Tuesday, July 28, 2015

News: Finance Yorkshire looking for the next Xeros

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Early stage investment from Finance Yorkshire is helping to develop and nurture some of the region's most innovative and successful companies - including Rotherham-based Xeros.

Finance Yorkshire was the first European JEREMIE (Joint European Resources for Micro to medium Enterprise) initiative to become fully invested in England. The £90m fund had three investment teams, Seedcorn Finance, Business Loans and Equity Linked Investments. It secured £45m from the European Investment Bank, together with £30m investment from the European Regional Development Fund (ERDF) and £15m from the Government via Yorkshire Forward.

The Seedcorn Fund provides investment of up to £780,000 in businesses which are developing new technology-based solutions which have the potential to disrupt their chosen markets.

Two companies that received Seedcorn funding from Finance Yorkshire hit the headlines after listing on the Alternative Investment Market (AIM) and growing their market values considerably.

Xeros Technology Group plc is based on the Advanced Manufacturing Park (AMP) in Rotherham and is behind a new bead-based cleaning technology which results in significant savings on water, energy and detergent while at the same time delivering improved cleaning results.

Finance Yorkshire made three investments in Xeros totalling £1.45m. The company, led by CEO Bill Westwater, floated with a market capitalisation of £80m and has more than doubled its share price to 260p.

Xeros had just three employees in 2009, but now has more than 70 staff across the UK, US and China. It recently announced a deal with German speciality chemicals business LANXESS, which will see its technology applied to the leather processing industry.

Finance Yorkshire invested £520,000 in York-based OptiBiotix Health plc which listed on AIM when its market value was £6m, and in just 12 months that has risen to over £27m.

Julian Viggars, investment director of the Seedcorn Fund (pictured), said: "Our portfolio includes some of the most exciting science and technology based businesses in the UK. Investing in these businesses requires specialist knowledge and a long term approach as value is not created overnight.

"We have nurtured Xeros and OptiBiotix from the very start and continue to support them. A listing was once seen as providing an exit for venture capitalists but we are successfully using the public markets to provide businesses with additional investment capital to continue their long term growth.

"As Xeros and OptiBiotix have experienced, a listing is also very effective in raising a company's profile to both a national and global audience and to attract the very best management talent.

"Xeros is the perfect example of the type of company that we seek to back – innovative, early stage businesses that will become high-growth companies of the future. The region has a strong tradition in engineering and manufacturing, with a strong skills base, and we expect more opportunities to emerge."

Finance Yorkshire's investments to date have created and safeguarded 10,196 jobs across Yorkshire and the Humber, increased turnover by £309m and generated private sector leverage of £179m.

In February the fund announced that it had secure funding from Round Six of the government's Regional Growth Fund (RGF) to invest in businesses across Yorkshire and the Humber. In April it announced that it had secured further support from the European Regional Development Fund (ERDF).

Xeros website
Finance Yorkshire website

Images: Finance Yorkshire

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