Wednesday January 1st 2020

Loungers £91m | Chamberlin £32m | Earth-i | Touchnote £5.1m | Chirp | Zopa | Pink Boutique £15m

News about 7 UK growth companies and/or accelerators + turnover in the GRID marketplace 28th May – 3rd June 2017:

LOUNGERS: Face it, we’re addicted to growth | Kiki Loizou, The Sunday Times. May 28

DZ profile: Loungers Limited

Business: cafe and bar chain with more than 100 sites

Launched: 2002

Location: Bristol

Founder: Alex Reilley, chairman,

Staff: more than 2,000 staff on its payroll

Financials: annual profits of more than £12m. Turnover increased by 30% to £91m last year

Investment: In December, a majority stake was sold to LION CAPITAL, the private equity firm, in a deal valuing the business at £140m.

News: plans to open 20 sites this year. Loungers is one of the rapidly expanding British companies identified by Fast Track, the Oxford research team that monitors this country’s fastest-growing private ventures via league tables in The Sunday Times.

CHAMBERLIN: Rise of electric vehicles casts shadow over British foundry | Kate Burgess, FT. May 29.

DZ profile: Chamberlin Plc

Business: engineer and iron castings company which makes components for cars, mine turbines, crash bars for emergency exits and specialist lighting for danger spots

Launched: 1890. It started as a Walsall foundry casting money boxes, toffee hammers and decorative door stops.

Location: Midlands

Staff: Kevin Nolan, chief executive of four years

Financials: makes below £1m in operating profit. Its balance sheet is lumbered with a pension deficit of £5m and debts of £6.8m, which will rise to £8m in the next year or so. £32m in group revenues

Investment: It floated on the stock market in 1946 and moved to Aim earlier this century. Has a market value of £12m

News:

1. At times, survival means taking big risks and making hard decisions. Recently that has meant no dividends for investors and millions spent on fending off competition. This year Chamberlin closed its Leicester foundry that manufactures mid-size castings for agricultural vehicles because it could not hold its own against lower-cost producers elsewhere. Chamberlin’s Scunthorpe foundry, which makes heavy castings … is just about breaking even but its revenues fell 9 per cent in the year to March.

2. The board’s strategy revolves around the growth in turbochargers that make car engines smaller and greener. Chamberlin’s Walsall foundry manufacturers about 3m small bearing housing castings for turbochargers a year. …within two years, Chamberlin will be selling 5m housing castings a year, says Mr Nolan. Better still, recently installed machinery will polish up and finish its basic iron casts, fattening margins and boosting revenues to close to £39m by 2019.

EARTH-I: UK start-up aims to provide super-sharp images of planet | Peggy Hollinger, FT. May 29

DZ profile: Earth-i Ltd

Business: space imagery company aiming to provide the world’s most advanced commercial imaging of the earth from space. The service is aimed at companies or public agencies that want to monitor facilities or events.

Launched: 2013

Location: Bromley, Kent

Founder: aerospace engineer, Richard Blain

News:

1. plans to launch a prototype satellite this year and a 15-strong orbiting network within three years. Earth-I said the constellation of satellites would be capable of capturing images at resolutions higher than 1m per pixel.  Each satellite will orbit the earth from the north to the south poles 15 times a day, enabling far more detailed continuous observation, said Mr Blain. Earth-i’s target date of 2019 to launch the constellation will depend on the company raising the financing. Mr Blain said that the plans required roughly £100m over three years, using debt and other financing.

2. The technology has drawn the interest of the EUROPEAN SPACE AGENCY, which is in early discussions about using the Earth-i data in the service offered by Copernicus, the world’s largest earth observation programme. Earth-i is developing the service in partnership with SURREY SATELLITE TECHNOLOGY and will announce the timetable for its plans at the UK Space conference in Manchester, which starts on Tuesday.

TOUCHNOTE: Photo app startup just turned a profit for the first time and is expanding to the US | Lynsey Barber, City A.M. May 31.

DZ profile: Touchnote Limited

Business: startup which lets you send a real-life postcard of holiday snaps from your phone. Has now sent 9m postcards of people’s holiday pictures and memorable moments to date via the smartphone app.

Exports: Currently the UK is TouchNote's biggest market, accounting for more than half of sales. By the end of 2018 it envisions the US being the largest, but will continue growing globally. It prints postcards and greeting cards in the UK, US, Australia and Germany. The firm's US expansion will be based out of Los Angeles

Launched: 2008

Location: Old Street, London

Staff: has a 30 strong team including engineering and operations. Chief executive Oded Ran, a former executive for Microsoft's Windows Phone will now be based in the US. Chief product officer Dan Ziv who sold his restaurant booking app Uncover to US startup Velocity in 2015 will take over as managing director of the UK and rest of the world.

Financials: has turned a profit for the first time and grown revenue to £5.1m in 2016, up from £3.4m the year before

Investment: It's currently backed by private investors to the tune of around £6m, but did not rule out further investment in future, though it is not actively looking at present.

