the game changers€¦ · verizon go90, and sinclair broadcast group. as a result, whistle sports...

MAGAZINE FOR THE PROVEN VCTs SUMMER 2017

WHISTLE SPORTS PAGE 4

FIREFLY LEARNINGPAGE 5

SPC INTERNATIONALPAGE 6-7

VCTs

THE GAME CHANGERS THE PROVEN VCTS INVEST IN WHISTLE SPORTS

169280 ProVen VCT Newsletter.indd 1 31/05/2017 16:23

Welcome to the Summer issue ofProVen News

When making investments for the ProVen VCTs, Beringea is attracted to sectors undergoing dynamic change and companies that harness new and disruptive technologies to exploit market opportunities. So it is fitting that this issue should be headlined “The Game Changers”.

The cover refers to our recent investment in Whistle Sports, a digital sports entertainment company that delivers its video content across a huge range of media channels – allowing it to reach its youthful target audience of millennial sports fans. Further details can be found on page 4.

Firefly Learning – another new investment for the ProVen VCTs – could also be described as a ‘game changer’. The company, which provides online learning environments specifically for schools, is offering a new solution to some perennial problems: how to help teachers plan, set and review work for students as effectively as possible whilst also engaging parents. More details on page 5.

In many ways, making a judicious ‘follow-on’ investment, at the right time, into the appropriate portfolio company is just as important as identifying the initial investment opportunity. We have recently made a number of follow-on investments – some of which are featured on the opposite page.

This year’s Shareholder Event will be held at the Institute of Engineering and Technology (IET). Feedback from last year was excellent and I look forward to welcoming many of you in November. For those of you who are unable to attend we will be providing video coverage of the event on the shareholders’ area of www.provenvcts.co.uk. The shareholder area of the site hosts a range of useful information including share prices, administrative forms and information on the ProVen Rewards scheme.

Stuart Veale

Managing Partner

CONTENTS

Whistle Sports 4

Firefly Learning 5

SPC International 6-7

ProVen Legacy plc 6-7SHAREHOLDER EVENT WEDNESDAY 1ST NOVEMBER 2017 10.30AM-2.30PMThe Institute of Engineering and Technology, 2 Savoy Place, London, WC2R 0BL Presentations will include a keynote address, an update on the progress of the ProVen VCTs from Beringea and presentations from selected

portfolio companies. A light lunch will follow, offering a chance to meet

the VCT Directors, the Investment Management team and

representatives from portfolio companies. After

lunch there will be an optional VCT tax seminar.

www.provenvcts.co.uk/event

2 | PROVEN NEWS: MAGAZINE FOR THE PROVEN VCTs


PORTFOLIO NEWS

Leading app developers Poq are delighted that their client Missguided won the award for “Best App” at the Drapers Digital Festival Awards this May.

The Best App award is to celebrate an app that has helped retailers generate increased brand awareness and sales whilst also providing an outstanding customer experience.

POQ’S CLIENT AWARDED ‘BEST APP’

CHESS DYNAMICS INC OPEN FOR BUSINESSTHE LEAP 100

ProVen VCTs’ portfolio companies Firefly, My1stYears, Network Locum and Watchfinder have made it onto the Mischon de Reya Leap 100 for 2017.

The Leap 100 is an annual list identifying the most exciting, fast growth companies in the UK. The list is published in CityAM and it features companies that re-define their categories and aim higher than their competitors to find new, smarter ways to engage with their customers.

To strengthen its international presence, portfolio company Chess Dynamics has opened its first US Office - in Denver, Colorado.

Chess has appointed Liteye Systems Inc., as its North American Sales Partner. Graham Beall, CEO of Chess said: “Since appointing Liteye, we’ve been impressed by their commitment to customer satisfaction and technical excellence. This will allow us to address the growing demand we’re seeing for integrated sensor platform solutions within the naval, land, and security sectors.”

PROVEN NEWS: MAGAZINE FOR THE PROVEN VCTs | 3

PERFECT CHANNEL Enterprise auction platform First invested: June 2014 Follow-on investment: £600,000

Perfect Channel provides auction and trading platforms designed for companies operating marketplaces in commodities and financial assets. The additional investment will be used to support continued sales growth and product development over the coming year.

