Record investment as xénos Business Angels celebrate 10th anniversary

06/06/07

xénos, the Wales Business Angel Network, has facilitated £2.1million of investments into Welsh SME’s over the past year - a record level in its 10 year history.

The figures released by xénos reveal a growing trend in Wales-based owner-managers seeking growth capital from private equity investors and highlights the increased confidence of investors in the unquoted equity market.

xénos Network Manager, Leanna Davies, said the latest figures also demonstrated the high quality of investment opportunities in the whole of Wales and the confidence business angels had in Welsh SME’s and the economy.

“This is a record year for us – our tenth anniversary - with 15 investments completed by the business angels ranging from £20,000 to £500,000 and leveraging a further £924,636 of private sector funds into early stage, second round and acquisition deals, which is a new area for xénos.

“Over the past three years investment levels have increased year on year – first breaking the £1million barrier in 2004. More and more investors are realising that becoming a business angel can be an attractive alternative investment with the additional benefit of becoming involved in an exciting growing business. The tax breaks available under the Enterprise Investment Scheme have also contributed to the growth.”

xénos has a network of business angels throughout Wales who are high net worth individuals. Through the network of almost 120 potential investors, owner-managers can seek growth capital by circulating their projects after signing up to xénos, as well as through regular regional and Wales-wide networking events, investment fora and training seminars.

Completed deals have involved a variety of sectors including IT, medical devices, environmental and manufacturing, as well as companies at various stages in their growth.

Fairwater Fuels of St Mellons, Cardiff, developed a revolutionary fuel contamination filtering system and needed investment to take the product forward. In a deal brokered by xénos, a syndicate of investors has ensured the company can take it to market.

The company has developed FuelActive™ to combat the costly issue of diesel contamination in plant and machinery. It filters fuel from the top of tanks rather than from the bottom where sediment sits.

Another xénos brokered deal will result in a Mid Wales solar energy company expanding into new markets as the interest in alternative energy develops.

Bright Light Solar of Tywyn, Gwynedd, needed capital investment so that it could expand into a new business unit in the town in order to develop new solar products. Local xénos business angel, Peter Saunders, jumped at the opportunity to invest in the company as he realised the huge growth potential in the alternative energy sector.

In North Wales, Trace Technologies has developed a software system that could save the aerospace industry millions of pounds. In a syndicated deal brokered by xénos, the St Asaph-based company has secured £600,000 from private investor Geoff Andrews, Finance Wales, HSBC and the Welsh Assembly Government.

With hundreds of miles of fibre-optic cabling often used in just one large aircraft, it can take more than a year for engineers to complete installation. Trace Technologies Ltd’s new software – Photonic Interconnect System Designer (PISD) – allows this to be cut to just a few months through the use of groundbreaking software technology.

Throughout the UK in the second half of 2006, the number of business angels making investments rose by 30 per cent, with 250 angels making investments. Of the 4,620 registered angel investors who are part of 19 recognised leading business angel networks within the UK, 5.4 per cent made investments during the same period, with the average investment amounting to £68,315.

Leanna added: “The Wales business angel network is performing well compared with the rest of the UK, with our average investment increasing to £100,000 over the past 12 months. Activity remains high and we are confident of the number of deals we’re likely to broker over the next 12 months.

xénos and Finance Wales are jointly supporting the annual British Business Angel Association Conference which takes place in Cardiff on the 4th July.

The event will attract business angel networks from the UK and internationally, investors, venture capitalists and professionals to the Welsh capital where key speakers including David Smith, Economics Editor of The Sunday Times and Peter Linthwaite, Chief Executive of the British Venture Capital Association will be discussing the impact of globalisation on the early stage investment market.