Haatch Ventures Enterprise Investment Fund

Haatch Ventures Enterprise Investment Fund

PROVIDED BY
STRUCTUREFund
MIN. INVESTMENT£10,000
SECTORTechnology
TRANCHE CLOSE31 October 2020
CLOSING DATEEvergreen
Risk score
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Synthetic Risk and Reward Indicator (SRRI) is calculated by the fund manager following guidelines set out by the European Securities and Markets Authority (ESMA)

The content below has been provided by Haatch Ventures who are authorised and regulated by the Financial Conduct Authority under firm registration number 916959.
Haatch Ventures

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Summary

Founded by Scott Weavers-Wright and Fred Soneya in September 2013 as an angel co-investment joint venture under the “Haatch Angel” brand, Haatch is an early stage investment business backing the pioneers of the digital revolution.


The Haatch Angel core focus has been within the SaaS and retail technology verticals. However, with the launch of Haatch Ventures, the investment focus has expanded to cover B2B SaaS, Pro-Consumer, On-Demand, Gig Economy and Digital Consumer.


Haatch was founded on the back of the start-up program at Kiddicare. Kiddicare.com, founded by Scott Weavers-Wright and sold to Morrisons in 2011 for £70m cash, hand-selected retail technology start-ups to provide first-of-their-kind customer experiences, creating a platform which led to 10+ start-up acquisitions. 


With the continued growth of its own private investment portfolio and Haatch brand, Haatch launched Haatch Ventures in September 2018 and was excited to welcome Simon Penson (founder of Zazzle Media) and Mark Bennett (Director of Hardware Partnerships for Google) to the team as partners.


Simon and Mark bring a wealth of experience, exits and support to power Haatch and the Fund’s investments into the next chapter of growth.


Over the past 7 years, Haatch Angel & Haatch Ventures have between them made 20 investments into 13 highly scalable digital companies. The pace of investments is now accelerating with Haatch Ventures leading 5 investments over the last 12 months.


This fund seeks investments in early-stage EIS qualifying companies that can exhibit highly scalable and disruptive models for growth by enabling digital transformation.


Haatch is a team of hands-on value creators. It has been there. Built scaled companies and sold them. It will use that knowledge, experience and network to accelerate the growth of portfolio businesses via its “Smart Money” approach, providing support in many areas, including go-to-market, digital development and marketing.


Haatch uses its significant venture capital relationships to help provide the portfolio with seed, series A and growth financial support, as well as leveraging its business relationships and brand to provide portfolio businesses with support from product development to marketing to FTSE 100 introductions.

Highlights

  • Targeting a 10x return on investments over 4 - 7 year holding period
  • Portfolio companies have raised over £30 million in follow on funding
  • Focus on companies that have ideas to transform established markets with digital innovation
  • Led by a management team who have been at the heart of digital transformation for the past 21 years
  • Elevaate, backed by Haatch with a £30,000 SEIS investment in August 2014 provided a return on investment of 276x
  • Closing Date - this is an evergreen fund with tranche closes. Next close: 31st October 2020 - full deployment by 31st November 2020

Investment strategy

Each of Haatch's investments has the protential to be a category killer, by disrupting the vertical they are in. You will notice that Haatch's older investments have a slight bias towards retail technology and B2B SaaS. This was fueled by Scott and Fred’s backgrounds; however, we have continued to diversify thanks to the extra dimension and experience brought in by Haatch partners Simon and Mark. Both bring significant marketing and mobile expertise to the table along with the shared passion for consumer tech and the march of digital transformation.


Looking at the broader market, digital is a key growth driver across many industries. Haatch is therefore able to remain broad in sectors yet focused on the most transformative businesses. This provides investors with access to what Haatch deems an extremely exciting early stage and scale-up investment portfolio.


With the rise of gig-economy and on-demand enabled consumers, you will see this reflected in Haatch’s existing portfolio from Marvel, which breaks down barriers in the digital design community to enable anyone to design, to Buymie, which provides one-hour grocery delivery to consumers across Dublin. B2B SaaS and pro-consumer tech also continues to drive significant growth with the number of corporate acquisitions growing year-over-year and this is reflected across the Haatch portfolio with Veritonic, Scurri, Elevaate (now exited) and Iterate.ai. 


Moving forward the focus will continue to be on well-known markets in addition to making investments in new markets being fueled by technology enablement, including smart devices, artificial intelligence, blockchain and mixed reality.


Company Stage

Haatch's investment focus is twofold, firstly on early stage investment opportunities with a sweet spot being an early MVP with some early traction in market. A good example of this within the existing investment portfolio is Marvel, highlighting the Haatch experience in discovering, vetting and backing such early stage opportunities.


Secondly Haatch has the opportunity to invest in follow-on rounds for both existing Haatch Angel and Haatch Ventures LLP companies. These are companies which Haatch has worked with from an early stage, launched to prove product-market-fit, shown significant growth and often gone on to raise investment from some of the largest funds in the UK and internationally. This provides investors with the unique opportunity of investing into an established scale-up.


