The British Robotics Scale-Up Fund is set to deploy a new round of funding aimed at accelerating the growth of ten high-potential businesses that are developing productivity-boosting technologies, particularly in the fields of robotics, artificial intelligence, and automation.
This fund will make investments under the tax-advantaged Enterprise Investment Scheme (EIS), which helps mitigate risks for investors supporting young, high-potential businesses. It also seeks to diversify its portfolio across various sectors to further reduce risk for investors. Specifically, the fund will invest in companies that qualify as “Knowledge Intensive,” allowing them to raise larger amounts of capital for longer periods compared to traditional EIS-qualifying companies. This provides advantages to investors, as it enables greater investments under EIS and can lead to rapid value growth during the scale-up phase.
Over the past eight years, the British Robotics funds have invested in 40 companies, supporting entrepreneurs in creating technologies that enhance productivity, particularly in robotics, AI, and automation. The fund will continue to focus on these technologies and capitalise on global trends such as skilled labor shortages, the shift away from fossil fuels, supply chain inefficiencies, and the depletion of natural resources.
Investors can subscribe between £10,000 and £2,000,000 into the fund each year, provided that all investments go to “Knowledge Intensive” EIS-qualifying companies. This allows investors to offset at least 30% of their investment against their tax bill, in addition to potential future tax benefits.
Companies such as Chemastery, RAD Propulsion, Altered Carbon, Zelim, and BladeBUG are expected to benefit from this deployment.
Dominic Keen, Managing Partner of Britbots, commented, “Robotics, applied artificial intelligence and automation will become increasingly important as an antidote to global productivity stagnation and skilled labour shortages. We’re looking forward to backing world-class talent to address these problems and deliver out-sized returns to investors.”
Boyd Carson of Sapphire Capital Partners added, “The British Robotics Scale-Up Fund represents an opportunity for investors to take advantage of the large investment limit of the EIS Knowledge Intensive scheme while benefiting from a unique, compelling investment thesis.”
Footnotes: [1] Knowledge Intensive status was introduced as an addition to the Enterprise Investment Scheme by HMRC in 2017.
[2] Knowledge Intensive qualifying companies can raise up to £20 million of tax-advantaged investments over their lifetime (as opposed to the standard limit of £12 million). Furthermore, they can raise these funds over a ten-year period (rather than the standard limit of seven years).
[3] Each company expects to be classified as Knowledge Intensive, but compliance is not guaranteed.
IMPORTANT INFORMATION
Investing in start-ups and early-stage companies involves risks, including illiquidity, lack of dividends, loss of investment, and dilution. It should be done only as part of a diversified portfolio. There is no assurance that the investment objectives of any investment opportunity will be achieved or that the strategies and methods described herein will be successful. Past performance is not necessarily a guide to future performance, and the value of an investment may go down as well as up.
The investments discussed are targeted exclusively at investors who understand the risks of investing in early-stage businesses and can make their own investment decisions. Any pitches for investment are not offers to the public, and investments can only be made through Sapphire Capital Partners LLP as the fund manager and on the basis of information contained in the information memorandum, which is available on request.