TV PLAYER Online TV service First invested: October 2014 Follow-on investment: £350,000

TVPlayer is a ‘freemium’ over-the-top TV service, offering over 75+ free-to-air and 25+ pay channels to over one million monthly users in the UK. In 2016 TVPlayer was spun-out of Simplestream (another ProVen investment). This additional investment will be used to support the company’s continued product development.

CONTACT ENGINE Customer communications First invested: September 2016 Follow-on investment: £250,000

Beringea has made a further investment of £250k in customer communications technologists Contact Engine. The additional funding will be used to support expansion into North and South America and mainland Europe, as well as to deliver further enhancements to its Artificial Intelligence and Machine Learning capabilities.

PORTFOLIO DEVELOPMENT Recently the ProVen VCTs made a number of further investments into portfolio companies to support growth and development.

POQ Leading app designer First invested: July 2016 Follow-on investment: £2million

Over 33% of online retail purchases are made via mobile. Poq harnesses the power of this channel by creating bespoke native apps for its impressive client list (which includes fashion retailers Missguided and House of Fraser). The follow-on funding will be used to support the company’s rapid growth and its international growth plans.


NEW INVESTMENTS

The ProVen VCTs have invested £3.7million in Whistle Sports as part of a larger funding round which comprises $27.5 million from a number of leading investors in sports broadcasting and digital media, including TEGNA Inc., NBC Sports Ventures, and Sky.

Since launching in 2014, Whistle Sports has grown its audience to more than 300 million subscribers, followers, and fans across all social media platforms – including an audience of more than 45 million in the UK alone. Whistle Sports curates and distributes highly engaging content across social, digital, over-the-top, and television platforms. The formula has brought the company rapid growth, winning more than 2.5 million new users every week. Content delivered by Whistle Sports receives nearly two billion views every month across all platforms.

The investment follows a year of momentum for Whistle Sports that saw the company secure a range of new content deals and accolades. As well as launching ‘Unseen Hours’, a behind-the-scenes look at the training regimes of up-and-coming professional basketball players, the company also benefited from key partnerships with the National Football League, Major League Baseball, NBC Sports, Sky Sports, Verizon go90, and Sinclair Broadcast Group. As a result, Whistle Sports was ranked as the most-followed sports media brand on social media by social media analysis firm Shareable.

The ProVen VCTs’ investment will support Whistle Sports as it aims to accelerate revenue growth while maintaining the rapid expansion of its user base.

John West, founder and CEO at Whistle Sports, said:

“2016 was a hugely successful year for us as we connected fans with the sports they love in new and exciting ways and helped athletes, teams, leagues, and brands develop deeper relationships with those fans. Backed by this new investment, we are excited about building on this success and continuing to grow in 2017 and beyond. In particular, we look forward to further developing our analytics practice to provide brands with the detailed insights they need to better understand and engage with millennial sports fans.”

Karen McCormick, Chief Investment Officer at Beringea, said:

“The way that sport is broadcast and consumed has changed significantly in recent years, becoming more brand-led and interactive. Meanwhile, the way in which consumers interact with their favourite brands continues to evolve, with social and video content increasingly important to building and sustaining relationships. Whistle Sports’ passionate and dynamic team operates at the intersection of these two trends, and we are excited to help them drive continued user engagement and revenue growth with this investment alongside some heavy hitters in sports and media.”

WHISTLE SPORTSThe ProVen VCTs have invested in Whistle Sports – a digital entertainment media company.



In January this year, the ProVen VCTs participated in a £4.5million ‘Series A’ funding round for Firefly Learning – believed to be the largest early stage fundraising in the UK EdTech sector.

The ProVen VCTs invested £1.4million, alongside other investors, into the educational technology company, which provides Learning Platform software to schools.

Firefly works by bringing teachers, students and parents together in a virtual space. It enables the teachers to set homework, track progress, share resources and engage parents in the child’s learning.

Founders Simon Hay and Joe Mathewson first came up with the idea when they were teenagers and students at St Paul’s School in West London.

“Joe and I were friends at school and we first started developing this idea for a business when we were 13 or 14 and staring at a pile of revision notes on a bedroom floor. We thought there has to be a better way to organise school work, which has hardly changed since Victorian times. We started experimenting with programming and built a new intranet for our school, so we could access homework and resources from our computers,” Simon Hay, co-founder, says. By the time the boys began their A levels, students and teachers had uploaded over 10,000 pages of content and teachers relied heavily on the intranet, created by the pupils, as a school resource.