Haatch investment stages sees investments focusing on “Initial Seed” funding, where Haatch provides the first and only initial money into the company as well as “Seed” funding, where Haatch provides first or second money into the company and fill or syndicate the round. With “Follow On” funding, Haatch makes additional investments into existing companies which have become scale-ups.

Exit strategy

Haatch is different, rolling the best attributes of EIS funds, angel networks, accelerators, family offices and incubators into one to create a 'Smart Money', hands-on approach to investing and supporting digital companies at their very early stages, all the way through to scale-up and exit.


The Smart Money approach provides all portfolio businesses with support directly from the partners of the Investment Manager as well as from the Investors (if they wish) and joint networks.


Haatch expect to invest in a company in the first 1-2 rounds prior to a series A led by a larger investor. Typically, Investors should expect companies to exit over 4-7 years from investment. However earlier exits are possible and have been achieved.


Risks

Investing in early-stage companies involves risks including loss of capital, illiquidity, lack of dividends and dilution. Past performance is not a predictor of future performance. The availability of tax relief depends on individual investors personal circumstances.


If you are in doubt about eligibility for tax reliefs or the tax treatment of your investment, you should seek independent tax advice.

Market approach

Smart Money

Haatch is different, rolling the best attributes of EIS funds, angel networks, accelerators, family offices and incubators into one to create a 'Smart Money', hands on approach to investing and supporting digital companies at their very early stages, all the way through to scale-up and exit.


The Smart Money approach provides all portfolio businesses with support directly from the partners of the Investment Manager as well as from the Investors (if they wish) and joint networks.


Portfolio Composition

Haatch provides investors with a blended portfolio of a minimum of 4 investments with target of 6 investments across early stage companies who are enabling digital transformation.


The projected minimum and maximum investment sizes are £100k - £1m, although there will of course be outliers to this rule.


Larger rounds will be supported with outside investment from the strong network Haatch has developed of investor relationships including business angels & VC funds.


Haatch expect to invest in a company in the first 1-2 rounds prior to a series A led by a larger investor. Typically, Investors should expect companies to exit over 4-7 years from investment. However earlier exits are possible and have been achieved.

Key team

Scott Weavers-Wright - Co-Founder & Partner

Scott is best known for founding one of Britain’s largest e-commerce businesses, Kiddicare.com, which was subsequently acquired in cash for £70m, by Morrisons, one of the UK’s largest supermarkets.


Reaching 6th on the Retail Week Power List, Scott is regarded by many as one of the UK’s most innovative business professionals in retail.


After the Kiddicare acquisition, Scott became Managing Director and Chief Architect for Morrisons.com and has a wealth of experience in building and scaling large e-commerce businesses across the UK.


Founding Haatch, Scott has invested in, and developed businesses in the areas of ad tech, B2B SaaS (software as a service) and retail tech within the FMCG market including Elevaate, founded in 2014, which enables supplier monetisation programs across retailer websites.


Elevaate was acquired by Quotient Technology Inc. (NYSE: QUOT) based in Mountain View, California in October 2018, 4 years after investment from Haatch and smashed the fund return target providing a return on investment of 276x.

Fred Soneya - Co-Founder & Partner

Fred was responsible for a number of high profile, large-scale innovation projects across one of the UK’s largest e-commerce businesses Kiddicare.com and post-acquisition, supermarket giant Morrisons. 


Fred created award-winning, digital customer experiences bridging the online-offline gap in one of the UK’s largest grocers, Morrisons. This included the launch of browse and order points, mobile payments and electronic shelf edge labels powered by early stage technology companies.


To achieve this Fred worked with cutting edge, early stage technology start-ups to integrate and piece together award-winning customer experiences.


Co-founding Haatch in 2013, Fred supports the investment process end-to-end and works with portfolio businesses in advisory and board roles.

Simon Penson - Partner

Building a bootstrapped business is never an easy process, particularly when your sector focus is B2B and where people are the only asset, but that is exactly what Simon had done with Zazzle Media


The digital marketing agency grew from nothing to delivering an EBIT north of £1 million in just under 6 years before being sold into one of the world’s biggest advertising holding companies (IPG).


As a result of that journey, he is now seen as one of the most prominent minds in digital marketing and is regularly asked to speak and write about cutting edge digital growth both in the UK and around the world.


His real-world experience in people management, building profitable start-ups and marketing make him an extremely valuable member of the central team.


Simon left IPG in September 2019 to focus on investments and Haatch full-time.

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Fee summary

Establishment Costs & Management Fees

The Investment Manager will charge a simple investor fee model which covers initial setup costs, onboarding costs and annual costs in a one-off 10% fee net of investment. This means a £100k investment would enable £90k of investor funds to be invested directly into Qualifying Companies and eliminating any ongoing cost to an Investor – for the avoidance of doubt there is no on-going annual management charge.


This approach was taken to eliminate on-going costs to investors which in traditional funds compound over many years in some cases into large double-digit % charges.


Performance Fees

The Investment Manager will receive 25% of the net profit achieved on any returns between 1x-5x ROI and 30% of the net profit achieved on any returns equal to or over 5x ROI.