Technology-focused investor Axiomlab has raised GBP12 million from an institutional placing. The regional provider of development capital and business building expertise is looking to expand its operations and its team, as well as augmenting its investment portfolio. In the next 12 months, the firm plans to set up in the Midlands, the North East of England, and Ireland.
Axiomlab floated at a price of five pence per share on the Alternative Investment Market (AIM) in August last year (see EVCJ September, page 17). One of the survivors out of a dwindling number of UK-based Internet accelerators, the firm is committed to early stage regional technology, software and wireless businesses, taking at least a 20 per cent share.
Axiomlab’s niche is to target Scotland and the North of England, a region where there are significant opportunities but where it is thought there are limited sources of very early stage venture capital finance.
Axiomlab typically invests after a company has raised its initial seed funding, but is not yet sufficiently developed to qualify for larger funding rounds. In the prevailing business climate, it is anticipated that the valuation of companies in which Axiomlab invests will typically be below GBP5 million. Three of the firm’s last four investments were made at an initial valuation of less than GBP3 million.
The placing of 208,695,652 new ordinary shares will raise up to GBP12 million before expenses. The new ordinary shares to be issued under the placing will be conditionally placed with certain institutional investors. The placing is not underwritten. New investors include Aberdeen Asset Management and Bank of Scotland. Original investors Merrill Lynch Investment Managers and Morley Fund Management have increased their holdings.
Fred Mendelsohn, managing director of Axiomlab, says the fundraising has been achieved in unquestionably difficult market conditions thanks to the encouraging response from existing shareholders as well as the number of new blue chip institutions that have committed capital. Inspite of current market conditions, the directors of Axiomlab believe that the firm’s deal flow continues to be strong and has been enhanced by its network of formal and informal contacts, which increase as Axiomlab’s reputation grows.
When it floated, Axiomlab has funds invested in: Auctions2Business Limited, a Manchester-based on-line auctioneer of pre-owned industrial plant, machinery and equipment, which could be developed into a platform for the consolidation
of regional off-line auctioning businesses; NetLet Holdings Limited, an Edinburgh-based company which provides a database of online residential letting accomodation and is being developed into a platform for the sale of technology and other services to public sector organisations; and a passive investment in Firmgrowth Limited, an institutionally-backed Blackpool-based company whose subsidiary offers an interactive graduate recruitment directory and student lifestyle portal.
Since flotation Axiomlab has invested in: Casmir Limited, a Salford-based knowledge management company; Image-metrics, a Manchester-based software technology enabler providing solutions for the automated interpretation and analysis of images and video; Csols, a Runcorn-based company specialising in the development and implementation of software solutions for laboratory instrumentation; and Empiricom Limited, a Manchester-based expert-systems software company.