Newsletter
November 2024
The latest Northern VCTs' Newsletter: Explore our portfolio performance, new investments including exclusive interviews with portfolio CEOs sharing market insights and growth strategies. Stay informed on shareholder updates and key developments.
Dear InvestorSince I last wrote, the portfolio has demonstrated continued resilience and growth, despite the challenging macroeconomic environment. As highlighted by our guest speaker at our recent Northern VCT Shareholder Seminar, Simon French Chief Economist at Panmure Liberum, whilst there are near-term challenges, we are seeing encouraging signs with UK economic growth on an upward curve, lower inflation and falling interest rates set to increase disposable incomes. We believe this will continue to create the opportunity to invest in fast growing successful UK companies.Our investment strategy continues to focus on building a diversified portfolio across different sectors and development stages. The portfolio now comprises 64 venture capital holdings, with a particular focus on Software, Healthtech, and Consumer facing businesses. We believe that this diversification for the Northern VCTs' will help ensure our performance is not overly reliant on any single investment or sector.
The underlying strength of our portfolio is evidenced by the impressive growth rates across our companies, with the majority achieving compound average revenue growth rates of over 20% in the last two years and a number growing in excess of 50%. Our top five investments, including Currentbody.com, Pimberly and Tutorful, continue to perform well and represent 13.3% of our net assets.
Looking ahead, I am pleased to announce that we will be launching a new fundraise of £36 million in January 2025, with shares to be allotted between 01 and 04 April 2025. We are grateful to the continued support of our shareholders and can confirm there will continue to be a 0.5% reduction in the applicable offer costs for existing shareholders.
We remain cautiously optimistic about the opportunities ahead for both our portfolio and new investment opportunities. Our focus remains on supporting ambitious management teams and driving value across the portfolio.
Very best wishes
Peter Dines
MD, Mercia Ventures
We are cautiously optimistic about the opportunities ahead."
Over the last year, the Northern VCTs have maintained their commitment to nurturing innovation by supporting a range of promising companies. These investments have supplied essential capital to ambitious businesses, facilitating their growth and development. Highlighted are some case studies that exemplify our investment approach and its impact on these ventures.
Tozaro, based in Bedford, is at the forefront of enhancing cell and gene therapy development through its innovative non-biological affinity reagents. With a successful £7.0 million Series A financing round led by Mercia Ventures, Tozaro is setting a new industry standard. The funding will advance its revolutionary molecular imprinted polymer technology, which offers a sustainable alternative to traditional antibodies in diagnostic and therapeutic applications.
Tozaro's synthetic reagents are pivotal in streamlining viral vector characterisation, purification and ensuring safety and quality control by efficiently detecting and removing impurities. Addressing the critical challenges in viral vector production, Tozaro's technology represents a significant leap beyond current biological reagent limitations, offering a scalable, high-performance and economical solution for the cell and gene therapy sector.
Find out more
Heidi – a fast-growing online tour operator revolutionising ski holidays – secured £5.6m from the Northern VCTs alongside Active Partners and private investors.
The company's technology allows customers complete flexibility to build bespoke packages from over 6,000 accommodation options across 400 resorts. Its platform enables flexible departure dates, variable stay lengths and filtering by features such as snow conditions and slope proximity, along with coordinated group bookings from different departure points.
The funding will enable the Bristol-based company to enhance its platform and create over 20 new jobs in the coming year. With revenue quadrupling from £8.8m in 2022 to £37m in 2024, Heidi has rapidly become the UK's third-largest ski holiday operator, carrying over 34,000 passengers in the most recent season.
Wobble Genomics, has unveiled breakthrough technology for early breast cancer detection, securing significant investment to advance its RNA sequencing platform. The company's innovative approach could transform how cancer is detected and monitored.
Their proprietary technology allows for the identification, extraction and sequencing of RNA with unprecedented accuracy. This breakthrough has particular significance in breast cancer detection, where early diagnosis is crucial for patient outcomes.
Supported by the Northern VCTs, the company has raised £8.5 million to commercialise its technology, which uncovers previously invisible 'full length' RNA, critical for applications ranging from drug development to agriculture. Traditional RNA sequencing has been limited by short-read techniques that miss crucial information.
We believe our solution could accelerate a new wave of biotechnology innovations."
Scalpel AI is transforming surgical logistics with its innovative AI-powered platform that provides real-time tracking and management of surgical instruments. The company secured a £3.8 million investment led by Mercia Ventures.
Scalpel's ground-breaking technology automatically identifies and classifies surgical inventory without the need for physical tags or labels, addressing a critical challenge in healthcare logistics. The system can identify thousands of individual surgical instruments with over 99% accuracy, dramatically reducing the time spent on manual counting and tracking.
The platform is already being piloted in several major hospitals, where it has demonstrated significant improvements in operational efficiency, patient safety, and cost reduction. The investment will support Scalpel's expansion into new hospitals and the development of additional features to enhance surgical planning and workflow optimisation.
