Funding

SIS Ventures

Scottish impact investor SIS Ventures has secured £1m in funding for its Impact First investment fund.

Impact First launched its second round of fundraising in February this year with the aim of attracting up to £5m to scale up its mission-led investment in early-stage Scottish businesses.

SIS Ventures’ fund provides an opportunity for investors to make tax-efficient financial returns alongside impact returns by investing equity into Scotland-based businesses whose social and environmental aims are aligned to the United Nations Sustainable Development Goals (UN SDGs).

The latest funding was provided by Chroma Ventures, the investment arm of video game development studio 4J Studios.

Chris van der Kuyl, principal of Chroma Ventures, said: “Since our first investment in 2019, we’ve been impressed by SIS Ventures’ expertise and ability to identify opportunities in companies that will make a significant, positive difference in people’s lives.

“SIS Ventures’ ambition and approach complements our desire to invest in exceptional leaders and teams, which is why we have chosen to enhance our support through their Impact First fund.”

SIS Ventures has already invested around £3.5m into ten high impact and high growth potential businesses.

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Carcinotech

Leading Scottish investors have provided £1.6m of funding for life sciences company Carcinotech.

The Roslin-based MedTech specialist manufactures 3D-printed tumours developed from cancer stem cells, primary cells, and established cell lines. The tumours can then be used as part of clinical trials to discover drugs faster and more ethically than traditional methods.

The new funding will help the company accelerate commercialisation and expand into international markets.

TRICAPITAL led the investment round, succeeding initial seed round leader Gabriel Investments, alongside Eos Advisory, SIS Ventures, Gabriel, Alba Equity, and Scottish Enterprise.

Carcinotech CEO and founder Ishani Malhotra said the company will be looking to extend its commercial partnerships in Europe and North America over the next twelve months.

“Our next phase of growth will involve building international partnerships, growing the team, and appointing a scientific advisory committee to support the work of the main board,” she said.

“Carcinotech’s in vitro models are very close to clinical biopsy samples because we use patient-specific cells and isolated cells from biopsies, which allow us to develop models representing cancer heterogeneity.”

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Munro Vehicles

Munro Vehicles‘ goal of producing the UK’s first fully electric 4×4 has received a substantial boost following fresh investment of £750,000.

Decarbonisation, sustainability and social impact investor Elbow Beach Capital provided the funds, believing a considerable opportunity exists to decarbonise vehicle fleets within mining, forestry and agriculture industries, where over 220,000 farms and 2,000 active mines in the UK alone are relying on all-terrain vehicles to carry out daily operations.

Munro will deploy the proceeds of this round to hire key personnel, develop its order book and grow its sales network while building, testing and upgrading a “production intent” prototype vehicle.

Further funds will be raised later this year to scale the production line, recruit assembly staff and complete first deliveries of pre-ordered vehicles.

“We’re very excited to have Elbow Beach Capital’s support, particularly as we feel that their passion and enthusiasm matches our own,” said Russ Peterson, CEO of Munro.

He added: “This investment is beneficial for the local economy and will allow us to source as many of our parts from within the UK as possible, cutting down on carbon emissions from shipping.

“We have a huge job ahead of us to take the Mark 1 to production but with Elbow Beach’s backing we feel empowered to make it happen.”

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Scottish Government

The Scottish Government has launched a new fund to help develop emerging CO2 utilisation technology.

The CO2 Utilisation Challenge Fund will help businesses and organisations develop and commercialise the technology, which involves harnessing and converting CO2 – the biggest contributor to climate change emissions – and using it to produce valuable products such as synthetic fuels and proteins for use in aquaculture.

In addition, the CO2 Utilisation Challenge Fund will be administered by Scottish Enterprise and match-funded by industry, meaning over £10 million could be invested in the initiative over its two-year lifetime.

Net Zero and Energy Secretary Michael Matheson said: “The Scottish Government is fully committed to helping Scotland become a net zero economy. The IPCC’s latest reports show that the impacts of climate change are even worse than previously thought and that business as usual is not an option.

“We know that, in order to deliver on our targets, we must develop and grow innovative technologies like carbon capture and utilisation, alongside carbon capture and storage.

“Promising early work around potential uses for captured CO2 shows that CO2 utilisation has real potential to help develop a circular economy while providing opportunities for our workforces and economic benefits for a range of different sectors.”

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Rooser

Scottish fishtech startup Rooser has gained backing by Index Ventures, Google Ventures and Point Nine Capital to boost its online platform.

The cloud-based platform can be used to trade seafood between buyers and suppliers with the aim of reducing wastage and increasing margins.

Fish traders can upload and manage their own online store, allowing them to sell to existing customers or search new markets. Buyers can filter by species, fishing area, method, delivery time and quality.

