Northern Tech
Investment
Q1 2017

March 2017
41
£165.7m
32
Growth
Total value
Completed
investments
of growth
acquisitions
investments

Q1 2017 investment demonstrated a growing confidence in Northern tech businesses from both local, national
and international investor groups. With more than £165m invested, Q1 was among the Northern tech sector’s
most successful single quarters in recent years. The most notable investment was the £83m raised by Atom Bank.
Based in Durham, Atom is the UK's first mobile only bank. It is leading the way in disrupting a sector long
dominated by large, well established players who’s size and traditional structures can sometimes make it difficult
to keep pace with technological change. Beyond Atom Bank’s fundraising, the remaining £83m invested in
Northern tech businesses is more than the last two quarters of 2016 combined. M&A activity in Q1 2017 was also
markedly higher, with 32 transactions, more than double both Q3 and Q4 2016.
At the close of March, Tech North debuted the Northern Tech 100, a ranked list of the fastest growing tech
companies in the region. At the top of the list is Wakefield based The Car Buying Group, a non-traditional service
utilising technology to make its mark in the second hand car marketplace; they grew at a rapid rate of 191% over
the past year, emphasising the impact e-commerce is having on traditional retail. Some of the businesses in this
Q1 Investment and M&A newsletter also featured in the ranks, such as Tyres on the Drive, The Floow, and
UKFast. Businesses developing enterprise software made up the largest share, with 35 making the top 100, but
the diversity of the region’s tech scene still showed through, with many companies operating in younger and more
niche sub-sectors such as IoT, AI and VR also gaining recognition.
Also released in Q1, Tech City UK published its 2017 report on the state of the digital nation. It further highlighted
that the North is quickly building itself up as a vitally important digital hub and innovation leader. Consequently,
research is now showing that Manchester has the second highest number of people employed in digital
businesses, and Leeds has the fifth highest average advertised salary for jobs in the sector.
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
2
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Featured investments
Push Doctor
Push Doctor’s founder and CEO Eren Ozagir on their £3.5m investment:
“At the close of 2015 we completed a Series A round of funding. This most recent round of
investment was a £3.5m top up from the same pool of investment partners.
The funding will allow us to continue to invest in the product which is critical for our effort
to further advance and run a market leading service capable of meeting modern patient
needs and offering GPs a new avenue to provide care. Healthcare shouldn’t be a rigid,
reactionary process, it needs to be a comprehensive, flexible, positive experience. By
continuing to perfect our product, we are in the position to transform healthcare into an
everyday engagement that consumers can enjoy and take advantage of easily.
Over the next 18 to 24 months we plan to leverage this most recent product investment to
build out our brand and bring a convenient, quality healthcare service to a broader patient
population - that means everyone.”
Atom Bank Atom Bank’s founder and Chairman Anthony Thomson on its £83m investment from
current investors BVBA, Toscafund and Woodford Investment Management:
“We are very pleased with the response we have had from investors. Our customers
benefit from the backing of highly reputable investors who are supportive of what we are
doing. This is a great vote of confidence in our growth prospects and plans for the future.
With the work we have done so far we are just beginning to see how transformational our
new approach to banking can be. There is so much more to come from Atom in the coming
months and years."
The Floow Founder and CEO of telematics technology provider business The Floow, Aldo
Monteforte, commenting on its £13m fundraise which included funds from China-
based investment group Fosun and a re-investment from Direct Line Insurance:
“Just five years from its foundation The Floow is now a leading provider of telematics data
services to the global insurance industry, and today my management team and I are proud
to have reached agreement for the completion of a meaningful financial investment that is
aimed at accelerating the company’s momentum and global growth.”
Cocoon Labs Sanjay Parekh, CEO and founder of Cocoon Labs – a business which utilises smart
technology to bypass traditional home security – said this about its fundraise on
Crowdcube:
“I’m really proud that Cocoon has raised over £2.46m from more than 1,100 investors. It’s
incredible for our team to know we have that many people supporting us in the next phase
of Cocoon’s journey.
