News

Uali, an AI-powered robotics company that specialises in drone surveys of energy assets, has secured a £625,000 investment by the Cornwall and Isles of Scilly Investment Fund, from appointed fund manager The FSE Group.

The investment, which is part of as part of a larger £1.55 million funding round, will be used to establish the company’s UK office at the Newquay Aerohub, which will include a drone testing facility, bringing 20 jobs to the area over the next three years.

Focussed on the oil, gas and sustainable energy sectors, Uali offers a ‘drone-as-a-service’ solution to the costly problem of monitoring and reporting on the maintenance of difficult to reach sites such as oil rigs and wind farms.

Data is collected using drones, capturing images from clients’ operational sites. A real time analysis powered by AI records potential issues by identifying abnormalities from the information received and can even prepare an automated equipment parts order list.

Uali’s innovative end-to-end service is proving popular with market-leading companies such as Shell, Telefonica and YPF.

Ian Bogado, CEO at Uali, commented: “We’re a global company who see positioning ourselves in Cornwall as a smart move. It will help us seek out local talent and deliver what we need in terms of research and development. Additionally, Cornwall has five airfields available for us to test our existing and new products. We’re really excited to expand our UK operations and get our new team on board to help us further disrupt existing tech in a very fast-growing market.”

Anna Staevska, Investment Manager at The FSE Group, added: “Uali’s technology offers a real solution to a problem faced by anyone with a hard-to-reach asset, meaning their growth potential is fantastic. We’re delighted that such a strong company has seen the many advantages of basing themselves in Cornwall. Uali’s proven track record, agile team and impressive customer base makes them an attractive investment proposition and we are glad to welcome them to our growing CIOSIF portfolio.”

The £40m Cornwall & Isles of Scilly Investment Fund provides debt and equity finance from £25,000 to £2 million to help growing small businesses across the region. It was established by the British Business Bank in partnership with the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP).

John Acornley, LEP non-executive director and chair of the CIOSIF Advisory Board, said: “Uali combines artificial intelligence, robotics and unmanned aerial vehicles to turn field data into a valuable commodity. Their disruptive technology has many applications and we’re delighted the fund has enabled Uali to set up a new base in Cornwall.”

Paul Jones, Senior Manager at the British Business Bank, said: “The investment by CIOSIF has helped attract an innovative international business to Cornwall, that is committed to recruiting locally and developing a collaborative programme of research and development in the region. We look forward to its further growth.”

CIOSIF 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.

For more information about the Cornwall & Isles of Scilly Investment Fund including how to apply, please visit www.ciosif.co.uk  or follow the fund on Twitter at @CIOSIFBBB2

Cornwall based Refined Brands, the digitally native portfolio of ethically sourced, natural and sustainable British brands, has completed a £6.75 million equity funding round, including £1.5 million of investment by the Cornwall and Isles of Scilly Investment Fund (CIOSIF) from appointed fund manager The FSE Group.

The deal represents the largest single investment by CIOSIF to date and is the largest by funding round size with CIOSIF participation.

The funding, which includes investment from new and existing private investors, will be used to further accelerate the growth of its portfolio companies, both in the UK and internationally which includes:

Celtic & Co: Founded by Nick and Kath Whitworth in 1990, and headquartered in Cornwall, Celtic & Co. is a pioneering retailer of ethically sourced, natural sustainable knitwear, footwear and outerwear. The brand continues to stay true to its heritage, with in-house manufacturing of its footwear continuing to take place in Newquay, Cornwall.

Frugi: Established by Lucy and Kurt Jewson in 2004, and headquartered in Cornwall, Frugi has built an exceptional reputation for sustainable childrenswear, using organic cotton throughout their collection as well as designing outerwear made from recycled plastic bottles.

Turtle Doves: Founded in 2009 by Kate and Graham Holbrook, and headquartered in Shrewsbury, Turtle Doves uses post-consumer textile waste to create beautifully upcycled new garments and accessories, all manufactured locally to Turtle Doves’ Shropshire base.

Kettlewell Colours: Founded in 2004 by Melissa and John Nicholson and headquartered in Somerset, Kettlewell Colours was created to enable women to shop their best colours all year round, working with small, family-run factories in Portugal, Turkey and the UK who share their environmental values.

