As I See It
ADV is a big plus, but can it make a difference?
Accelerated Digital Ventures (ADV) has set an ambitious target of aiming to fund all stages of development, from entry to exit.
The platform is funded by three institutional heavyweights. The British Business Bank will provide a third of the capital with Legal & General (L&G) and Woodford Investment Management providing the remainder.
It will target companies in cities regarded as digital technology hubs, including Belfast, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, London, Manchester, Newcastle, Oxford and Sheffield.
ADV will invest in accelerators and incubators and provide, growth stage (Series A), and late stage (Series B, C and beyond) finance.
ADV’s long-term aim is to invest upwards of £200m every year into UK-based start-ups and scale-ups.
Among its participant incubators is Codebase in Edinburgh, whose chief executive Jamie Coleman (pictured below), has pushed for greater access to funding support from venture platforms. He has urged the Scottish government to cease its scattergun approach to business support and hand over its funds to a new generation of venture firms who would then employ their expertise to allocate the money.
It seems he’s getting his new fund, although ADV is entirely private sector funded – and that’s a good sign as it represents risk capital that will be properly targeted. Other partners include venture capital firm Northstar Ventures and corporate advisor Numis Securities.
Whether £200m will be enough to support a significant number of firms through scale-up and exit will only be determined over the next few years. Bear in mind that FanDuel alone raised $416 million (£330m) in seven funding rounds from 19 investors in just under a decade.
This, of course, may be at the extreme and many firms will grow sufficiently on a fraction of this sum.
The statement issued by the group involved gives no target, except to couch its ambitions in colourful and unnecessary hyperbole. It describes ADV as “a meritocratic investment platform that offers access to capital, coaching, customers and corporates; a platform that champions the innovators.
“It seeks to help build the large ‘difficult’ businesses that the UK is uniquely positioned to foster: the complex, technical, global ones that have a chance of solving real world problems.”
It is unclear why it considers the UK to be “uniquely positioned” when it is often playing catch up with other digital capitals. However, that’s just PR spin.
Those reservations aside, the ADV plan is a positive development in sourcing funds for a sector with an insatiable appetite for capital. Those involved are blue chips with no record of throwing good money after bad. They are just the sort of institutions that many have long wanted to be part of funding economic growth.
In Edinburgh there have been questions about the cautionary approach of heavyweights like Standard Life and Widows to create a ‘city fund’ that would support the tech sector and therefore the city economy. Maybe this will encourage them to come on board.
The ADV looks like it might make a difference, especially as the team behind it is not short of talent. The other key players are:
- Keith Teare, chairman – founder of Easynet, RealNames, Archimedes Labs and co-founder of TechCrunch.
- Mike Dimelow, VP Investment – formerly VP of Strategic Business Development at ARM Ltd.
- David Carr, VP Finance and Operations – co-founder of Dotforge and CitiLogik, formerly SVP Access for AOL UK.
- Frank DiGiammarino, VP Ecosystem Development – formerly Director in the World Wide Public Sector Team at Amazon Web Services, and Deputy Director of the US Recovery Implementation Office which reported to US Vice President Biden.
- Andy Mulvenna, Investment Lead – founder of Brightpearl.
- David Fogel, Investment Lead – formerly Deputy Director and Head of Acceleration at Wayra UK.