The funds will enable us to expand our retail distribution, insurance partnerships and
continue to improve our product offering for current and future customers,”
Northern Tech Investment Q1 2017
Growth investments more than £10 million
Category
Company
Description
Investor(s)/
lender(s)
Investment
(£'000)
Date
Fin-tech
Atom Bank
plc
Atom is developing a digital-only retail banking
service. The company has also brought on board
Will.i.am for marketing purposes, the deal would
also give him a seat on the board and the option
to purchase shares worth millions.
BVBA, Toscafund,
Woodford
Investment
Management
83,000
6-Mar-17
Data
Analytics
The Floow
The Floow develops telematics analysis software
for vehicle service and insurance companies.
Direct Line
Insurance Group
PLC, Fosun,
United Electronics
Co
13,000
6-Mar-17
Med-tech
Redx
Pharma Plc
Redx Pharma is a drug development and
discovery company which focuses on small
molecule therapeutics for tumour immunology,
cancer stem cells, autoimmune disease, and anti-
microbial resistance.
Lanstead Capital,
Other investors
12,000
9-Feb-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
3
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
Growth investments between £1 million and
£10 million
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
Category
Company
Description
Investor(s)/
lender(s)
Investment
(£'000)
Date
Med-tech
Proveca
Proveca is using the latest technology in
developing drugs to treat chronic medical
conditions in children.
GM&C Life
Sciences Fund,
Kreos Capital
4,000 29-Mar-17
Telecoms &
Connectivity
Airangel
Airangel provides public and guest WiFi systems
for businesses, the hospitality industry, residential
buildings and public spaces.
Santander
Corporate
1,700 28-Mar-17
Hardware
Cocoon
Alarms
Cocoon is a smart home security system
developer which was founded to bypass
traditional home security, which the founders
believe is too expensive and complicated.
Crowdcube
2,460 27-Mar-17
Enterprise
Software
Sentric
Music
Sentric Music has developed an online music
royalty management and licensing service.
BGF
3,000 20-Mar-17
Mobile
Applications
LivingLens
LivingLens has developed a platform which can
transform spoken words from videos into
searchable items.
Angel(s)
1,300 15-Mar-17
Mobile
Applications
Push Doctor
Push Doctor allows patients to have private GP
appointments online, via a two-way video
conversation. The company has a network of
more than 7,000 UK-registered GPs, and has
over the past year grown to become the UK
market leader.
Co-Investor
Circle, Oxford
Capital, Draper
Esprit, Partech
3,500 27-Feb-17
Mobile
Applications
Survey Data
Solutions
Survey Data Solutions provides a smartphone
application for customer feedback, consumer
insights, customer experience management, and
customer services management.
Deepridge Capital
2,000 24-Feb-17
Enterprise
Software
Zaptic
Zaptic's cloud solution simplifies the management
and execution of frontline operations.
Angel(s)
Unknown,
but known
to be seven
figures
21-Feb-17
Telecoms &
Connectivity
Telesis
Telesis supplies businesses across the North
West with communication packages including
phone systems, calls and lines, mobile services
and broadband.
RBS
2,500 20-Feb-17
E-commerce,
Consumer
Clubhouse
Golf
Clubhouse Golf sells golfing equipment and
clothing online.
Yorkshire Bank,
Foresight
Regional
Investment Fund
4,000 16-Feb-17
E-commerce,
Automotive
HelloCar
HelloCar operates a peer-to-peer online
marketplace for used cars, with the company
taking care of the car checks, paperwork,
insurance and finance.
JamJar
Investments
1,000 12-Feb-17
Med-tech
SuperX
SuperX aims to develop antibodies used against a
target present in the blood coagulation process.
Johnson &
Johnson,
Medicxi Ventures
8,800
9-Feb-17
Hardware
Elstat
Elstat is a provider of energy management
devices for commercial beverage coolers. The
company commercializes artificially intelligent
refrigeration controllers for use in commercial
refrigerat rs.
Barclays
3,000 27-Jan-17
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
4
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
Growth investments between £1 million and
£10 million
Category
Company
Description
Investor(s)/
lender(s)
Investment
(£'000)
Date
Enterprise
Software
Pitchero
Pitchero is a Leeds based web development
platform for sports clubs. It manages 12,000
websites and has a registered database of over
1.2 million members.