Ben Barnett, Chairman of Refined Brands, said: “The creation of Refined Brands was motivated by a desire to build a differentiated family of sustainable fashion brands, alongside founders and teams that shared our passion and vision. I am delighted to welcome CIOSIF as investors into our expanding group. We value their experience in supporting businesses throughout the region and believe their input will help us achieve our ambitious goals for organic growth in the UK and internationally.”

 Anna Staevska, Investment Manager at The FSE Group, added: “We are delighted to be supporting such a strong business that is headed up by an immensely passionate and experienced team. The group will be further strengthened by the recruitment of 15 new staff members across the manufacturing, customer services and warehouse teams, supported by funding from CIOSIF. The sector is wide open to Refined Brands, as the ethical fashion market is growing much faster than the core UK retail industry, and Cornwall is fast becoming a market leading region in the sustainable fashion sector. We look forward to seeing the business develop even further.”

The £40m Cornwall & Isles of Scilly Investment Fund provides debt and equity finance from £25,000 to £2 million to help growing small businesses across the region. It was established by the British Business Bank in partnership with the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP).

John Acornley, LEP non-executive director and chair of the CIOSIF advisory board, said: “Cornwall’s growing reputation as an incubator of tech-savvy, ethical businesses is further boosted by this deal which is helping to establish a new force in the world of ethical and sustainably-sourced fashion.”

Paul Jones, Senior Manager at the British Business Bank, said: “This is the Fund’s largest single investment to date and the biggest equity deal CIOSIF has supported. Driving sustainable growth is at the heart of our mission and Refined Brands is another example of a Cornwall-based business that has put sustainability at its core.”

CIOSIF 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.

For more information about the Cornwall & Isles of Scilly Investment Fund including how to apply, please visit www.ciosif.co.uk  or follow the fund on Twitter at @CIOSIFBBB2

A coach and bus company that provides passenger services and holiday excursions has received a £180,000 investment from Finance Yorkshire.

Barnsley-based Globe Holidays runs public buses across West and South Yorkshire and employs more than 60 people.

The investment, from Finance Yorkshire’s Business Loan Fund, supports the acquisition of new vehicles and on-board ticketing technology.

Globe Holidays also operates private hire and school transport services, along with a UK holiday programme and day excursions. The company runs travel shops in Barnsley, Bradford and Rotherham.

Following the launch of several new routes this year, Globe Holidays has recruited 18 people and added 11 vehicles to its fleet. The company now operates 28 buses and 16 coaches.

Scott Woolley, managing director of Globe Holidays, said: “The investment from Finance Yorkshire comes at a time of rapid expansion for the business. They recognised our need for gap funding and quickly developed a good understanding of our business.

“The investment has enabled us to further expand our team and ensure reliable connections for local communities within South and West Yorkshire.

“As more people return to travel, we are looking forward to welcoming them on board our services, where they will now experience the latest in ticket machine technology.”

Alex McWhirter, chief executive of Finance Yorkshire, said: “Our investments are designed to support growing companies to realise their potential and create jobs in Yorkshire and the Humber. This is especially true when traditional finance providers are unable to meet their requirements.

“As the travel industry continues to recover from the pandemic, we are looking forward to seeing Globe Holidays continue to cement its status as one of the region’s leading passenger transport providers.”

Finance Yorkshire’s Business Loan Fund is part of its wider regional business fund which is expected to provide more than £50m to SMEs over the next five years. Investment is also available from its Growth and Seedcorn Funds.

A Nottinghamshire based outdoor clothing and equipment company has secured funding from the Midlands Engine Investment Fund (MEIF), provided by The FSE Group Debt Finance Fund and backed by the Recovery Loan Scheme.

The £1.5million investment from the MEIF will help create 16 new roles, fund seasonal stock purchase, product development in footwear and e-bike lines and enable the UK to take over the bike frame painting function from China.

Alpkit designs, manufactures and sells a range of specialist outdoor apparel, equipment and bicycles suitable for challenging environments and extreme activities at a significantly lower price point than large, high-end competitors. 

The company is also a certified B Corp, committed to the highest standards of social and environmental impact. The company’s registered charity, Alpkit Foundation, supports sustainability focused community projects.

