REG - Sure Ventures PLC - Investment in Sure Valley UK Software Tech Fund

Sure VenturesAnnouncement

02/03/2022 07:00

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RNS Number : 3470D  Sure Ventures PLC  02 March 2022

Sure Ventures plc ('Sure Ventures' or 'the Company')

 

Investment in Sure Valley Ventures UK Software Technology Fund

Alongside the British Business Bank

 

Sure Ventures plc, a London listed venture capital fund which invests in early
stage software companies in the rapidly growing technology areas of Augmented
Reality ('AR'), Virtual Reality ('VR'),  Internet of Things ('IoT') and
Artificial Intelligence (AI), is pleased to announce that it has agreed to
invest, alongside the British Business Bank ("BBB"), in a new venture capital
fund, the Sure Valley Ventures UK Software Technology Fund (the "New SVV
Fund").

 

Highlights

 

·    The principal investor in the New SVV Fund is the British Business
Bank, an investment arm of the UK Government.  The first close of this fund
will amount to £85 million, with the BBB investing up to £50 million and
other investors ("Private Investors"), including Sure Ventures PLC, investing
up to £35 million over the 10-year life of the fund.

 

·    The New SVV Fund will invest in a range of private UK software
companies with a focus on companies in the Immersive Technology and Metaverse
sectors, including Augmented and Virtual Reality, Artificial Intelligence, the
Internet of Things and Security.

 

·    Sure Ventures PLC, will initially be investing circa £90,000, in the
New SVV Fund on first close in order to fund the New SVV Fund's first
investment which has already been identified.   It expects to invest up to
£5 million in total over the life of the New SVV Fund which would equate to a
circa 5.9% interest.

 

·    The New SVV Fund will be managed by the same Sure Valley Ventures
fund ("SVV") team which, to date, has been highly successful in achieving a
number of cash realisations from, and upward revaluations of, companies in the
SVV portfolio.

 

·    The profit share arrangements within the New SVV Fund are designed to
encourage the involvement of Private Investors alongside the BBB, meaning that
Sure Ventures PLC and the other Private Investors would expect to receive a
significantly enhanced profit share of the total return generated by the fund
compared to industry standard.

 

·    This investment will enable Sure Ventures PLC shareholders to gain
exposure to exciting, fast growing venture capital investments through a
listed company structure with the expectation of an enhanced return which
would otherwise be difficult for such investors to achieve.

 

·    The Company has several sources available to fund this investment
over the coming years. These would include a combination of potential
realisations from SVV Fund 1, an Equity Subscription Agreement and Loan
Agreement, funds from future subscriptions and receipts generated from any
sales of listed investments.

 

 

Comment from Gareth Burchell

 

"Given the market conditions, raising £35m privately and attracting
investment from an organisation such as the British Business Bank is testament
to the success and talent of the Sure Valley Ventures team.

 

The Board recognise this is a very attractive investment opportunity for
shareholders in Sure Ventures given that the New SVV Fund is a larger size
than SVV Fund 1 which will allow for a more diverse investment portfolio and
the structure of the new fund provides for enhanced returns to investors, when
compared to the more traditional structure of SVV Fund 1. The existing team
from SVV will continue to manage the new fund having demonstrated a proven
track record from the returns to date achieved from managing SVV Fund 1.

 

Fund 2 has been created as part of the BBB's Enterprise Capital Funds
programme that only accepts a very limited number of fund managers on to the
programme, so this is a clear validation of the quality of the investment team
at SVV"

 

 

The British Business Bank (BBB) and Enterprise Capital Funds

The BBB is the largest domestic backer of venture capital funds in the UK.
Established in 2006, the Enterprise Capital Funds ("ECF") programme helps
those looking to operate in the UK market to raise venture capital funds
specifically targeting early-stage small businesses believed to have long-term
growth potential.

The ECF programme combines private and public money to make equity investments
into high growth businesses. The aim is to increase the supply of equity to UK
growth companies and to lower the barriers to entry for fund managers looking
to operate in the venture capital market.  The BBB's ECF programme only
accepts a very limited number of fund managers on to its programme i.e. some
24 fund management groups over the last 16 years since the programme started
in 2006.

The BBB specifically invests alongside venture capital funds on terms which
improve the outcome for the co-investors. The reason for this clear advantage
is simply to encourage venture capital funds to operate in a part of the
market where smaller businesses may not be able to access the growth capital
they need.

Other well-known fund managers that have been involved with the BBB ECF
programme include Dawn Capital, Notion Capital, Amadeus Capital Partners, IQ
Capital, and Episode 1.

 

 

Details of the New SVV Fund

The New SVV Fund is expected to complete its first close with total investment
commitments of £85 million, of which £50 million will be invested by the BBB
with the balance of £35 million coming from Private Investors, including
financial institutions and family offices. The total investment may, however,
increase to £95 million, with the Private Investors investing up to £45
million. Sure Ventures PLC's investment allocation of £5 million will,
however, not be required to increase in these circumstances.

Sure Ventures PLC's investment commitment over the life of the New SVV Fund
will be drawn down in tranches as and when funds are required for investment
over the 10 year life of the fund. However, as is similar to the existing SVV
fund, any realisations of its investments will be distributed to investors at
the time of realisation (as is common with funds of this nature) therefore the
return on this investment is expected to be received throughout the life of
the fund.

The New SVV Fund will invest in a range of private UK software companies with
a focus on companies in the Immersive Technology and Metaverse sectors,
including Augmented and Virtual Reality, Artificial Intelligence, the Internet
of Things and Security and is aligned with Sure Ventures PLC's investment
strategy.

The Sure Valley Ventures UK Software Technology Fund has been created under
the partnership, Sure Valley Ventures Enterprise Capital LP ("Partnership").
The Partnership has been constituted under an agreement between Sure Valley
General Partner Limited ("GP") and Sure Valley Ventures Founder LLP
("FP") to carry on the business of an investor and, in particular, of identifying, negotiating, making,
monitoring and realising investments and to carry out all functions and acts in connection therewith.

Shard Capital AIFM LLP has been selected by the GP to act as the Alternative
Investment Fund Manager (AIFM) of the Partnership and has been appointed by
the Partnership to (i) admit Investors to the Partnership and thereafter to
operate the Partnership and manage its investments, and (ii) act as
Alternative Investment Fund Manager (as defined in the AIFMD) to the
Partnership.

The role of Sure Valley Ventures Limited shall include sourcing investors and
deal flow for the Partnership, advising the Manager on making investments, and
arranging deals in investments for the Partnership. If Sure Valley Ventures
Limited or another Associate of the General Partner becomes an Authorised
Person permitted under FSMA to act as Manager of the Partnership, it is
intended that Sure Valley Ventures Limited or its Associate (as applicable)
shall be appointed as AIFM of the Partnership.

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

Enquiries:

Sure Ventures PLC

Gareth Burchell

Director

0207 186 9951

Corporate Broker

Damon heath

Shard Capital

0207 186 9952

 

 

 

 

 

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