Oxford Investment Opportunity Network secures access to £50 million co-investment fund
Oxford Investment Opportunity Network (OION), Europe’s leading technology business angel network, has welcomed the Government’s announcement of the Regional Growth Fund which looks likely to provide £50 million for the development of a national fund to invest in high growth start-ups alongside business angels.
Established as one of the first business angel networks in 1994, OION is one of the few private sector angel networks in the UK. From its headquarters in Oxford, the Network assists innovative companies from across the UK to secure crucial business development funding from £200,000 to £2 million.
The OION Network was one of five partners in the successful bid submitted by Capital for Enterprise Ltd (CfEL) for a £50 million co-investment fund, one of only two national bids to secure funding from the £450 million Regional Growth Fund. The other successful bid came from Community Development Finance Association. Together, it is estimated that they will create 35 direct jobs and 44,587 indirect jobs, the highest indirect jobs figure amongst all the successful bids.
Like the other awards, a period of due diligence will follow before the funding can be allocated. The partners in the CfEL consortium expect to then set up a co-investment fund that will provide capital alongside investment from business angels and syndicates to invest in high growth companies.
Ken Cooper, managing director of equity investments at Capital for Enterprise, said: “We are delighted that the consortium’s bid has been successful. It is an indication of the importance placed on business angels as a source of entrepreneurial capital and we are looking forward to working closely with the consortium partners to establish the fund.”
Don McLaverty, director of OION Ltd, said: “This news rounds off a highly successful year for the OION Network. The small but crucial investment that angels provide, coupled with their valuable management experience, can make the difference between the success or failure of early stage firms that are the key drivers of our economic growth. We look forward to working with our partners to facilitate more deals over the coming year and ensure that the co-investment fund is an outstanding success.”
The OION Network has recently announced its annual results showing that it has maintained its track record of deals despite the economic downturn. 17 new deals were completed in the year to 31 March 2011, raising just over £2 million of direct investment from angel members of the three networks run through OION Ltd and enabling investee companies to leverage an additional £6.6 million from other sources. In the past three years, OION has helped over 40 companies raise more than £27 million.
Companies that have secured crucial funding through the OION Network include:
Microvisk Technologies, the developer of a handheld system to monitor the blood clotting status of patients taking the drug Warfarin. Microvisk has developed the world’s first medical diagnostic strip based on a Micro-Electro-Mechanical System, the same technology as is used in the iPhone and car engines. Their ‘SmartStrip®’ uses sensors to work out the clotting speed of blood from a finger prick sample with the results displayed on a handheld reader. The company is preparing to launch its SmartStrip® product onto the UK market this autumn with product launches in Germany and the US scheduled for next year.
Bladon Jets is developing micro gas turbine engines for cars and power generation. The company is working with Jaguar Land Rover on the development of a micro gas turbine engine to operate in a plug-in hybrid car. A Jaguar C-X75 super car incorporating two Bladon Jets micro gas turbines was unveiled to industry acclaim at the last Paris Motor Show and proved to be a star attraction at the Los Angeles Motor Show. Bladon Jets used the investment provided through OION as match funding against a UK Technology Strategy Board funding award for developing low carbon vehicle technology.
OrganOx, an Oxford University spin-out company, is developing a device for sustaining organs outside the body that will be used to prolong the preservation of livers before transplantation. There are over 30,000 patients on the liver transplant waiting list in Europe and the US with only 12,000 transplants each year. Around 20 per cent of patients die whilst awaiting transplantation and many donated livers have to be discarded annually as they are damaged by oxygen deprivation. The OrganOx technology will allow livers to be preserved for up to 24 hours, increasing the number of livers available for transplants.
OION is one of three investment networks managed by Oxford Innovation, a leading operator of coaching programmes and business and innovation centres for start-up and growing companies.
The BIS release announcing the Regional Growth Fund is available at: http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=419127&NewsAreaID=2
About Oxford Investment Opportunity Network (OION)
Oxford Investment Opportunity Network (OION) is Europe’s most successful technology business angel network that links investors with entrepreneurs seeking business development funds up to £2 million. OION holds monthly meetings where selected companies pitch their proposals to OION’s members, which include over 150 active business angels, VCTs and fund representatives.
OION has two successful sister networks. Thames Valley Investment Network links investors in the Reading and Thames Valley area with companies in the general technology, media and green tech sectors seeking funding from £150,000 to £750,000. Oxford Early Investments helps very early stage companies raise funding from £25,000 to £150,000.
OION is managed by Oxford Innovation, a leading operator of coaching programmes and innovation centres for start-up and growing companies. The Network is sponsored by Laytons, the Harwell Campus Programme, Marks and Clerk and MEPC Milton Park. For more information: www.oion.co.uk
About Capital for Enterprise Ltd (CfEL)
CfEL will provide the fund administration for the planned co-investment fund.
CfEL is a limited company governed by an independent board with the Secretary of State for Business as its shareholder. CfEL has been established to be the government’s principal source of knowledge, expertise and information on the design, implementation and management of finance measures to support SMEs.
CfEL is the largest single investor in UK early-stage venture capital and manages investments of more than £550m in around 40 venture funds.
For more information: www.capitalforenterprise.gov.uk
About the Co-investment Fund
The project will establish a business angel co-investment fund which will sit alongside partner business angel networks and syndicates and participate in investments on the same terms as other members. This is similar to the way that the Scottish Co-Investment Fund operates and builds on the experience of that fund, the Department for Business’ Early Growth Funds and a private sector scheme in Oxford that was backed by the Bank of Scotland.
The bid for the co-investment fund was put forward by a group of syndicates who are active in the early stage investment arena. They, and any other syndicate which proposes a deal to the co-investment fund, will have to source at least a matching amount of private sector funding.
The organisations participating in the co-investment fund alongside Capital for Enterprise are:
• Braveheart Investment Group plc
• Hotspur Capital Partners Ltd
• Octopus Investments Ltd
• Oxfordshire Investment Opportunity Network Ltd
• Venrex Investment Management LLP
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