A recent report found that “Across the UK, 2021 saw record levels of equity investment, in terms of both the volume and value of deals completed” (https://www.beauhurst.com/research/high-growth-london/).
I’ve taken a look at four seed stage companies that were successful in raising more than a million pounds within one year of being founded, to get a glimpse of what might be on the horizon in terms of UK innovations. In all cases the companies stated that the purpose of the investment included research and development activities.
Metaphysic is an interesting London based example, founded in May 2021 and receiving equity investment of £7.5M in January 2022. The company says that: “Metaphysic builds software to help creators make incredible content with the help of artificial intelligence”. Its mission is to “expand the frontiers of human expression through the ethical application of AI and build a future where everyone can create deeply relevant and delightful content for the communities they care about”. https://metaphysic.ai/introducing-metaphysic/.
While Metaphysic is a UK startup, all the shares are owned by Metaphysic Inc. a California (US) based company that was founded in 2000. You can draw your own conclusions on why Metaphysic Inc. might want to found a UK start-up to undertake Research and Development.
Abatable, which is the trading name of Zero Imprint Limited, is also London based. It is targeting the need for companies to achieve net zero goals for carbon. It was founded in April 2021 and in November 2021 announced a successful raise of £2.24M in equity funding from a mix of investors. It was part of the https://www.ycombinator.com which has a model for funding early stage startups.
Abatable says on its website that it is helping you “achieve your net zero goals with a diversified portfolio of pre-vetted carbon offsets”. It does this by developing “a rigorous framework to evaluate carbon projects and the quality of the project developers…” (https://www.abatable.com/).
Wobble Genomics provides an example of a cutting edge company that has been spun out of academia at the University of Edinburgh and is based in Edinburgh. It says it “specialises in maximizing RNA and DNA sequencing efficiency for the discovery and detection of nucleic acid biomarkers” https://www.wobblegenomics.com. It was founded in April 2021 and secured equity funding of £2.15M in July 2021.
It also received grant funding of £297K in August 2021 as a lead participant in an Innovate UK funded project – project abstract: “Imagine what we could do if we could find every gene. We could breed crops resistant to disease, develop better treatments for cancer, or diagnose illnesses before they become untreatable. Wobble Genomics is working to make this a reality. Genes are the basis of all life…”
Fintech Farm is another London based example, founded in March 2021 and announcing a successful equity raise of £5.4M in January 2022. The purpose of the investment is: “Research & Development, to launch neobanks in eight countries over the next two years”. The company looks to be purely focused on creating successful neo-banks to streamline mobile and online banking services (banking using apps, software and other technology) – in emerging markets.
Acknowledgement: data has been drawn from Beauhurst database (https://www.beauhurst.com/) and the individual company websites.
UK companies undertaking research and development can also benefit from UK Government R&D Tax Credit and Tax Relief incentives – contact us for more info.
Author: Linda Eziquiel
Regional Director, RandDTax