Business Weekly - Cambridge, UK

Companies seeking between £250k and £2m – the figure at which traditional VC investors become interested – have been handed a boost with the news that the GEIF Ventures Early Growth Fund has been doubled to £5m.

The innovative fund was established to increase the investing power of business angels, by co-investing alongside them. It is managed by NW Brown Group, with the DTI’s Small Business Service (SBS) providing the capital.

The fund is allied to business angel investment network, the Great Eastern Investment Forum.

It is one of an increasing number of initiatives aimed at increasing the availability of growth capital for all stages of a company’s growth.

The arrival of the CREATE East of England Venture Capital Fund last year has also injected new impetus into the market locally.

Nigel Brown, chairman of NW Brown Group said: “This is a major achievement and I am delighted that we not only proved co-investing is one of the most effective and efficient ways to bridge the equity gap‚ but that even more investees and angels will be able to benefit from this proposition over the next 2-3 years.”

Max Bautin, who manages GEIF Ventures, added: “This further DTI contribution also means that GEIF Venture’s investing power will be increased to a possible £500k per venture, subject to private capital matching.

“Initially, GEIF Ventures can co-invest up to £100k and, if appropriate, follow up its investment after 9 months. This additional investment power will give business angels and GEIF Ventures the increased ability to support their investees to later stages of their development, affording them a greater chance of succeeding.”

In the last year GEIFV has invested a total of around £800k, alongside £2.6M of private investment, in eight seed and early stage companies in the technology and traditional business sectors.

The fund’s latest investment is in a spin-out from the world-famous John Innes Centre in Norwich, Novacta Biosystems.

It invested £100k in the company, alongside GEIF members, including Westgate Hall.

Novacta’s drug development activities are focused on natural products, small molecules produced by microorganisms, which are starting points for development of many of the drugs in widespread use today.

These activities are complemented by the company’s biotransformation services that target the pharmaceutical, chemicals, cosmetic, flavour and fragrances industries. 

At the heart of Novacta’s technology platform is a ‘toolbox’ of approaches for harnessing the exquisite chemical selectivity of biological systems. These systems are used to develop efficient processes to synthetic targets and to manipulate the biosynthesis of natural products in order to alter activity, pharmacokinetics and other properties.

The Cambridge office of Mills & Reeve acted as GEIFV’s legal adviser on the transaction.

The fund has also invested in Artimi, OnRelay, Quotient Diagnostics, Reality Telecom, Spice Inns, Transversal and Visit4Info.