ICM,
Other unknown
investors
3,100 24-Jan-17
E-commerce,
Automotive
Tyres on the
Drive
Tyres on the Drive allows customers to book
online and have their tyres fitted on their own
driveway or at work.
Halfords,
MMC Ventures,
True Capital
8,000 19-Jan-17
Hardware
Faradion
Faradion is focused on the development and
commercialisation of advanced, low-cost battery
materials.
Haldor Topsoe,
Mercia
Technologies,
Seedcorn Finance
3,200 18-Jan-17
Telecoms &
Connectivity
Origin
Broadband
Origin Broadband provides internet services,
supplying broadband and phone packages. The
company also operates their own network and
datacenter in South Yorkshire.
Calculus Capital
3,000
9-Jan-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
5
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
Growth investments less than £1 million
Category
Company
Description
Investor(s)/
lender(s)
Investment
(£'000)
Date
E-commerce
Land Trader
Land Trader operates an internet platform which
facilitates buying, selling and renting land.
Northstar
Ventures,
Angel(s)
250 30-Mar-17
E-commerce,
Consumer
Poptop
Poptop is an online platform designed to help find
providers and quotes for event entertainment, for
example musicians, comedians, event equipment.
Northstar
Ventures,
Angel(s)
120 27-Mar-17
IT Services
Intrasource
Intrasource provides IT support, consultancy and
hosting services.
UK Steel
Enterprise
150 22-Mar-17
Hardware
NotesNote
NotesNote is developing a device which can
access, manage and utilise musical scores in a
digital format
Unknown
57
8-Mar-17
Media &
Advertising
Plotist
Plotist operates an online platform which provides
the tools for people to write and share stories.
Entrepreneur First
10
7-Mar-17
Mobile
Applications
M14
Industries
M14 Industries owns and operates online
platforms to create niche-dating applications.
Jenkins and
Jones (from
BBC's Dragons
Den)
80
7-Mar-17
Ed-tech
Tutora
Tutora has developed online software that
enables students to search and book expert and
vetted tutors.
Crowdcube
710
5-Mar-17
Med-tech
Arcinova
Arcinova delivers best in class technology
services in the fields of contract research,
development and small scale manufacturing to
maximise effectiveness whilst minimising risk and
overall cost.
The
Northumberland
Development
Company,
FW Capital
810 20-Feb-17
Enterprise
Software
TouchRight
Software
TouchRight Software develops reporting software
for landlords, letting agents, and other property
professionals.
Finance Yorkshire
50 14-Feb-17
Enterprise
Software
Activ
Activ provides a range of software, hardware and
telecommunications services to businesses.
FW Capital
500 10-Feb-17
Fin-tech
Chetwood
Financial
Chetwood Financial is developing an online-only
bank.
Welsh
Government
750 10-Feb-17
Mobile
Applications
Digital
Bridge
DigitalBridge has developed an app that uses
augmented reality to allow people to virtually
decorate their rooms.
Angel(s)
700
7-Feb-17
IT Services
NuBlue
Nublue develops and hosts e-commerce websites
for national brands.
Lancashire
County Council
Rosebud
Business Finance
Undisclosed
3-Feb-17
Data
Analytics
Refract
Refract operates a video tagging platform. The
software enables corporate users to record and
upload video or audio content and add tags and
notes to the timeline. This assists corporate
clients in reviewing and analysing the
performance of employees in order to provide
feedback and establish learning plans.
Mercia Fund,
North East
Technology Fund
350
2-Feb-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
6
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
Growth investments less than £1 million
Category
Company
Description
Investor(s)/
lender(s)
Investment
(£'000)
Date
Hardware
Specialised
Laser
Products
Specialised Laser Products operates a laser
cutting business, offering a range of services
including flame and laser cutting, forming,
machining, grinding and fabrication.
Finance Yorkshire
75 30-Jan-17
Med-tech
BiVictriX
Therapeutics
BiVictriX develops therapies designed to treat
blood cancer, using a dual-action antibody
targeting method.
Alderley Park
Ventures,
Finance Wales
Angel(s)
500 19-Jan-17
IT Services
Gaist
Gaist provides technology consultancy and
software development services to the highways,
transportation, and emergency services sectors,
specialising in mapping systems and geospatial
referencing.
