MMC Ventures has won a competitive tender to launch the MMC London Fund. The new 11 million pounds ($16.8 million) fund is specifically focused on investment in London businesses. The London Fund will co-invest alongside other venture capital firms, business angels and other MMC funds – and is partly financed by a grant from the European Regional Development Fund, managed in London by the Mayor of London, and SME Wholesale Finance Ltd.
MMC Ventures, the award-winning fund manager and investor, has won a competitive tender to launch the MMC London Fund. The new £11m fund is specifically focused on investment in London businesses – and as it is a matching fund, at least £22m will actually be invested in the Capital as a result. The London Fund will co-invest alongside other venture capital firms, business angels and other MMC funds – and is partly financed by a grant from the European Regional Development Fund, managed in London by the Mayor of London, and SME Wholesale Finance Ltd.
MMC is also delighted to announce that it has already completed 5 investments from the new Fund into exciting, fast-growing London SMEs, including Masabi, LoveHomeSwap and MBA & Company. The remaining 2 will shortly be announced.
MMC Ventures is one of the most active venture capital investors in the £0.5m-£2m equity gap market, managing several funds including an open EIS fund. In 2012, MMC invested in 6 new companies and provided add-on capital to a further 7 portfolio companies, and was listed as the third most active venture investor in the UK by both Ascendant and UKFunders.
The MMC London Fund seeks to provide funding for early stage businesses that can generate significant levels of economic growth and create jobs. It has been set up to invest in London’s most important strategic business sectors, as defined by the Mayor’s Economic Development Strategy: financial services; creative industries; the ‘digital economy’; leisure; education; and healthcare. In addition, the portfolio must meet certain equality and sustainability objectives, and be sought from across a broad cross-section of SMEs throughout London’s 33 boroughs, with a portion of the fund focused on more deprived boroughs including Hackney and Tower Hamlets.
Bruce Macfarlane, Managing Partner at MMC Ventures, said, “Last year was our busiest ever and 2013 looks set to continue that active investment rate; we have already invested the new London Fund in 5 companies. MMC specialises in sectors where the UK is a world leader and we are so fortunate in London to be the world centre of so many dynamic industries. We’re looking to back entrepreneurs who will be leaders in their industries and London is brimming with talent.”
The Mayor, Boris Johnson, said, “London’s small to medium companies are a vital component of this city’s economy, supporting significant numbers of jobs. It is a top priority for me that these entrepreneurial enterprises receive practical support to thrive and grow, not least as many have the potential to become major employers in the future. This innovative equity fund is using public and private money in order to offer much needed financing when more traditional routes are not available.”
The Deputy Mayor for Business and Enterprise, Kit Malthouse, who will launch the fund at a City Hall event later today, said, “We’ve listened to London’s small business owners and know that getting access to finance can be challenging. The MMC London Fund will invest money to support fast growing businesses today, using returns from the investments to support even more companies in the future. This is a win-win for all involved.”
Maggie Rodriguez-Piza, Chief Executive, SME Wholesale Finance (London) Ltd, said, “It’s well documented that there is a persistent ‘funding gap’ where the private sector is reluctant to invest in early stage, and therefore more risky, businesses. We believe that the best way to forward is via public/private sector co-operation. I am very pleased to be working with MMC Ventures, who presented the most compelling tender, to bring the MMC London Fund to life.”
Founded in 2000, MMC Ventures is an active investor and award-winning venture fund manager, focused on technology-enabled sectors where the UK is a world leader -particularly financial and business services, business software, digital media and e-commerce. With circa £100 million under management, MMC invests £10–15 million per annum in a combination of new investments and add-on capital for existing portfolio companies. MMC specialises in fast-growth early-stage businesses, partnering with entrepreneurs and impressive management teams to achieve substantial scale and profitability.
MMC’s existing portfolio includes AlexandAlexa, Base79, Interactive Investor, Knowledge Mill, LoveHomeSwap, Reevoo, The Practice, NewVoiceMedia, Tyres on the Drive, Masabi, Consilium, Safeguard, Creativity, iJento, Neoss, Breathing Buildings and Small World.
More information about MMC Ventures is available at www.mmcventures.com
Mayor of London
The MMC London Fund is part financed by the London European Regional Development Fund. The Greater London Authority is the managing agent for the European Regional Development Fund Programme, which is one of the funds established by the European Union to help local areas stimulate their economic development by investing in projects which will support local businesses and create jobs. MMC Ventures won a competitive tender to launch the MMC London Fund. The new £11m fund is specifically focused on investment in London businesses – and as it is a matching fund, at least £22m will be invested in the capital as a result. The new London Fund will co-invest alongside other venture capital firms, business angels and other MMC funds.
The fund will be administered by SME Wholesale Finance Limited (SMEWFL) and delivered by MMC Ventures. SMEWFL was established by the London Development Agency using public money to address the market gap where viable SMEs are unsuccessful in accessing finance. Typically, accessing equity finance up to £2-5m can prove hard for SMEs. The fund consists of £6m from the European Regional Development Fund (allocated to City Hall for distribution) and £4m of returns from the SMEWFL.
SME Wholesale Finance (London) Ltd
SME Wholesale Finance was established in 2004 with the specific objective to carry out activities in support of the Mayor of London’s Economic Development Strategy. Since its inception, SME Wholesale Finance has established and delivered seven distinct funds to assist SME’s with viable propositions to obtain the finance they need to start, grow and succeed. Through its funds, SME Wholesale Finance has provided finance for 384 SMEs; have supported the creation of 780 jobs; and have safeguarded a further 1,241 jobs. SME Wholesale Finance has an “evergreen” funding strategy whereby returns generate from its funds are reinvested into London’s SMEs.