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About The FSE Group

At The FSE Group, our focus is to support the rise of high growth UK SMEs, especially in underrepresented areas of the UK. As a dedicated early-stage investor and lender with over 20 years’ of experience in the early-stage SME market, we have seen how, over time, the ecosystem has started to mature.

The growth of the VC market

In particular, the European Tech industry has seen significant growth over the last 10 years, with the UK at its focal point. A recent report published by Mountside Ventures (access here), found that UK start-up expenditure has increased from £2 billion in 2011 to £12 billion in 2020. This is welcome news for the UK tech ecosystem, but is it realistic to expect this level of growth to be sustained?

The British Business Bank’s recent report on VC returns in the UK, found that Funds which are based outside of the Golden Triangle (London, Oxford and Cambridge) offer the potential for higher returns.  

The report also mentions that early-stage VC’s have the potential for higher returns than other stages of the market – this is particularly positive news given the historical reluctance of institutional LPs in Europe to invest in early-stage Venture Funds. However, the capital raised by Buyout Funds in Europe, was still 3.7x higher than the capital raised by Venture Funds in Europe (Atomico’s State of European Tech 2019), so there is still quite some way to go.

As the UK SME investment industry matures, Funds start to specialise in specific areas or sectors due in part to the potential availability of more businesses in these sectors who are looking to raise capital.

SMEs and the current economic climate

Whilst there is uncertainty in the current markets due to COVID-19 and it is still too early to know what the real impact of this crisis will be on the SME ecosystem, the inherent qualities of Venture Funds allow them to be resilient, because they are designed to cope with uncertainty and market cycles due to their long fund lives. This can be taken a step further with regard to Evergreen Funds, which do not, unlike many Venture Funds, have a fixed fund cycle. Thus allowing for long-term, patient capital to be re-invested into SMEs, especially in the early-stages.

In Summary

It is clear that the early-stage SME market in the UK is growing and needs a strong early-stage finance industry in order to support its growth. At The FSE Group, we are committed to supporting eligible, ambitious, innovative, high growth and scalable SMEs to help fuel their growth ambitions, as an essential part of helping the UK’s economic bounce back.

To find out more, why not join us for a fireside chat with Mountside Ventures on the 10^th of December at 12:00? We will be discussing early-stage fundraising for SMEs and how they can improve their chance of success. To attend this event, please register on the Eventbrite link here: https://bit.ly/2V4QHlr

Words by Julie Silvester, Head of Commercial at The FSE Group.

London based business, Inspection² has secured a £250,000 loan from The Greater London Investment Fund (GLIF) backed by the Coronavirus Business Interruption Loan Scheme (CBILS).

Inspection² has been transforming the automation of industrial inspection since 2012. Inspection² was incubated inside Sky-Futures, a leading global drone services provider and spun out before the sale of Sky-Futures to Private Equity in May 2019.

Inspection² software uses Artificial Intelligence (AI), Automation, and 3D visualisation to automatically analyse inspection images, saving up to 70% of engineering time compared to traditional methods. A powerful AI platform that enables the captured data to be turned into actionable information. This delivers major reductions in OPEX and risk by providing a path to inspection automation and reporting by exception. Its ability to correctly identify billable assets also supports more effective inventory, Partner, and cost base management.

As an independent business, Inspection² will focus on industrial inspections within the Telecommunications, Transmission & Distribution and Oil & Gas sectors, solving critical business infrastructure problems.

Whether inspection, upgrade, maintenance or decommissioning, this technology enables those sectors to utilise all of the information needed to make better and more informed decisions. The client can store and manage large volumes of data collected from multiple sources including handheld cameras and smartphones, delivering significant flexibility.

James Harison, Founder and CEO of Inspection² commented: “Understanding the unique requirements of our target sectors is key to our business. The software solution was built to specifically address the volume of data being collected by drones and to automate data processing, allowing an operator to build up a picture of industrial asset condition over time, in a highly structured asset base. This loan will help us strengthen our business and I would like to thank GLIF and David at The FSE Group for facilitating the loan to help us continue to service our existing contracts and to deliver our future plans.”

David Booth, Senior Fund Manager for The FSE Group, who manage the £55 million GLIF debt fund on behalf of Funding London, commented: “We were impressed by the team at Inspection² who have developed a product which saves time and money for operators of critical infrastructure assets. The market opportunity is substantial across Telecommunications, Transmission & Distribution and Oil & gas and we look forward to supporting the business through its next phase of growth.”

