Par Equity, the Edinburgh-based venture capital firm, has closed five investments worth £4.85m in just two days. The firm was lead investor and partnered with the Scottish Investment Bank on all five deals.
The trades included one new investment and four follow-ons. New to Par Equity’s portfolio is Amiqus, a software company based in Edinburgh that offers an encrypted online tool to automate anti-money laundering and compliance checks. Clients include HR and recruitment agencies alongside a host of professional services firms.
Paul Munn, Partner at Par Equity said: “Our interest in Amiqus started as clients rather than investors. But there’s nothing like being a customer to see if something helps or not. From there, we appreciated that it already had significant commercial traction and a highly competent leadership team, so the investment made complete sense.”
Of the four follow-on investments three were in hardware companies: Adaptix, a company headquartered in Oxford with facilities in Newhouse, Scotland that produces 3D X-Ray machines, Edinburgh-based Greengage, a company that makes wavelength-tunable lamps and sensors which improve livestock welfare and drive production efficiencies, and Edinburgh-based Uniklasers, a company that makes high-performance lasers used from film-making to life sciences.
Munn said: “Something that differentiates us from other backers is we aren’t afraid of investing in technology that – as we say – hurts if you drop it on your foot. Hardware companies tend to be longer-term investments and often require ongoing funding. One of the dangers of smaller backers is that they run out of firepower, but we don’t, and our strong relationship with the Scottish Investment Bank means we can draw in extra resources to help these businesses gain traction.
“The breadth of expertise in our investor network – the Par Syndicate – also makes these kinds of investments more straightforward.”
The fourth follow-on investment, Edinburgh-based Red61, is a software company that has designed a ticketing system. The company counts the Edinburgh Fringe Festival among its clients, having originally custom-built its technology to accommodate the 50,000 performances in 300 venues that take place over the three-week festival.
Of the total £4.85m invested at the end of December, over £2.5m was directly co-ordinated by Par Equity through its investor network the Par Syndicate, the Par EIS fund and the Scottish Investment Bank. Further investments of more than £2.2m came from other sources.
Par Equity Portfolio Manager, Graeme Mckinstry, said: “The investments in each of our follow-on companies reflect not only our persistence and consistency when it comes to financing their growth, but also the success of our initial due diligence.”
“It’s not uncommon in the industry to see backers handing over the cash and then moving onto the next big thing, and unsurprisingly a lot of those businesses fail. It’s precisely because we offer long-term support, both financially and at management level, that we get these repeat investment opportunities and have such strong deal flow.”
Kerry Sharp, director of the Scottish Investment Bank, said: “We were involved in investing alongside Par Equity in all of these companies, two of which are new to our investment portfolio and strengthen both our investment relationship with Par and the number of exciting opportunities for companies. All of these investments have solid business strategies and high growth potential, which is good for the Scottish economy and broadens the capabilities of the country’s business base. To fulfil that potential, they need capital. Working in tandem with venture capital businesses like Par Equity we are helping to make sure these great companies secure the funding they need and the expert mentoring and advice that will help them really take off.”