Symvan Technology SEIS Fund 3

The Symvan Technology SEIS Fund 3 offers investors exposure to early-stage technology businesses which are potentially disruptive in their sector and have high-growth potential.  It has a particular focus on digital technology and application software, often with a business-to-business (B2B) focus.

Highlights

  • Target return of 2.85x (not guaranteed)
  • Strong emphasis on competent management teams
  • Investors should hold a portfolio of around six companies
  • Collaborative approach with technology incubators, including Microsoft
  • Minimum investment £10,000

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.

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The manager

Symvan takes its name from the Greek word for “event”. Symvan Capital was founded in 2013 and launched its first SEIS fund shortly after.  This is the third SEIS managed by Symvan, alongside its EIS fund.  

CEO and co-founder Kealan Doyle has worked with venture capital firms for over 15 years as a corporate finance advisor and fund manager. He worked at HSBC, Deutsche Bank, Merrill Lynch and UBS.

Investment Manager and co-founder Nicholas Nicolaides previously worked at Lehman Brothers and BNP Paribas. His focus at Lehman Brothers was on European Telecom and Media. Whilst at BNP Paribas he worked with the Equity Capital Markets and TMT Corporate Finance teams. 

Rob Bird is adviser to the fund. He is an expert in AI and big data. Since 2014, Rob has led the Centre of Excellence in Machine Learning and Big Data product architecture at Akamai Technologies, Inc. In 2006, Rob founded Red Lambda, Inc., a Florida machine learning-based network security company. 

Watch a video interview with Kealan Doyle, CEO of Symvan Capital:


Recorded 16 October 2018

The offer

 The SEIS fund’s investment focus is on four subsectors of digital technology:

  • Artificial Intelligence and Machine Learning;
  • Internet of Things;
  • Data driven technologies involving big data analytics, cyber security, blockchain, etc.; and
  • Immersive technologies such as Augmented Reality (AR) and Virtual Reality (VR).

Symvan often invests alongside technology incubators or accelerators.  These help to create and grow young businesses by giving support, financial and technical services. Companies within an incubator can benefit from shared facilities and workspace, as well as support through networking and potentially providing commercialisation opportunities. Moreover, accelerators may provide a natural exit route although this is not guaranteed.

The Symvan Capital team believe the competency of a management team is one of the most critical factors in determining whether a business achieves early success or failure.

Performance

The chart below shows the net return of investing £100 in the Symvan SEIS funds in the tax year indicated. For example, £100 invested in 2015/16 would have returned £178 based on Symvan's own valuation: note past performance is not a guide to the future and these kind of investments can be illiquid and hard to sell and value. 

Annual performance 

The table below shows the annual value of £100 invested for each fund to December each year.

Subscription date Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018
2014/15 (Apr 14) 100 100 100 105 103
2015/16 (Apr 15) n/a 100 100 167 178
2016/17 (Apr 16) n/a n/a 100 127 60*
2017/18 (Apr 17) n/a n/a n/a 100 99
2018/19 (Apr 18) n/a n/a n/a n/a 100
Source: Symvan Capital, as at 31 December 2018. Assumes £100 subscription made at the beginning of each tax year (April) and deployed pro-rata across all investments made by the fund in that 12 month period. Please note these are unquoted companies and the value is based on Symvan Capital’s own valuation with reference to International Private Equity and Venture Capital Valuation (IPEV) guidelines. Figures are net of fees and do not include tax relief. Remember, these investments are illiquid and can be difficult to sell or realise any value at all. Past performance is not a guide to the future. * Includes Debt financing of £8 million to one company, which affects the overall NAV.

Examples of previous investments

Note these are previous investee companies made by Symvan’s EIS and SEIS funds: new investors will be exposed to different companies.

Symvan Capital CognisessCognisess

Cognisess is a predictive people analytics company headquartered in Bath. The Cognisess SaaS platform uses cognitive neuroscience, predictive analytics and machine learning to help solve recruitment challenges and to better select, recruit and manage talent. Cognisess thus aims to removes the bias and subjectivity around hiring, annual appraisals and organisational design. It helps companies understand the current and future value of their most important and expensive asset: people.

Cognisess came to Symvan through the first cohort from the Microsoft Ventures Accelerator Programme in London. By this stage, the company had developed the product and had taken on its first pilot clients.

Symvan was attracted to the business by the management, the existing client base (they already counted Ford and PayPal as customers), clear ownership of the intellectual property and the scalability of the Cognisess offer.

Since the initial investment in 2015, several new clients have been acquired: Intercontinental Hotel Group, Volkswagen UK and Uber in Australia.

In April 2017, Cognisess was the only UK company selected as one of only 15 startups globally (out of 500 graduates of Microsoft Accelerator) to attend the Microsoft Global Startup Roadshow at Microsoft’s headquarters in Seattle, and met with Microsoft’s CEO and other executives, mentors and venture capital investors.

Cognisess was originally seed funded by Symvan in an earlier SEIS fund and follow-on funding was provided by Symvan’s EIS fund in 2016.

Auris Tech

Auris Tech uses proprietary interactive automatic speech recognition (“ASR”) software to encourage and teach children to read English via “Listening Books”. It was set up in collaboration with the University of Edinburgh.

Auris aims to be the premier software system for ASR books targeting children aged 4 to 9 years, initially in the UK, and then expanding geographically to other countries.

The Listening Bookstore (which is Fonetti branded) app is now live in the UK Apple App Store with an initial offering of e-published children’s titles including the Oxford Reading Tree (used in 80% of UK primary schools) provided via an agreement with Oxford University Press.

The Company is in discussions with a number of other publishers, including advanced talks with a major publisher that has never digitised its catalogue to date.

The Company has received the support of Clare Balding, the presenter and celebrity children’s author. Ms Balding is an official ambassador for the company. The company is also supported by Lewis Bronze, MBE, the founder of Espresso Education (acquired in 2013 by Discovery). Mr Bronze was also editor of Blue Peter for many years and a producer of Newsround.

In April 2015 the company received investment from the Symvan Technology SEIS 2 Fund, and in April 2018 the Symvan Technology EIS fund provided follow-on funding.

WonderLuk

As is to be expected, not all investments work out. One example of a failure is WonderLuk, one of the early SEIS investments, from 2014.

WonderLuk sold 3D-printed jewellery (bracelets, rings, necklaces etc) designed by architects, product and jewellery designers from around the world. Durable high tech nylon pieces were digitally created and the sterling silver elements were crafted by lost wax casting from the 3D-printed shape.

WonderLuk opened the first pop-up store for 3D-printed jewellery in Europe and in 2015 the firm collaborated with Topshop to open a 3D-printed accessories pop-up store in the Topshop Oxford Circus branch.

However, WonderLuk was not able to scale. In 2017, the business was liquidated and a small amount was returned to SEIS shareholders.

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.

Diversification is limited, and this is a concentrated portfolio.

Please note, Symvan Capital expect SEIS deployment to take 12-18 months, as such there is no guarantee that carry-back will be available for new subscriptions. 

Fees and charges

A summary of the fees and charges is shown below. Please see the provider's documents for more details.

Initial charge paid by investor up to 0%
Initial charge paid by investee company Up to 10%
Annual charge paid by investee company £3,000
Performance fee 20%

More detail on the charges

Our view

This is a high risk, high reward SEIS fund in an exciting sector. The team are experienced. The first few exits are now starting to emerge: note past performance is not a guide to the future. The charges are high but not out of place for SEIS investments.  

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
2.85x
Funds raised / sought
£800,000 / £1.5 million
Minimum investment
£10,000
Deadline
Discretionary
Last updated: 8 March 2019

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