Maggie Rodriguez-Piza, CEO at Funding London, adds: “Inspection² 's AI based solution, offers important efficiency gains in critical infrastructure sectors such as oil and gas.  We are delighted the loan provided by GLIF will help James and his team deliver existing commitments, facilitate growth and achieve future business goals in 2021 and beyond.”

GLIF is a £100m initiative to help address the SME finance gap in Greater London, promoting economic growth through enterprise and an inclusive and sustainable economy. £55m of debt funding is available, via loans between £100,000 and £1m, to early-stage and established SMEs looking to scale-up and realise their growth ambitions. GLIF is financed through the European Investment Bank (EIB), European Regional Development Fund (ERDF), London Waste & recycling Board (LWARB) and Funding London’s Legacies.

The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy and industrial Strategy (BEIS). Deadline for CBILS applications has been extended to 31st January 2021 for UK businesses.

A Leicestershire based food safety technology business has secured a £500,000 investment to scale-up operations and boost their ambitious growth plans.

Navitas Digital Safety Ltd (Navitas), which operates out of Phoenix Park in Coalville, has secured the finance from The FSE Group Debt Finance Fund through the Midlands Engine Investment Fund (MEIF).

The firm is set to use the funding to invest in the development of the first of its kind safety platform, which will be a single destination for food safety. The platform will allow hospitality businesses to manage their entire safety operations, all in one place. It will also enable Navitas to offer a SaaS model, providing the platform at a monthly price, making the best safety tools and services accessible to any size business.

Established in 2014 by Ben Gardner, Navitas digitalises time consuming and labour-intensive food safety processes, which must be followed to maintain food safety and health and safety regulations within the food hospitality sector.

Ben Gardner, CEO of Navitas, commented:

“Every food service business knows and understands the importance of health and safety. I am passionate about making the complex world of food safety legislation as simple and cost effective as possible. Our aim is to become the leading “one stop” food health and safety consultancy, compliance, training and digital safety management company within the food hospitality sector. Having successfully secured the funding, we can confidently grow our business to the next level to achieve this.”

Paul Lynam, Fund Manager at The FSE Group, which manages the MEIF Debt Finance Fund added:

“We are proud to have supported Navitas with their expansion plans. The job creation will have a positive impact on the local economy and further strengthen the future of the business. Through the Midlands Engine Investment Fund, The FSE Group are committed to providing finance for innovative Midlands based businesses with the potential to grow.”

Lewis Stringer, Senior Manager at the British Business Bank said:

“The MEIF fund managers work closely with one another across the Midlands to help businesses in the region access the finance they need to develop and grow. This latest investment into Navitas builds on the earlier debt and equity finance provided by MEIF and demonstrates the various finance options available through the fund. We’d encourage other businesses across Leicestershire and the whole region to consider these options.”   

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

For more information about Navitas Digital Safety Limited, visit  www.navitas.eu.com

In the SME market, banks are focused on secured lending. Deviation from this type of secured lending is usually applicable for larger SMEs, when banks may consider unsecured projection led lending for that SME undertaking a larger transaction, for example a £25m turnover business about to make an acquisition.

Many commercial equity funds are focused on real high growth business, especially those which already have existing turnover.

The conclusion is that more funds which can combine both debt and equity funding and which focus on the “S” of SME are required.  

This will allow the right solution to be deployed:

• Debt finance - if the business can support debt after perhaps a capital repayment holiday to allow the new monies to be put to good use to ultimately generate the future on-going repayments (this naturally also reduces the need to dilute shareholding at that stage).
• Equity funding - if the business is looking to grow rapidly and is focused on innovation & long-term shareholder value (or if it is too highly debt leveraged already, or the growth story cannot support debt at that stage).

These funding solutions are best delivered locally with Relationship Investment Managers.  Regional focus works to encourage general economic growth, but also allows additional focus on particular sectors, under-represented groups or those with a specific purpose, for example supply chains / productivity.

Business loans and equity solutions available via The FSE Group

The FSE Group offers funding solutions and support for all sizes of eligible SMEs. Currently there are 8 regional Funds under management, which can act as a key building block to leverage additional finance, for local SMEs. We are dedicated to bridging the SME funding gap to serve innovative, ambitious and scalable SMEs who, for whatever reason, are unable to source funding from conventional or even alternative funding channels to support their growth ambitions.

