The latest equity investment deals in Welsh business

Here we feature the latest equity deal investment deals and news in Welsh business.

A fintech start-up, providing an AI-based credit scoring service to people without a credit history or those looking to secure small loans, including for SMEs, has relocated to Cardiff on the back of its third equity investment round as it looks to expand.

Investors backing the round into Agam, the value of which hasn’t been disclosed, include the Development Bank of Wales.

The company, which currently employs 20 in the ��Ƶ and Bangladesh, has relocated from London to the Welsh capital.

Set up to 2019 by its chief executive, Shabnam Wazed, it has undertaken a pilot of its platform in Bangladesh with Prime Bank, one of the country’s leading private and commercial banks.

Recently Agam, which means advance in Bangla, announced a first of a kind partnership with Bangladesh’s inaugural digital-only microfinance provider, SBK Foundation, to give entrepreneurs and gig economy workers access to loans.

Agam is looking to further scale its operations, including applying the approach in other markets, with India identified as the next market.

Ms Wazed, 30, said: “We are delighted to have attracted the backing of a range of international investors from ��Ƶ, EU, US, and Asia. This funding will enable us to accelerate our mission, both in terms of developing the technology which underpins the platform, facilitating new commercial partnerships, and by entering new markets following the successful deployment in Bangladesh.”

Jack Christopher of the Development Bank of Wales said:“Agam is exactly the type of fintech firm we want to work with, and we are especially pleased to see them take root in the Welsh tech system – which is an ideal fit for their aspirations and operations.

“Agam is already seeing a positive impact in Bangladesh and can do the same for other countries in the future. It’s a great example of investors seeking to generate returns on their investments while also fulfilling their environmental, social and governance obligations. We are looking forward to the journey ahead with Agam and its founder Shabnam Wazed.”

Driverly

Cardiff-based subscription-based car insurance fintech, Driverly, has been boosted with a significant six-figure pre-seed investment round.

The Development Bank of Wales has invested £250,000 in equity into the start-up as part of a £525,000 pre-seed investment round that also involved serial entrepreneur Manuel Santiago as an angel investor, and Duncan Russell, a former chief finance office at Admiral Financial Services.

Driverly’s service tracks users’ driving, with new subscribers downloading the Driverly app and taking an initial test drive to provide data on their driving habits.

It then offers users a price for their insurance based on the app’s assessment of their driving, with the subscription price locked in for the first three months.

Driverly continues to monitor the customers’ driving behaviour throughout their policy term, and adjusts prices based on this behaviour and market conditions. There are no additional fees for customers, including cancellation fees.

As well as basing costs directly on customers’ driving, Driverly also rewards good drivers with digital “acorns” as part of its rewards programme, which they can convert into vouchers or discounts.

The service has already proven popular with younger or new drivers, who normally face much higher car insurance costs than other age groups.

Armin Kia, co-founder and chief executive of Driverly and former head of business planning and development at Admiral Financial Services – part of FTSE 100 Admiral Group – said: “We’re really glad to have been supported by the Development Bank of Wales, which will help us to further develop our technology and enter the car insurance market on a strong footing.

“Car insurance is a cost which all drivers have to face, but our approach to insurance gives drivers – particularly new or younger drivers – the flexibility they need as their living costs have increased everywhere else. Our monthly policy affords these customers flexibility, with the guarantee of zero fees.

“We look forward to getting our app and our service to more and more users, and are very grateful for the development Bank’s support.”

Jack Christopher, assistant investment executive at the Development Bank, said: “We’re impressed with Driverly’s disruptive approach to car insurance. Their behaviour and performance-centric approach is disrupting the normal top-down method, which dictates how much drivers should pay based on factors like demographics or location.

“Driverly is among a number of thriving Welsh fintech companies we have been pleased to support with pre-seed investment, and we look forward to being a part of their journey."

The Kingsward Group

Young entrepreneur Will Kinder has been appointed managing director of the Kingsward Group following a management buy-in that has enabled the founding directors to retire.

Margaret and Alan Keetch have sold the Ferndale-based metal fabrication business that they established in 1990 to 32 year old Mr Kinder, previously a director of engineering company Aluqo which is a customer of the Kingsward Group. Funding for the management buy-in was provided by the Development Bank of Wales with a mix of debt and equity alongside the growth and working capital provider, Growth Lending.

Employing 25 people on the Oaklands Business Park in Ferndale, The Kingsward Group incorporates three separate businesses specialising in tube bending and welding, laser cutting and powder coating. Key markets include office furniture and retail.

