It was the year of Brexit (again), another bruising general election, and trauma in the retail fund industry with the demise of Woodford and the gating of property funds. Against this backdrop the VCT and EIS industry continued to grow in 2019, providing individuals with the opportunity to invest in exciting companies with the potential to generate handsome returns whilst encouraging much needed growth in the UK economy.
Calculus were pioneers when we launched our first Approved EIS fund back in 1999 and after two decades of success we were thrilled to launch our 20th EIS fund in 2019. Our investment philosophy has always been simple –find growing, entrepreneurial companies led by talented management teams. This approach paid off when one of our portfolio companies Synpromics, was acquired in August delivering our investors a return that significantly exceeded our target. Of course, you cannot always pick the winners, and investing in smaller UK companies isn’t without risks. 2019 also saw two of our portfolio companies deliver a loss for investors. Our diversified portfolio approach means that the downside should be offset by the winners we choose, and this is proven by our exit data which shows that including the failures, our exits deliver around a 2x return (not including tax relief).
We’re constantly seeking out new investment opportunities in thriving areas of the UK economy. This combined with our heritage in running EIS funds made us the natural choice to run the new UK Creative Content EIS Fund which was launched in June, in association with the British Film Institute (BFI). Investing in the fast-growing creative content industry, the fund has already made its first investment, in Wonderhood Studios, a venture run by the former head of Channel 4, David Abraham.
These are just two examples from another award-winning year of hard work. We assessed over 600 deals and made a number of investments as you will see in the month-by-month summary below.
Here are some 2019 highlights:
January: Invested £2.5m in Essentia Analytics, a fintech company used by professional investors.
Collagen Solutions was awarded a £1.54m grant from the Scottish Government towards its R&D costs. The biotech company produces collagen which is used for wound care and cartilage repair.
Blu Wireless Technology completed a £12.6m funding round, in which Calculus invested £3.2m alongside ARM and new institutional investors.
February: An American healthcare company bought a 9% stake in prenatal testing company Yourgene gaining exclusivity with one of their products for three years.
March: Arecor, which is developing a new treatment for diabetes, strengthened its management team with the appointment of Susan Lowther as Chief Financial Officer. Susan has experience at giants like Monsanto as well as with smaller, high growth companies.
April: Point of Care (PoC) diagnostics company Mologic announced that it had opened a US subsidiary. Its products will allow patients to manage conditions such as respiratory disease at home.
Every1 Mobile helped to create the world’s first online platform to educate professionals on the needs of deaf children.
Invested £2.5m in ideas management software company Wazoku. Clients such as John Lewis & Partners and the Ministry of Defence use the platform to capture, evaluate, improve and implement ideas that arise from across any audience.
May: With funding and support from the Bill & Melinda Gates Foundation, Mologic established the Centre for Advanced Rapid Diagnostics (CARD) platform to deliver unprecedented improvements and innovation in lateral flow technology.
Money management app Money Dashboard appoints former Revolut chief financial officer Peter O’Higgins, taking up the same title.
June: Scancell raised £3.9m from Vulpes Life Sciences. The new investment capital increases funds available to advance our product pipeline
C4X teamed up with another UK-based biopharma to look for treatments for ‘undruggable’ diseases such as Parkinson’s.
Money Dashboard increased the number of financial institutions it is integrated with to 60.
The UK Creative Content EIS Fund, in association with the BFI, was launched.
Calculus won Outstanding Contribution to EIS Investment Management by Fund or Portfolio Manager at the EISA 25th Year Anniversary Awards.
July: Calculus completed four investments – in Arcis Biotechnology, Quai Administration Services, Money Dashboard and Every1Mobile
August: The sale of Synpromics, in which we first invested in 2015, yielded a return for our investors that significantly exceeded the target.
Calculus were part of a £4.6m funding round for Money Dashboard.
ActiveOps acquired a US company that is expert in extracting data from enterprise computer systems.
September: Scancell signed a collaboration agreement with an antibody technology company.
October: Weedingtech drove the expansion of its Foamtech product with coverage in the US press.
November: SVC2UK (Silicon Valley comes to the UK) named Wazoku as one of the 70 fastest growing technology companies in the UK.
The antibiotic-induced hearing loss assay, produced by Genedrive, received its CE marking and hospital trials started.
Molecularly Imprinted Polymers specialist MIP Diagnostics signed a commercial agreement to licence a novel product for the security field.
December: Purchasing software forensics business FISCAL Technologies received £3.6m funding from Calculus and others.
The UK Creative Content EIS Fund made its first investment, in Wonderhood Studios.
Exit for Once Upon a Time, which netted investors a total expected return of 1.8x after a holding period of 4 years and 1 month.
Award-winning growth investment specialists
In June we attended the EIS Association 25th anniversary awards. We were delighted to take home two awards, the first for our Chief Executive John Glencross, who was honoured for his Outstanding Contribution to the EIS Industry and the second for Calculus Capital which won Outstanding Contribution to EIS Investment Management by a Fund or Portfolio Manager.
2019 was an exciting year for Calculus. The mix of new investments, two successful exits and demonstrable progress by the portfolio companies underlined the quality of our business and the foundation we have for 2020.
We would like to thank our investors, their advisers, our portfolio companies and all our team here at Calculus.