Silver Jubilee and golden returns for Cambridge Capital Group

Dawn soon turned to daylight and a new Millennium was duly born. Billions of dollars had been harvested on the back of scare stories that abounded in the build up to that New Year’s Eve and all the panic proved unfounded.

Quietly then and without fuss, Struan McDougall and colleagues had officially founded Cambridge Capital Group. And 25 years on it celebrates its Silver Jubilee having invested many millions in a handsome stream of businesses that have steadily accumulated immense value.

CCG, as the group has become affectionately known, has backed cutting edge UK technology and rock solid businesses that have done well on stock markets in the full public glare or privately under a more forgiving gaze.

With the support of co-Director Jayne Parker, the group has continued to develop, attracting private investors, business angels and single-family offices from wider afield and from a diverse range of commercial backgrounds.

CCG backs all the technology segments in which Cambridge is strong, such as engineering, materials, medtech & biotech, AI/ML/robotics, B2B digital service, but its reach is international. Members are drawn from a broader area than simply East Anglia. This includes London, the Channel Islands and the length and breadth of England – and across a variety of business sectors.

A genuine bonus is that CCG perennially collaborates and syndicates on deals with like-minded groups. Its members also collaborate within CCG when considering the potential impact of deals. While the core management team handles the initial screening, its investors then have the task of choosing preferred options from all the businesses showcased in any particular cohort.

Cambridge Capital Group champions all-round excellence. For example it has been running a long-standing programme for MBA and MFin students from the University’s Cambridge Judge Business School. This has proved extremely popular - and successful – with the selection process enhanced by the process of screening so many promising submissions.

The crowning glory of CCG’s investment successes to date has arguably been the near-billion dollar swoop by US giant Visa International shortly before Christmas 2024 for Cambridge Science Park company Featurespace, whose brilliance has successfully fought online financial fraud around the world.

That was CCG’s 25th exit in almost 25 years and the 10th in the last five – neat pieces of symmetry regardless of what successes the future holds for the group.

Spectacular as that deal proved, the real success for Cambridge Capital Group has surely been its consistent ability to back winners that are not always headline makers. As a private investor network, for a variety of backers – angels, family offices and private investors – it has been remarkably consistent in its ability to identify and encourage support for sound and solid performers, often over a long haul.

Calculations are exactly that, rather than an exact science, but over its lifespan Cambridge Capital Group has invested around £50 million in somewhere north of 150 companies and achieved 25 exits at a combined valuation of more than £1.5 billion. Its live portfolio totals 88 companies and McDougall estimates that almost 300 investors have been members at some time or other with many staying involved across a couple of cycles for between 10 and 15 years in total.

While silver is the prevailing colour given CCG’s 25th Anniversary, McDougall’s memories of the roots of the enterprise are very much golden while the launch ventures covered both the light and dark blue elements of the spectrum. He recalls that the founding investor and his family had actually begun backing hi-tech enterprise in 1997-98 – and not just any old business. Two of those early deals involved nCipher in Cambridge and Bookham Technology in Oxford and both excelled, graduating to the London Stock Exchange.

Run by the van Someren brothers, Alex and Nicko, nCipher provided solutions for cloud, IoT, blockchain, and digital payments enabling organisations to protect sensitive data, ensure data integrity and meet compliance mandates.

McDougall recalls that CCG was able to ride the upwinds of the tech boom of the time and that the appetite of backers remained pretty healthy even after the inevitable crash of tech stocks – and, importantly, the network principally supported unlisted start-up ventures which were not at mercy to such fiercely contrasting headwinds.

As most of the funding members were East Anglian – McDougall’s own parents had met at the University of Cambridge, for example – the network naturally gravitated towards Cambridge as its home.

While many of the companies in the portfolio were gated in the innovation cauldron of Cambridge, the broader alchemy is very much British. A great many deals down the years have been relevant to a broader UK technology market and generally have provided generous returns to members, often having leveraged the EIS scheme which incentivises private investors to back innovation-led ventures.

Some notable successes are studded through the Cambridge Capital Group portfolio. They include Swiftkey, a predictive keyboard app sold to Microsoft in a deal reportedly worth $250 million in February 2016. The acquisition was regarded as a strategic move for Microsoft to bolster its artificial intelligence efforts and expand its reach on mobile platforms like iOS and Android.

Also a proud part of the portfolio is mobile commerce company Bango, a steady performer on London Stock Exchange and which has all the US technology greats as customers. Ultra-wideband real-time location specialist Ubisense was another undoubted success story for the Group, along with AIM-quoted ITM Power, which was one of the first movers in the hydrogen space, incidentally.

Underlining the group’s ability to spot future winners, portfolio business IQGeo, a geospatial network management software ace that had grown out of Ubisense, was sold to KKR in the US for $429.8m late last year having won Quoted Company and Business of the Year at the Business Weekly Awards.

Other notable CCG successes have been 10to8 and Arachnys. 10to8 was a global appointment and scheduling software business eventually sold in a private equity deal at the end of January 2023. Arachnys, an anti-fraud and KYC software company, was acquired by the financial crime compliance firm AML RightSource in March 2021 in another successful exit for CCG investors.

Other notable exits saw speech synthesis specialist Phonetic Arts bought in a trade sale by Google and Cavendish Kinetics swallowed by Qorvo in the US.

McDougall observes: “The value created by all these companies and many more – plus the returns generated for investors together demonstrated what is possible to achieve if you back world-beating technology and talented teams with seed risk capital in an innovation cluster such as Cambridge.

“In fact, the number of technology companies, the jobs created and aggregate turnover of the cluster, built around the incredible science at key labs and faculties of the University of Cambridge surely indicate that the city is Europe’s leading innovation centre and one of the most important in the world – overlooked for years by London financial markets and media because they didn’t understand B2B.

“Yet, quietly, a private group like ours has been investing in 10-15 new companies a year and committing c. £50m (not including corporate members and funds) since we were formed.

“Our founding members – entrepreneurs and owners of successful private companies around East Anglia – recognised what was happening in the 1990s and started investing as business angels in a few spinouts. In truth we also invested in a start-up from Oxford, which proved to be one of the most successful investments the group has ever made, but Cambridge is our spiritual home and where we have continued to operate for 25 years as an organised network – even though we operate across a much broader geographical span these days.

“The group has continued to develop, attracting private investors, business angels and single-family offices from wider afield and from a diverse range of commercial backgrounds; membership remains open to new investors. There has been growing interest in the last few years in ‘climate’, sustainability and impact.

“While ClimateTech is not a main investment focus for our members, they have supported our conservation and biodiversity grants programme.”

Philanthropy is an item firmly on Cambridge Capital Group’s agenda. As McDougall observes, angel investing is high impact by definition and the group’s CSR programme, The CCG Trust – a registered charity – has been supporting conservation and biodiversity in Africa for 15 years.

In that time, CCG has raised a considerable amount of money from its network and also made grants to 10 carefully selected fieldwork and community conservation initiatives in key landscapes across seven countries, “long before it became fashionable.”

As with angel investing in Europe’s top tech cluster, CCG has always been a pioneer across its activities. The group is substantially supported by high-quality corporate partners who sponsor a series of member investment events and additionally offer services to investors and portfolio companies to help them navigate the often tricky, early-stage investment process and the enduring challenge of sustaining business growth.

The mention of endurance is not out of place. Some of the founding members of Cambridge Capital Group remain participants today!