As managing director, Mr Kinder is being supported by Jason Keetch who is staying with the business as operations director. The development bank has then appointed experienced non-executive director Mark Pulman as chair of Kingsward with David Pearce of SME Finance Partners taking the position of finance director.

Mr Kinder said: “With a background in engineering and manufacturing, I understand the importance of high quality production and processes. Having known Kingsward as a customer, I know just how well-respected the business is as a local employer with excellent standards.

“Margaret and Alan have built a solid business but the time is now right for them to realise the value of all of their hard work over the years and for me to work with the team to realise the future potential.

“We’ve got a loyal and long-standing workforce who have made the business what it is today. We also have a customer base that wants to work with local supply chain partners to help boost the local economy and reduce carbon footprint. We’ve therefore got a great opportunity for growth by maintaining quality but expanding in to new markets.

“With the continued support of Jason as Operations Director, the Development Bank as our investment partners, Mark as chair and David taking care of the finances, we’ve got a winning team. Indeed, I’ve quickly realised the value of having such great people on my side – as a young entrepreneur, it’s given me real confidence as I focus on the long-term sustainable success of Kingsward.”

Emily Jones and Ashley Jones, investment executives with the Development Bank of Wales said: “At just 32, Will is one of the youngest entrepreneurs that we have supported with a management buy-in to date. He has built a successful career and has the drive to deliver on his vision for the Kingsward Group as a well-established engineering business with the support of an excellent team around him.

"With a mix of debt and equity, we’ve been able to facilitate a management buy-in that retains this specialist engineering business in the local area and safeguards jobs with flexible and affordable finance. We look forward to working with Will in his new role.”

Klevin Thomas, principal at Growth Lending said: “It is good to work in collaboration with the Development Bank of Wales to support a local business with growth potential. Recognising a strong proposition and how appropriate investment can take it to the next level is exactly what Growth Lending is all about, so we are pleased to support Kingsward as it continues on its growth journey.”

GS Verde advised Mr Kinder on the purchase and Capital Law acted for the Development Bank of Wales.

Jellagen

Biotech firm Jellagen, which extracts collagen from jellyfish, has raised £8.7m in a series A equity investment round.

The Cardiff-based Jellagen has secured investment from the Cardiff Capital Region (CCR), the Development Bank of Wales, and the Thai Union Group PCL.

The Development Bank of Wales invested £1.2m in equity, while the Cardiff Capital Region, through its City Deal, backed the investment round with £2m with the aim of building medical device expertise in south Wales and growing the sector in the region.

Thai Union Group PCL also invested an undisclosed figure in Jellagen via its Corporate Venture Capital Fund. The group is one of the world’s leading seafood companies and one of the largest producers of shelf-stable tuna products owning British household brand, John West.

The funding round will enable Jellagen to reach a major milestone in providing safety data generation and prototype validation on its leading soft-tissue healing program, bringing it closer human trials of using collagen derived from jellyfish to help heal human organs.

Most collagen used in treatments comes from mammals such as pigs, cows and rats, which can increase the risk of diseases or viruses when used in humans. The jellyfish-sourced collagen – also known as Collagen Type 0 – used by Jellagen has shown improved results in tests when compared to mammal-sourced collagen in preclinical testing.

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The Cardiff firm has established development collaborations with top research organisations including the Mayo Clinic in the US and Europe to investigate and corroborate these findings.

Jellagen chief executive Thomas-Paul Descamps said: "It is a great achievement and a major step to have secured this pivotal Series A round in such a challenging economic environment. I want first to thank our new investors and our existing shareholders for their trust in the incredible potential of the Jellagen technology platform.

“Cardiff Capital Region City Deal and the Development Bank of Wales are providing us with a unique local Welsh ecosystem to support the growth of Jellagen as a future global medical devices and biomaterial leader based in Wales. In addition, the investment of Thai Union is a game-changer in securing Jellagen sourcing and enabling future manufacturing scaleup.

Combining the immense possibilities of our Collagen Type 0 with this enlarged investor base will help unleash the considerable potential of the Jellagen technology platform.”

Mark Bowman, deputy fund manager at the Development Bank of Wales, said: “We’re hugely pleased to have backed Jellagen as part of this funding round.

“Wales is host to a number of pioneering biotech companies and we were pleased to join the Cardiff Capital Region City Deal in supporting Jellagen – our combined backing will allow us to grow a sector which is already strong in the region, and strengthens Wales’ position as host to a thriving medical sciences sector.”

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