Rooser will use the new funding to scale its trading platform and build its marketplace, as well as developing its stock management software for primary processors, quality controls, supply chain financing and personalised features.

Commenting on the funding, Joel Watt, chief executive at Rooser said: “The seafood industry is like this giant machine, with all these gears turning all the time at breakneck speed; I saw the chaos for myself.

“Rooser was what we hacked together to solve the problem for our factory, and we realised the opportunity when other processors started wanting the software for themselves – in the long run, what we’re building should help us to understand and manage global fish stocks more responsibly, to see where our seafood comes from and to ensure the best-quality produce ends up on our plates.”

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Deals and Acquisitions

Truststream

Edinburgh-based cybersecurity firm Truststream has been acquired in a deal worth up to £8.5m.

SysGroup, a managed IT services, cybersecurity and cloud hosting provider based in Liverpool has acquired the firm for an initial cash consideration of £4.8m, with a maximum earn out consideration of up to £3m over an additional 24-month period.

The acquisition has been funded from the group’s existing cash resources, supported by an £8m revolving credit facility provided by Santander.

In a statement, SysGroup said Truststream’s “comprehensive security offering” will significantly enhance the firm’s service offering.

Commenting on the deal, SysGroup CEO Adam Binks said: “I am delighted to announce the acquisition of Truststream. The addition of Truststream to the group further supports our stated strategy to become the leading provider of managed IT services to the UK mid-market.

“The business strongly complements our existing portfolio of services and has high levels of recurring revenue. I’m excited to welcome the Truststream team and look forward to working with them all as part of the enlarged group.”

Our full story has more.

RGB Solutions and incovo

One of Scotland’s leading IT and telecoms companies, incovo, has announced the acquisition of Edinburgh-based IT services provider RGB Solutions.

The move will help cement incovo’s position in Scotland’s IT services market, boosting the group’s turnover by an extra £700,000.

In addition, five new team members and 97 clients will come under incovo’s wing, with RGB Solutions’ established Edinburgh office remaining, bolstering incovo’s presence across Scotland’s Central Belt.

The acquisition will marry together RGB Solutions’ specialist expertise in cybersecurity, IT support and consultancy, and incovo’s long-standing reputation for managed print, connectivity, and cloud telecommunications.

Speaking about the acquisition incovo CEO Chris Thomas said: “incovo has undergone considerable changes in the past 20 years as it has grown and evolved in response to the ever-changing technological landscape.

“Demand for our IT services in particular has increased dramatically as a result of increasingly sophisticated cybersecurity threats. By acquiring RGB Solutions and introducing our leadership team and global technology partners, we can continue the positive trajectory that RGB Solutions is moving in and begin yet another exciting chapter in the incovo story”.

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Calnex Solutions

Linlithgow-headquartered Calnex Solutions – provider of test and measurement solutions for the global telecommunications sector, announced the acquisition of iTrinegy, a developer of software defined test networks technology in a deal worth £2.5m.

The consideration, calculated on a cash-free, debt-free basis, is £2.5m in cash on completion with up to a further £1m dependent on achievement of agreed financial targets.

iTrinegy generated revenues of approximately £1.4m in the year to 30 September 2021, with a gross margin of around 80%. Approximately 60% of iTrinegy’s revenue was from North American customers.

Tommy Cook, Founder and CEO of Calnex, said: “We are delighted to welcome the iTrinegy team to Calnex. With both businesses developing high quality, complex, technical testing solutions, trusted by some of the world’s most demanding organisations, we are particularly excited by the strategic fit of the two organisations.

“The cloud migration taking place across multiple sectors and the growth in internet-based applications is fuelling demand for test solutions that can analyse, predict and verify application performance over complex, distributed networks.

“We see great opportunity ahead for the NE-ONE technology and look forward to working together to accelerate iTrinegy’s growth and open up new customer segments for Calnex.”

Kynos Therapeutics

Kynos Therapeutics, a spinout from Edinburgh University, has secured £9m of funding to move its research into Phase 1 clinical trials.

The company’s £6.5m initial venture financing round was led by Epidarex Capital and joined by IP Group and Scottish Enterprise. It also received £2.5m through a grant from Innovate UK to fund its first in-human clinical trial.

Kynos Therapeutics will use the funding to build out its core team and fund preclinical indication expansion studies, running in parallel with the clinical trial.

Kynos’ Chief Executive Damian Mole, a professor of surgery at the University of Edinburgh Centre for Inflammation Research, said: “Our goal is to improve health and make a positive impact for patients, by developing our programme in the therapeutic area of inflammation and immunometabolism.

“Our programmes are based on extensive industry collaborative research with a robust science base supported by multiple high impact publications – there are no approved or marketed medicines for our gateway indication, for which there is a significant unmet need.”