Mercia EIS Fund

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Mercia’s EIS Funds have an investment-led venture capital strategy, investing nationally with a focus on the underserved regions; specialising in the identification, creation, funding and scaling of innovative technology businesses with high growth potential, creating a strong investment proposition.

  • £25,000
    Min. Investment
  • Technology
    Sector
  • EIS
    Fund Type
  • Evergreen
    Closing Date

Summary

Mercia has an Investment Team of industry specialists with venture capital expertise, working extensively with portfolio companies to scale each business with the aim of ultimately delivering shareholder returns.

Mercia can fund companies with different pools of capital, initially via its own EIS Funds or other third-party funds, and then selectively using Mercia’s proprietary capital. Mercia is therefore able to provide a ‘Complete Capital Solution’ for entrepreneurs and small companies, starting from seed rounds of £100,000, larger rounds of up to £2.0million, and building to funding rounds of £10.0million.

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Highlights

  • Sustained Deal Flow - the consistency in both value and volume of Mercia's deal flow is hugely supported by deep relationships and networks in each region.
  • Diversified Portfolio - consisting of approximately 15 EIS qualifying technology companies.
  • Advance Assurance - will be sought from the HMRC for each investment.
  • Proactive, specialist asset manager providing capital to regional SMEs (96% invested outside of London).
  • Eight offices across the UK with 90 investment staff and 19 university partnerships.
  • The Mercia Group has a substantial track record of delivering realisations from early-stage technology companies.
  • This EIS fund is managed by a team that has seeded unicorns, and delivered some very high multiple returns to investors (26x Allinea, ~100x BluePrism)

Financial overview

Past Performance

Mercia EIS aims to triple invested capital after seven years, by the creation of a well-diversified, multi-sector technology fund.

Mercia has previously raised ten tax-efficient funds. For funds invested for over a year, the average Net Asset Value of our EIS funds is 1.7x (2.0x including tax reliefs), and one fund achieving their 3x target in 3.5 years (MGF2).

Due to the stage at which Mercia invests, investors should expect a third of EIS companies in any portfolio to fail (EIS loss relief limits the downside), but the successes are likely to deliver high-multiples.  

The fund is focused on EIS, but there is an option to allocate to SEIS investments: The Mercia Group operates our Complete Capital Solutions for entrepreneurs, with the potential to fund all stages of company growth. Mercia has invested in 73 companies across their tax-efficient funds, some of which have received SEIS investment and there may be an opportunity to invest in SEIS companies.

Investment strategy

The Mercia Model

Mercia is a national investment group focused on the funding and scaling of innovative technology businesses with high growth potential from the UK regions. Portfolio companies in Mercia EIS may benefit from strategic follow-on investment from Mercia Technologies PLC.

There are various important elements:


1. Investment strategy

The Mercia EIS Fund aims to triple invested capital within five to seven years, including tax reliefs, by investing in a well-diversified early-stage, multi-sector technology fund. In order to achieve this, we expect one third of companies to fail, and one third to achieve over 3x. Mercia’s EIS investments are focused on the undeserved geographical regions of the UK, investing in sectors in which we have deep expertise.


2. The Complete Capital Solution

Mercia’s model provides a single investment partner for technology businesses. The model combines third party managed funds with the potential for direct investment via Mercia Technologies PLC, which supports businesses at a later stage to drive growth and enhance value.


3. Sector focus

Mercia’s investment team has a unique, strong blend of venture capital skills and significant operational experience. It is formed of entrepreneurs and business builders, all of whom have specialist knowledge in high- growth technology sectors. Mercia’s four key sectors are:


•    Electronics, Materials, Manufacturing & Engineering

•    Life Sciences & Biosciences

•    Software & the Internet

•    Digital & Digital Entertainment


4. Geographic focus

Mercia is a national investor with a focus on the UK regions where the team believes it can find better value than in the competitive landscape of the South East. Mercia now has eight offices in the UK regions surrounded by a network of university partnerships, providing enviable dealflow.


5. Investor services

Mercia has an online Investor Centre, through which most of its investor services are available. Mercia provides timely and consistent communication, ensuring that all relevant documents, including regular valuations, are available. In addition, Mercia’s Share Exchange may provide an option of early liquidity for investors.

Key team

Dr Nicola Broughton - Investment Director, Head of Universities

Nicola leads a team of university specialists which cover Mercia’s 19 partnerships. The team are actively sourcing new university spinouts across all of our sectors at the early stage, as well as being responsible for managing a portfolio of spin-out companies.

Dr Alistair Forbes - Invstment Director Head of Software & the Internet

Alistair joined the Group in 2017 and leads the Software & the Internet Investment Team, which focuses on investments in artificial intelligence, cyber security, marketing technology and software as a service.

Dr Mark Volanthen - Investment Director, Head of Electronics, Materials, Manufacturing & Engineering

Mark heads the Electronics, Materials, Manufacturing & Engineering sector and has over 20 years' experience in this area of expertise. He supports existing portfolio companies with their operation and growth, whilst also sourcing new investments.

Documents

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The content above has been provided by Mercia Fund Management Ltd who are authorised and regulated by the Financial Conduct Authority under firm registration number 524856.