Lancashire
County Council
Rosebud
Business Finance
200 12-Jan-17
Media &
Advertising
Dexerto
Dexerto develops a website for gamers that
allows them to connect with one another and read
gaming-related content on the site.
Seedrs
207
8-Jan-17
Enterprise
Software
The Human
Group
The Human Group provides online recruitment
services for businesses.
Rivers Capital
Partners
Undisclosed
4-Jan-17
E-commerce,
Consumer
Perfect
Getaways
Perfect Getaways operates a website which
allows the owners of holiday homes to interact
directly with customers.
Merseyside
Special
Investment Fund
50
4-Jan-17
Data
Analytics
queek'd
queek'd develops an online dating comparison
website that uses a quiz to determine which
dating websites match the individual's
requirements.
Angel(s)
30
3-Jan-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
7
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
M&A transactions
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
Category
Company
Description
Buyer(s)
EV (£'000)
Date
IT Services
NTE
Communica-
tions
NTE provides telecommunications and internet
hardware and services for businesses.
MBO with HSBC
Undisclosed 23-Mar-17
Enterprise
Software
Telux HD
VoIP
Telux has developed a VoIP product for resale, its
servers have not gone down once in the last 12
months.
Invosys
Undisclosed 20-Mar-17
Media &
Advertising
GluePR
GluePR is a digital commications company which
operates using social, online and traditional
platforms.
W
Communications
Undisclosed 20-Mar-17
Media &
Advertising
Pixel
Inspirations
Pixel Inspirations provides digital signage and out
of home media agency services to organizations
in the United Kingdom and Europe.
Internet Media
Services S.A.
Undisclosed
3-Mar-17
Hardware
ObservIT
ObservIT specialilses in the installation of wireless
communications infrastructures.
Ollycom
Undisclosed
1-Mar-17
Enterprise
Software
Emergent
Network
Intelligence
Emergent Network Intelligence develops software
to support and improve business processes. An
example is its Police Authorised Data Downloads,
a solution that reduces the amount of time taken
by an insurance company to be informed that one
of their vehicles has been involved in a road traffic
collision or recovered from being stolen.
Verisk Analytics,
Inc.
Undisclosed 28-Feb-17
Med-tech
Fine
Industries
Fine Industries engages in chemical
manufacturing, contract chemical research,
environmental services, facility management, and
software development.
Lianhe Chemical
Technology
103,000 27-Feb-17
Media &
Advertising
weare79.co
weare79.co is a digital creative design agency
offering services including motion graphics, web
development and general content creation and
planning.
Tall
Undisclosed 24-Feb-17
E-commerce,
Automotive
Contract
Vehicles
Contract Vehicles provides commercial vehicle
contract hire and fleet management solutions.
LBO with
Bridgepoint
Advisers
Undisclosed 20-Feb-17
IT Services
Root6
Provides storage, server and specialist
technology solutions and managed services for
media and higher education clients such as ITN,
BBC and Honda R&D.
Jigsaw24
(NorthEdge)
Undisclosed 16-Feb-17
Media &
Advertising
HYPE 36
HYPE 36 is a creative digital agency specialising
in building websites, mobile marketing campaigns,
and video services.
Single Malt
Undisclosed 10-Feb-17
Media &
Advertising
NSM Music
Group
NSM is a leading digital jukebox manufacturer
and operates a digital music network serving bars,
pubs and restaurants in locations in North
America, the United Kingdom and Europe.
AMI
Entertainment
Network
Undisclosed
9-Feb-17
Data
Analytics
Derwentside
Environmental
Testing
Services
Derwentside Environmental Testing Services
provides analytical services for environmental,
construction, waste, fuel, and engineering
industries in the United Kingdom.
MBO
Undisclosed
9-Feb-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
8
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
M&A transactions
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
Category
Company
Description
Buyer(s)
EV (£'000)
Date
Mobile
Applications
Playdemic
Playdemic produces the Lego mobile games
along with others such as Gourmet Ranch, Village
Life, Gang Nations, and Golf Clash. The
company's entire portfolio has been downloaded
50 million times.