Hay and Mathewson went on to University and subsequently both took jobs in the city but over the years they continued developing their plans for an education technology product and talking to schools, who showed increasing interest.

By 2010 it was clear that there was a viable business in their plans, so they gave up their City jobs, at the age of 24, to devote themselves full-time to building Firefly. St Paul’s School in West London, where they had met and originally came up with their idea, was their first customer.

Unlike many other online services used in the education sector, Firefly was built specifically for schools, rather than adapting a model designed for businesses or universities, and can integrate easily with the software they already use.

Firefly is now used by 480 schools in 32 countries, covering some 400,000 pupils – including Charterhouse and Sevenoaks School and an increasing number of state schools.

“There are three-quarters of a billion school age children around the world, but education is one of those industries that hasn’t really changed at all in the way that lessons are taught and homework is handed out. Teachers, parents and pupils are heavily reliant on pieces of paper and it can be hard for parents to monitor what a student is doing,” says Simon Hay.

The ProVen VCTs’ investment is being used to develop the Firefly product and expand the sales and marketing team. Firefly currently has 50 staff in offices in Hammersmith and in Sydney and the next stage of growth will see the number of employees double in size. Stuart Veale, Managing Partner at Beringea, commented: “We are delighted to be investing in Firefly. Simon, Joe, and the Firefly team have built an exceptionally strong product, as demonstrated by its high loyalty amongst teachers and schools. This investment will provide the company with the resources to continue its rapid growth and to enter its next phase of development. We look forward to working with the company to help it expand its presence in both the UK and elsewhere.”

Schools in the UK spend £900 million a year on education technology and are being encouraged to use it more widely to help improve their pupils’ performance. At the same time schools are under pressure to raise educational standards, while seeing budgets squeezed. Firefly represents excellent value for money with schools typically paying less (per student) than the cost of a homework diary.

FIREFLY LEARNING



PROVEN LEGACY PLC

Feedback from ProVen VCTs’ shareholders was a driving factor behind the creation of ProVen Legacy plc – a company designed to allow investors to mitigate Inheritance Tax.

Beringea acts as the Lending Adviser and Promoter to ProVen Legacy plc, which was launched in June 2016. We are now pleased to announce that ProVen Legacy plc has provided funding to two companies - Celoxica and Cogora.

The loans were made in March and April 2017 respectively and both Celoxica and Cogora are portfolio companies of Beringea’s ProVen VCTs.

Celoxica is a leading provider of trading solutions to the global financial services industry. Beringea has previously provided funding to Celoxica via Beringea Growth Finance.

Healthcare media and marketing firm Cogora is one of the ProVen VCTs’ long-term investments (previously known as Campden Media).

Mark Taylor, who heads up Beringea’s debt team, which acts as ProVen Legacy plc’s Lending Adviser said: “Having already established a global footprint in their respective fields, Cogora and Celoxica are the perfect businesses to receive the first funds via ProVen Legacy.


Mark Taylor, Partner and head of Beringea’s debt team

This February, Beringea sold the majority of the ProVen VCTs’ stake in long term investment SPC International to TVS Rico.

The ProVen VCTs’ initially invested in the global IT hardware support company in 2003, and have, through subsequent follow-on investments, provided SPC with just under £2.7million of funding during the life of the investment. This partial exit has generated a good return on the original investment and allows the ProVen VCTs to retain a 5% stake in the business.

SPC International specialises in the repair, refurbishment and remarketing of electronic and electro-mechanical equipment in the IT, banking and retail sectors. The company also provides EPOS, printing, barcoding and computer security software solutions through its reseller activities.

The company’s headquarters are in Uxbridge with a further five offices in Europe and the US and four repair centres in India.

SPC International provides spares and repairs, supporting maintenance companies and manufacturers around the world.

Stuart Veale, Managing Partner at Beringea LLP, said: “We’ve seen SPC International grow into an extremely successful business over the course of our 14-year relationship. It’s performed well for us as an investment over that time, and it’s exciting to see the company take the next step. TVS Rico is a great strategic fit for SPC International and we’re confident this move will help SPC maintain and build on its position as a well-respected global player in the supply chain industry. We’re looking forward to seeing how SPC International will continue to progress, and offering our continued support throughout this next chapter.”