Semble's focus on connecting providers and enhancing patient care aligns perfectly with our commitment to backing technologies that drive meaningful change."
Semble has secured £15 million in Series B funding led by Mercia Ventures to advance its mission of creating a more connected healthcare system. The company's practice management software is revolutionising how healthcare providers manage their practices and interact with patients.
The platform offers a comprehensive suite of tools for appointment scheduling, patient communications, billing and clinical notes management. What sets Semble apart is its focus on creating an integrated ecosystem that connects different healthcare providers, enabling better coordination of patient care.
With over 8,000 practitioners already using the platform, Semble has demonstrated strong market traction. The investment will accelerate product development and support expansion into new healthcare segments.
CEO & Co-founder, Semble
CultureAI has secured £8 million led by Mercia Ventures to advance its innovative approach to managing human cyber risk. The company's platform combines behavioural science with machine learning to help organisations better understand and mitigate cyber security risks.
Unlike traditional security awareness training, CultureAI's platform continuously monitors and analyses employee behaviour to identify potential security risks and deliver targeted interventions. This proactive approach has proven highly effective in reducing security incidents.
The investment will support product development and international expansion, as the company responds to growing demand for more sophisticated cyber security solutions.
Promethean Particles, a climate tech innovator, has raised £8 million, led by Mercia Ventures, to scale up its manufacturing of advanced materials for carbon capture. The company has developed a unique continuous flow process for producing metal-organic frameworks (MOFs) and nanoparticles at industrial scale.
The investment will support the expansion of their production facilities and accelerate commercialisation of their carbon capture solutions.
Their technology enables the cost-effective production of materials crucial for carbon capture applications, addressing a key challenge in the fight against climate change. The company's MOFs can capture CO2 more efficiently than traditional materials, with applications across various industries.
Here are details of the Northern VCTs’ investment activity since 30 September 2023.
Investment (£'m)
Wobble Genomics - Transforming RNA sequencing and biomarker detection
3.0
Tozaro - Development of molecular imprinted polymers as alternative to antibodies
3.2
Promenthean Particles - Global supplier of cost-effective, industrial-scale nanoparticles and MOFs for CO2 capture
4.0
Warwick Acoustics - Development of flat and flexible electrostatic speakers
Scalpel - AI platform improving surgical efficiency through automatic identification of surgical inventory
3.1
Heidi - Booking platform to for flexible mountain breaks
4.3
iOpt - provider of synthetic DNA
Culture AI - Cyber security - employee training and monitoring platform
4.1
Semble - Practice management software for healthcare clinicians/clinics
6.1
Since 31 March 2024
The Northern VCTs continue to build a diversified portfolio of high-growth early-stage companies, focusing on businesses that demonstrate strong potential for value creation through innovation and market expansion.
Total venture capital holdings.
Gentronix: 4.5x return
Pure Pet Food: 3.6x return (partial realisation)
Climbing Hangar: 0.7x return
Nutshell: 0.0x
Seven new to Mercia Ventures.
Your opinions matter and in order for us to continuously improve our service to you, we would really like to hear what you think.
Please would you take a few minutes to complete our survey - and of course if you would like to share more by way of feedback outside of this questionnaire, we are always happy to hear from you - vctsshareholderenquiries@mercia.co.uk
In today's rapidly evolving investment landscape, diversification across sectors is critical to mitigating risks and capitalising on emerging opportunities for long-term growth."
The Northern VCT's portfolio showcases diversification across key sectors. This balanced approach aims to capture opportunities across multiple growing industries.
We are pleased to announce our intention to launch a £36 million fundraise in January 2025.
Shares will be allotted between 01 to 04 April 2025
There will be a 0.5% reduction in the applicable offer costs for existing shareholders.
More details will be shared in due course. Please see Mercia's website for further information.
Get in touch
This newsletter was brought to you by Mercia Fund Management Ltd who manages the Northern VCTs. Mercia Fund Management is part of Mercia Asset Management PLC.
vctshareholderenquiries@mercia.co.uk
www.mercia.co.uk/vct
Your capital is at risk. Investing in early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution. Please read the full risk warnings in the Fund documentation before applying. Past performance is not a reliable indicator of future performance. You should not rely on any past performance as a guarantee of future investment performance. Mercia is not able to offer financial advice and this email should not be construed as advice. Before applying, we always recommend seeking advice from an independent financial adviser. Tax relief depends on an individual’s circumstances and may change in the future. In addition, the availability of tax relief depends on the company invested in maintaining its qualifying status.Although we provide these links for your convenience, we have no control over these external websites and they are solely responsible for their own content and information presented. Therefore, Mercia cannot be held liable or responsible for any content presented on these external websites and for any damages resulting from them. You can also view our full privacy policy here. Mercia Ventures is a trading name of investment funds managed by Mercia Fund Management Limited, a subsidiary of Mercia Asset Management PLC. Mercia Fund Management is the manager of the Northern VCTs and is authorised and regulated by the Financial Conduct Authority (FRN: 524856).