TT Games
(subsidiary of
Time Warner)
Undisclosed
8-Feb-17
Media &
Advertising
Space
Creative
Space Creative is a digital design agency based
in York.
Wrapped Agency Undisclosed
6-Feb-17
Cyber
Security
Secure
Information
Assurance
Secure IA designs, develops, builds, and supports
information security, and hosting and
collaboration solutions. Its infrastructure as a
service provides clients with a secure platform
upon which to host virtual machines of various
sizes and service levels.
UKFast.net
Undisclosed
5-Feb-17
Med-tech
Steeper
Group
Steeper is a specialist designer and producer of
artificial limbs for the NHS. It was originally set up
to provide prosthetic limbs to veterans of the First
World War, and since then has expanded across
prosthetics, orthotics and assistive technology.
MBO
Sale of Bebionic
Division to
Ottobock
Undisclosed
3-Feb-17
Enterprise
Software
IQUS
IQUS, trading as RotaMaster, provides roster and
workforce management solutions software for the
healthcare industry.
M3, Inc.
7,280
3-Feb-17
IT Services
Coal Face
Development
Coal Face Development designs, develops and
provides ongoing support services for websites.
They also provide digital marketing services
including search engine optimisation.
Drummond
Central
Undisclosed 31-Jan-17
E-commerce,
Automotive
Zenith
Zenith has more than 500 employees and
provides end-to-end automotive services focused
on contract hire, salary sacrifice, fleet
management and short-term hire services using
their proprietary technology.
MBO with
Bridgepoint
750,000 30-Jan-17
IT Services
Landesk
(now Ivanti)
Landesk offers user-centered IT solutions
designed to increase user productivity while
reducing IT security risk.
Clear Capital
Partners
Undisclosed 30-Jan-17
Enterprise
Software
Liquid Voice Liquid Voice develops enterprise call recording
and contact centre software.
SVL Business
Solutions
25% stake,
undisclosed
24-Jan-17
Media &
Advertising
True North
True North is a TV production company which
made over 150 hours of factual content in 2016.
Shows such as A New Life in the Sun, Building
the Dream, and some single Dispatches and
Panorama documentaries.
Sky
Undisclosed 23-Jan-17
Media &
Advertising
Cuffe &
Taylor
Cuffe & Taylor produces live events, as well as
providing event management services for existing
promoters in the United Kingdom.
Live Nation
Entertainment,
Inc.
Undisclosed 23-Jan-17
Cyber
Security
icomply
icomply develops security software with features
such as CCTV video management, record &
playback, key control, lone worker and dispatch
management.
Veracity
Undisclosed 19-Jan-17
Media &
Advertising
Excel Media
Solutions
Excel Media Solutions provides contract
publishing, online, digital, and events services.
Buxton Press
Undisclosed 18-Jan-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
9
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Northern Tech Investment Q1 2017
M&A transactions
Category
Company
Description
Buyer(s)
EV (£'000)
Date
Hardware
Cable Power Cable Power distributes power products and
accessories to single board computing providers
such as Rapid Electronics, Farnell, CPC and
Raspberry Pi.
Stadium Group
750 12-Jan-17
Hardware
Thyson
Technology
Thyson is a specialist analytical and
instrumentation business, which designs and
constructs engineering solutions used in the
analysis and sampling of gases and liquids for
process industries such as the pharmaceutical,
steel and utilities sectors.
MBO with NVM
Private Equity
Undisclosed
4-Jan-17
Hardware
CMD
CMD designs, develops and manufactures
products which help meet the challenges of
integrating power and media access for people
working in offices.
Ideal Industries
Undisclosed
4-Jan-17
Sources: Beauhurst, S&P Capital IQ, KPMG proprietary research.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
10
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Questions? Please contact our TMT team
Graham Pearce
Head of KPMG Corporate Finance Technology, Media and
Telecommunications in the North
Graham Pearce leads KPMG's technology, media and
telecommunications sector business in the North. He specialises
in advising on M&A transactions and also is supported by a multi
disciplinary team of industry specialists across tax, advisory and a
within KPMG.
Contact details:
Phone: +44 (0) 113 231 3855
Email: graham.pearce@kpmg.co.uk
kpmg.com/uk
udit
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