NxNW is supported with funding from Innovate UK and acts as a pre-accelerator for university researchers to validate their business potential. As the lead partner, Queen’s University facilitates its ICURe programme and assists companies through the spin-out process. 

QUBIS is led by Brian McCaul, the Director of Innovation and Technology at the university. Prior to joining QUBIS, Brian launched two of his own startups as well as the Innovation Commons – a community platform for university Technology Transfer Offices. Brian is responsible for overseeing strategy for both the QUBIS portfolio and new company formation within the NxNW ICURe programme. He is joined by David Moore (Head of Spin-Outs), Oisin Lappin (Head of Finance), and Anne Dornan (Enterprise Network Manager). 

Within the fund structure, QUBIS will act as the company mentor. In this role, it will conduct research, carry out due diligence, and recommend potential companies to Sapphire Capital Partners, the fund manager.

Investment strategy

To be considered for the fund, companies must demonstrate quantifiable market potential. This can either be through immediate revenue-generating opportunities or by completing the NxNW ICURe accelerator programme.

ICURe is a 16-week full-time accelerator programme designed using “the lean start-up” methodology, the approach outlined in the bestselling book by Eric Ries. The programme is funded by Innovate UK and is open to all universities, although it favours opportunities in the North of England, Scotland, and Northern Ireland. 

ICURe’s purpose is to determine if companies have sufficient product/market fit and consumer demand is viable. The basic structure is as follows :

  • A team is accepted into the ICURe cohort and begins a rigorous three-month customer discovery process. During this time, teams are expected to interview over 100 potential customers. 
  • The findings are presented to an “Options Roundabout” – an experienced panel of venture capital firms, stakeholders, and investors. 
  • If successful, teams are recommended for spinout approval and apply for Innovate UK Funding (up to a maximum value of £210,000). To receive the funding, the teams must also secure an independent angel investor. If they cannot, they cannot proceed with the ICURe programme.

ICURe typically receives 60 applications each year and approximately only 16% of applicants will successfully complete the programme. 

Due to the nature of the fund, it is likely that most founding teams will have stronger academic backgrounds than entrepreneurial ones. As such, QUBIS will look to partner companies with experienced entrepreneurs from its existing network to create a balance between technical and commercial knowledge. QUBIS also has an incubator space within its office to support the growth and development of early-stage companies – allowing the fund to have daily contact with investee companies and founders.

Target return

The target return for the fund is 2.5x over a holding period of seven years (after fees and before any SEIS tax reliefs). Returns and timeframes are not guaranteed. 

Exit strategy

QUBIS anticipates that the majority of exits will take place after the investment has been held for an average of seven years, although some investments could take significantly longer. 

The investment team will work with each investee company to develop a range of appropriate exit strategies on behalf of the fund. This could include trade sales, listing on a stock exchange, or selling the fund’s share to a larger private equity firm or company.

Portfolio

The fund intends to invest in a mixture of EIS and SEIS-qualifying companies, however, Wealth Club has secured a £500,000 SEIS-only allocation. The target SEIS portfolio size is seven companies, with a minimum of three. 

QUBIS will not target specific sectors but instead will focus on the potential of the companies. Historically, it has a track record of commercialising research from data analytics, cybersecurity and life & medical sciences, however, its existing portfolio spans various sectors.

The companies outlined below are historic investments made by QUBIS. They are examples of the types of companies an investor might expect but are unlikely to form part of a new investor’s portfolio. 

Bia Analytical – QUBIS Innovation FundBia Analytical

Bia Analytical (“Bia”) is a leading UK food authentication testing laboratory, helping to counter food fraud. 

The company was founded by Prof. Chris Elliot OBE, a professor of Food Safety and founder of the Institute for Global Food Security at Queen’s University Belfast. Chris has coordinated major EU research projects and led the UK government’s independent review of food systems following the 2013 horsemeat scandal. 

Bia Analytical targets two types of food fraud: substitution (replacing a named ingredient with a similar product) and adulteration (adding unnecessary substances to reduce the quality and lower the cost). Food fraud has a significant impact on both consumers (allergens, pesticide, religious requirements) and manufacturers – costing the UK over £11 billion a year.

Bia currently offers three products: lab-based authenticity testing, bespoke models, and portable screening devices. Its technology uses spectroscopy (a technique to measure light absorption) to generate a ‘fingerprint’ which can then be compared to a model sample to determine authenticity. 

The company completed the NxNW ICURe programme in 2018 after securing Innovate UK grant funding. In 2020 it secured a further follow-on grant of £300,000 as part of a £570,000 seed funding round and opened for business in 2021.

Sonrai Analytics – QUBIS Innovation FundSonrai Analytics

With the development of precision instrumentation, companies are able to collect more data than ever before. However, as datasets grow in size, so does the demand on IT and analytical infrastructure. For example, medical studies routinely contain terabytes of molecular and imaging data which can take days to process. 

Sonrai Analytics (“Sonrai”) has created a data platform, inDRA, which provides companies with dedicated analytics without the high costs or need for technical expertise. 

The platform can clean, integrate, and convert data into an ‘analysis-ready’ format, allowing companies to focus on outcomes and results rather than processing. Furthermore, Sonrai has developed proprietary algorithms capable of making intelligent predictions to help firms direct their future studies.

The company spun out from QUB in 2018 and in 2020 received £700k in funding from QUBIS, Innovate UK, Techstart Ventures, and Invest NI. The same year, Sonrai partnered with Roche, the world’s largest biotech company, as part of the £7 million ACTIONED consortium, which aims to improve outcomes for early-stage cancer patients.

Previous exits and failures

This fund launched in 2021, so it is yet to have any exits or failures.

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, or even be prepared for all companies to fail.

Any exits are likely to take considerably longer than the three-year minimum holding period. 

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.

Investor charges
Full initial charge
Wealth Club initial saving
Net initial charge through Wealth Club
Annual management charge
Administration charge
Dealing charge
Performance fee 20%
Investee company charges
Initial charge 3%
Annual charge 2%
All fees and charges are stated exclusive of VAT, which may be applicable. 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

Timing of the offer 

The fund anticipates taking up to twelve months to fully deploy investor capital following the closing dates. However, it may take longer.

Our view

QUBIS is an established institution, with more than three decades of experience in commercialising technology and supporting early-stage companies. In this time, it has had several successes, including three IPOs and ranking as the top institution for entrepreneurial impact two years running – past performance is not a guide to the future. 

This reputation has helped QUBIS secure valuable industry connections, including becoming the lead partner for NxNW. This arrangement provides exclusive deal flow from universities across the UK and offers access to non-dilutive grant funding through Innovate UK. 

Furthermore, the fund’s connection to the ICURe programme should help facilitate its robust selection process, creating a high barrier to entry that is rare for an SEIS fund. 

In our view, while QUBIS is a new entrant to the SEIS market, its experience, strategy, and industry connections make this a compelling, if high-risk, SEIS offer for experienced investors. 

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
-
Funds raised / sought
£650,000 / £650,000
Minimum investment
-
Deadline
CLOSED
Last updated: 5 July 2021

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