By understanding the direction and business goals of the individual SME and its clear expansion and growth plans, the business loans or equity solutions available, could enable them to make that step change to achieve the next level of growth for their business.

The Funds are supported by the likes of the British Business Bank and the LEPs / Local Authorities who have played such an important role in supporting market gap impact funding, and it is evident that the continued support of more Regional Funds is crucial to the recovery and growth of the smaller SMEs.

The power of creating smaller funds to support the community

The FSE Group’s parent entity is a Community Interest Company and it is a purpose led organisation. As a fund management business, we have a real passion and successful history in deploying and managing economic impact market gap funds to support SME growth.

The funds managed always have an economic impact purpose to them rather than a pure commercial return.  The organisation has the capability and proven track record of managing both debt and equity funding and therefore can create the right solution / combination of those funding options.

The Group promotes sustainability and has a proven track record of successfully recycling smaller funds to generate continuous economic impact.  This is shown for example, with the East of England Regional Growth Loan Scheme which is a £6.5m Fund, but over time that £6.5m has been recycled and has supported 225 businesses, agreeing more than £27.5m worth of loans and leveraging a further £75m of other finance into growth orientated SMEs. Supporting these businesses has created 1,100 new jobs with the East of England. The fund remains solid with the net assets still above £6.5m.

Complete our enquiry form to find out how we could support your business.

Words by Paul Marston, CEO at The FSE Group.

Husband and wife team Drs Robin and Nikki Cordell, have secured £300,000 from the Thames Valley Berkshire Funding Escalator (TVB) to further grow, develop and expand their multi-disciplinary occupational health services business.

Robin and Nikki retired from their military careers in 2013, with over 30 years’ combined experience delivering occupational health services. Embarking on civilian life, they were both keen to investigate a way in which they could continue to pursue excellence in health and wellbeing in the workplace and positively impact on the workability of people with health issues.

They established “Cordell Health,” a new type of quality occupational health service. Their business strives to deliver excellence in health and wellbeing in the workplace and to provide a positive impact for employers and employees alike. Workplaces have changed beyond recognition in the wake of the COVID19 pandemic. Now more than ever it is important to ensure that relationships between the health of the employee, their working environment, and duties undertaken are safeguarded. Occupational health services are more than just an administrative task to manage sickness absence. It is ensuring employees with a health condition are fit to work after a period away from the working environment. It encompasses the physical and emotional wellbeing and mindfulness of employees undertaking their roles; be that in an office environment or remotely.

Cordell Health aims to provide a dynamic, sustainable and ethical manner when delivering their services which will in turn support organisations to provide a working environment which enables all employees to be engaged, productive and well. These key factors are provided by the exceptional, workplace health services which Cordell Health provide.

Cordell Health is SEQOHS (Safe, Effective, Quality Occupational Health Service) accredited, an award entrusted to an Occupational Health provider governed by the Faculty of Occupational Medicine (FOM), the professional and educational body for occupational medicine in UK.  

Dr Nikki Cordell, Co-Founder of Cordell Health, commented “In 2016, Cordell Health re-launched as a social enterprise. Our social mission is to remove, wherever possible, barriers to employment of individuals with a disability or long-term health condition. The funding from TVB will enable us to expand our own team of healthcare experts and further the development of our services, to the benefit of our current and future clients.”

Cheryl Weeks, Head of Funds, South East for The FSE Group, commented: “Being a social enterprise is very important to Drs Robin and Nikki Cordell, who strive to make a positive difference in the workplace coupled with their vision to shift the focus from disability to ability. Cordell Health specialises in providing early intervention and expert support to HR and managers in the field of workplace health and wellbeing. It was a pleasure to be able to secure funding for the dedicated team, enabling them to reach out to more businesses ensuring they benefit from the specialist occupational support and advice.”

TVB Expansion Loan Scheme is part of TVB Funding Escalator, an £11.3m initiative funded by Thames Valley Berkshire LEP. The escalator, which also includes a Trade Finance Loan Scheme and a Growth Equity Fund, provides eligible companies with loans and equity funding between £50,000 and £300,000 for activities that will deliver high-growth and employment opportunities.