David Hanney, Alpkit CEO, said: “With a buoyant outdoor market and strong brand positioning we have built a business with £12m+ turnover that has great potential for further growth. With challenging exchange markets and supply chain issues dominating trading conditions for many businesses in recent months, we are delighted to receive this MEIF funding, which gives us the ability to expand our employee base and seize the opportunities available to us.”

Chris Bailey, Investment Manager at The FSE Group, commented: “Alpkit’s  knowledgeable and experienced management team has established a strong revenue stream that is capable of further acceleration, thanks to a viable expansion strategy that includes increasing physical stores in the UK as well as their international online presence. Alpkit’s growth momentum has remained resilient, despite wider economic factors impacting businesses currently, and we are happy to be supporting them on their growth journey.”

Alpkit’s community focus and sustainability credentials reflect its culture and resonate with its customer base. It is well-positioned to take advantage of a booming outdoor market across camping, hiking, climbing, trail running, outdoor swimming and cycling and is estimated to be worth over £7.5bn in the UK alone.  

Mark Wilcockson, Senior Investment Manager at British Business Bank added: “The MEIF aims to finance innovative, sustainable and high growth oriented Midlands businesses that create a positive economic impact in the region. Alpkit’s success is a very good example of that, and showcases the benefits that SMEs in the Midlands have and can aim to achieve with MEIF funding.”

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 2014-2022 and the European Investment Bank. The FSE Group manages a section of MEIF that provides investments between £100,000 and £1.5 million to support growing SMEs across the region.

Fewer small businesses are now borrowing money according to The British Business Bank’s second annual Nations and Regions Tracker, published yesterday (23 November 2022).

Does that make borrowing a bad idea in 2023? Let's have a closer look at the numbers.

38% of smaller businesses were using external finance in the second quarter of 2022, down from 45% a year earlier, driven mainly by repayment of Bounce Back Loans and CBILS.

Overdrafts, loans, asset finance and credit cards remain the most widely used products, with overdrafts in particular seeing a resurgence. The deteriorating economic picture and increase in input costs is, unsurprisingly, creating the need for more working capital for many.

Asset finance is the most used ‘alternative’ finance product (and, incidentally, the best way of acquiring vehicles and equipment).

The way small businesses are financing themselves is also becoming more varied. The proportion of businesses now only using non-government-backed loans has dropped 15 percentage points to 22%. Indeed, the proportion of businesses using a blend of government-backed loans, grants and traditional finance has increased from 21% to 23%. 

The report also gives insight into the appetite to apply for finance, and the likelihood of being turned down.

Nationally, nearly a quarter (22%) of businesses in need of finance did not apply in 2020-21 and 11% of applications were declined.

The report found that businesses in the most deprived areas of the UK* are more open to using finance and report higher levels of ambition for growth. Nearly half (49%) of businesses in the most deprived areas have a long-term ambition to be a significantly larger business, compared to 40% elsewhere. They are also more willing to use external finance to grow (36% vs.33%). 

So, what does this all mean for you?

There are several useful take-outs from this data for business owners planning their approach to 2023.

• Debt is not something to be taken on lightly, but equally, it is not something to be afraid of. Despite all the gloom, there are growth opportunities in the economy and there are some very early indicators that inflation might be nearing its peak. Carefully considered borrowing to support growth in 2023 could be the right strategy.
• Not applying for the finance you need for fear of being turned down is the wrong approach. A conversation with a good broker may open the way to loan products, loan schemes and providers that you weren't previously aware of, including government funded loan schemes and regional investment funds.
• 11% of loan applications being declined in 2020-21 means that 89% were accepted. The odds are in your favour for any properly presented business case.
• Regional variations in success rates are likely to be driven by differences in property prices (i.e. security), business sector concentrations and the general distribution of wealth influencing credit scores and borrower contributions. Again, a good broker can help you navigate these challenges if you live in one of these areas.
• More businesses are using a mix of government-backed funding, grants and non-government backed loans to meet their overall requirements. A funding strategy or roadmap is a useful part of your business plan and is something that our funding experts can advise on.

If there is anything in this update that affects you, we will be pleased to put you in touch with one of our regional funding experts for advice.

A Guest blog from our friends at Productivity Finance