News:

1. It has recently expanded into canvases printed with photos and is promising more, as yet unnamed, products and features this year. It also uses algorithms to pick the best pictures from an album to print a box full of snaps.

2. While the app, which recently underwent a re-brand, has been around for some time, Ran said there was "absolutely" no better time to be in the business of making digital life physical. "Out of every 1,000 texts, WhatsApp messages and Facebook posts there’s going to be one worth remembering - and that’s what we’re there for," he said citing the rise of Polaroid style prints, vinyl and the popularity of physical over ebooks as a sign of people looking for a "more thoughtful way to communicate".

CHIRP: Standard Chartered ex-deputy chief executive Mike Rees named chairman of tech startup | Lynsey Barber, City A.M. May 31

DZ profile: Asio Ltd

Business: startup working on technology that can transfer data via sound. Chirp works like a sonic barcode and has been used by the makers of video game Skylander, Activision Blizzard, to let users transfer characters between phones and console in its most high-profile use to date. EDF and Audi are also clients.

Launched: 2012

Location: Tottenham Court Road, London W1

Founders: formed by scientists working at University College London

Staff: chief executive, Moran Lerner

Investment: initial backing from UNIVERSITY COLLEGE LONDON and IMPERIAL INNOVATIONS (TOUCHSTONE INNOVATIONS). It has since raised cash via equity crowdfunding and from early-stage Chinese investor GUANQUN INVESTMENT.

News: The ex-deputy chief executive of Standard Chartered, Mike Rees, has been appointed as chairman to help "push the company to the next stage of its development".

ZOPA: raised £32m ahead of challenger bank launch, from Spotify and iZettle-backer Northzone and India's Wadhawan Global Capital | Lynsey Barber, City A.M. June 1.

DZ profile: Zopa Limited

Business: one of the UK's first online peer-to-peer (p2p) lenders - matches borrowers with investors wanting to lend. Achieved £800m loan value in the past 12 months and passed the £2bn mark at the start of the year.

Launched: 2005

Founders: Giles Andrews, chairman and Richard Duvall, Egg co-creator, who died in 2006

Location: London SE1

Staff: chief Jaidev Janardana

Investment: Investors include BALDERTON, BENCHMARK and AUGMENTUM CAPITAL. In preparation for the launch of its own challenger bank, has just raised £32m from Indian financial services firm WADHAWAN GLOBAL CAPITAL and NORTHZONE, the VC backers of Spotify, iZettle and MARKETINVOICE. This brings total funding to £87m 

News: 

1. announced in 2016 that it was applying for a banking licence from financial regulators and plans to launch its own banking services: a deposit account, personal loans, car financing credit cards and loans, alongside p2p investment products such as the Innovative Finance Isa (IFISA).

UPDATE:

Zopa back in black | Rosamund Urwin, The Sunday Times. July 1 2018

2.  ....pre-tax profit of £111,000 in 2017, against a £5.8m loss in 2016. Has lent out £3.3bn in total. Rising default levels have led it to be more selective on who it allows to borrow. Wants to launch its bank within a year. A float has been pencilled in for 2020.

PINK BOUTIQUE: Fashion start-up’s journey from eBay trader to £15m in 5 years | Chris Tighe, FT. June 1

DZ profile: Pink Boutique Limited

Business: online retailer - the go-to site for young women looking for party playsuits and dresses. Started in a sitting room, the company now occupies 60,000 sq ft of warehouses on an industrial estate on the edge of Newcastle.

Exports: Sales are growing in Estonia and Lithuania, too.

Launched: 2012

Location: Newcastle

Founders: Alice Hall, 28 and mother, Julie Blackie

Staff: The company employs 67 people, plus 10 agency staff to cope with the sales rush.

Financials: This profitable enterprise has grown from nothing to £15m annual turnover in five years without borrowing or a business plan. Expansion was rapid. In its first financial year, Pink Boutique turned over £500,000. Current year turnover is expected to be £22m. In a single day last month, the company sold 3,500 garments for £101,000. It ships up to 4,000 parcels a day.

Investment: Ms Hall and her mother own the business entirely, with 50 per cent each

News:

1. Central to Pink Boutique’s success is its close connection with what its founders call “our girl”, its target 18-35-year-old customer. The company, which advertises solely on social media, has 336,000 followers on Instagram and 1.3m Facebook fans.

2. Many dresses, tops and trousers are made on request by garment businesses in Leicester in England’s Midlands, from where Pink Boutique sources half of its 2,000 lines.  The rest comes from China. UK sourcing means designs can be up for sale on the website within a fortnight of ordering. Each week, Pink Boutique offers 85 new garments, many priced below £25. Stock has a shelf life of about 12 weeks.

3. With new senior managers, it is time for the business to enter a second phase …to build the operation. Dan Arden, a former head of retail at high street chain New Look, who joined in April as commercial director. He is among several experienced retail sector employees recruited as the company has grown; others have been hired from John Lewis, Harrods, Berghaus and Misguided. Many, including Mr Arden, are north-easterners returning home.  Stuart Middlemiss, retail operations director, is another recent recruit.