INVESTMENT DISPOSAL

SPC INTERNATIONAL


We look forward to seeing them develop through this new and exciting phase, and to advising ProVen Legacy on further and more substantial loans as the Company becomes more established.”

The primary objectives of ProVen Legacy plc are to preserve investors’ (shareholders’) capital and enable them to mitigate Inheritance Tax. Its strategy is to make loans to a variety of small and medium sized UK private companies. The common feature of these loans will be that each loan will be backed by assets used in the business, or the business will have predictable revenue streams.

This strategy is designed with the intention of enabling shares in ProVen Legacy plc to meet the conditions for Business Property Relief, a tax relief provided by the UK Government as an incentive for investing in trading businesses. Investors can potentially benefit from up to 100% relief from Inheritance Tax on the value of the shares, subject to conditions.

For more information please speak to your financial adviser or visit www.provenlegacy.co.uk or call Beringea on 020 7845 7820.


A small selection of Cogora’s publications.


This newsletter has been approved by Beringea LLP (“Beringea”). The information and opinions contained herein were prepared by Beringea. The information herein is believed by Beringea to be reliable and has been obtained, where possible, from public sources believed to be reliable. However, Beringea makes no representation as to the accuracy or completeness of such information. Copyright© May 2017 Beringea LLP. Beringea LLP is authorised and regulated by the Financial Conduct Authority (FRN496358). Beringea LLP’s registered office is 39 Earlham Street, London, WC2H 9LT

For more information please call us on:020 7845 7820, or email [email protected] visit www.provenvcts.co.uk

Write to: ProVen News, 39 Earlham Street, London, WC2H 9LT

Beringea is an international venture and growth capital investment firmwith offices in London and Michigan (U.S.).

London Office39 Earlham Street LondonWC2H 9LTt:+44 (0) 20 7845 7820 e: [email protected]

Michigan Office32330 W.12 Mile Road Farmington Hills Michigan 48334t:+1 248 489 9000

Risk Warning – ProVen VCTsVenture capital trusts are not suitable for all investors. If you are in any doubt about the suitability of an investment in a VCT you should consult an authorised Independent Financial Adviser. The sale of VCT shares within 5 years will result in the loss of the initial tax relief, so an investment in a VCT should be considered a long-term investment. The value of shares in a VCT may fluctuate and you may not get back the amount you invested. There is no certainty as to the level of dividends. You may have difficulty selling your shares and any sale is likely to be at a discount to the net asset value. VCTs invest in a portfolio of small companies, which by their nature carry greater risk than larger, quoted companies. The dividends paid to shareholders may exceed the VCT’s net income from investment (after the cost of running the VCT) in which case the net asset value per share may fall. The continuing entitlement of shareholders to the VCT tax reliefs is dependent on the VCT maintaining its status as a VCT.

Risk Warning – ProVen Legacy plcAn investment in ProVen Legacy plc should be based on all the information in the Offer Document, particularly the Risk Factors section. The Offer Document is available from Beringea or your IFA. It is also available to download from the ProVen Legacy plc website www.provenlegacy.co.uk.

An investment in ProVen Legacy plc (the “Company”) involves risk and will not be suitable for all investors. If you are in any doubt about the suitability of an investment in the Company you should consult an authorised financial advisor. The Company is a new business and is therefore subject to all the risks and uncertainties associated with a new business. The value of shares in the Company may fluctuate and investors may not get back the full amount they invest and in certain circumstances may lose the whole of their investment. The target minimum return is a target and there is no guarantee that this will be achieved. The shares in the Company are unquoted and it may be difficult for investors (and their heirs) to sell their shares. Shareholders may request the Company to redeem their shares but there is no guarantee that such redemption requests will be accepted. Consequently the Company will not guarantee that investors (or their heirs) will be able to redeem all or any part of their shareholding. While it is the intention that the Company will operate so as to offer shareholders relief from Inheritance Tax, there is no guarantee that such relief will be available. Tax legislation may change, possibly with retrospective effect, and such change may have a material adverse effect on the tax treatment of an investment in the Company.


the game changers€¦ · verizon go90, and sinclair broadcast group. as a result, whistle sports...

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