OTEIS - The Development Fund
OTEIS – The Development Fund is a one-year technology fund that seeks to make full use of the tax advantages offered by EIS investment schemes by investing in companies which we know well through the OT(S)EIS – The Start-up Fund.
We have access to a steady stream of EIS investment opportunities because of our close and frequent involvement with so many developing companies. These are high growth potential companies which have made significant progress since our initial SEIS investment and will usually have overcome some unexpected obstacles.
Any investment in The Development Fund will be invested within one year in EIS investments which will mainly be follow-on investments in companies in which The Start-up Fund made the initial investment.
Usually, the OT(S)EIS Start-up Fund will be able to make an EIS investment, but by the rules of that fund, this will be only of the same amount as the earlier SEIS investment. In most cases, if the business is developing well, it will be wanting to raise larger sums. It is useful for the company and good for its investors if The Development Fund is also able to invest in these opportunities. This is usually to employ more people, to expand its sales force and to increase its marketing expenditure, now that the technology is working, and the first sales have been achieved. Therefore, the investment made by OTEIS will be expected to be slightly lower risk than the high-risk investment made by OT(S)EIS.
In the past, at the request of investors, we have been able to invest sums of £500k in 4-5 EIS investments in a matter of a few weeks, typically to meet a particular tax need. We cannot always do this, but often we can. At any one time, there are typically 5-6 of our investee companies seeking to raise funds for expansion with open fundraising in progress.
OTEIS - The Development Fund remains open for investment
The Information Memorandum and Application Pack can be downloaded here:
For further information about the EIS scheme, please consult HMRC's website.
If you would like any further information on OTEIS - The Development Fund or any company in our portfolio, please contact us.
The OTEIS fund will invest primarily in companies in the existing OT(S)EIS portfolio as well as in select companies from the OT VCT portfolios. As of July 2018, OTEIS - The Development Fund has made 24 investments in 13 companies, which are detailed below:
When doctors make use of long needles for taking biopsies or making deep injections, they have two main problems:
(1) The needles are difficult to see on ultrasound.
(2) Long thin needles often deflect and do not end up exactly where intended.
ANT’s active needle technology provides minute longitudinal ultrasound movement to the needle, this results in the needle being very bright on the ultrasound (from all directions) and the needle deflects much less. The ultrasound drive also has an additional benefit in that the amount of force required to insert the needle is much reduced. This could result in less pain upon insertion and less risk of overshoot – which is where a needle has difficulty piercing a tough layer but then slides too far.
ANT has identified biopsy needles as a market where all the advantages of the Active Needle come to bear, while the extra cost of the ultrasound driver will only have a small impact on the gross margin. The alternative products (without ultrasounds advantages) cost ~$200.
The technology was invented and initially developed by Dr Muhammad Sadiq at Dundee University. The company is being headed up by Ian Quirk who has been a design, regulatory and clinical development specialist in medical devices for over 20 years, most recently at LightPoint Medical.
In the next period the device will be developed sufficiently to be used in trials leading to CE marking and clinical use
Arago Biosciences is a spin-out from the University of Oxford – named after French Physicist and polymath François Arago - that has developed an optical technology able to determine the mass of individual molecules in the range from 40 kDa to >10 MDa (Daltons is another name for Atomic Mass Units). This range encompasses most proteins and assemblies of interest to medicine. The measurement can take place in solutions with a wide range of biologically relevant concentrations and is rapid, with only a few minutes being enough to collect high quality data.
Combat Medical develops and manufactures devices for the treatment of bladder cancers. Its device consists of a control unit and a disposable heat exchanger and catheter. These are used to deliver a treatment consisting of heating a chemotherapy liquid and circulating this through the bladder, rather than cutting out tumours in the bladder which is the current treatment. The standard treatment for bladder cancer results in up to 78% recurrence of tumours which then require increasingly drastic surgery. Combat’s treatment, called HIVEC (hyperthermic intra-vesical chemotherapy), reduces recurrence rates by up to 4 times. Thus far it has been used in combination with surgery, but it is also being investigated as a standalone treatment. It is also much less expensive, since the repeated surgery required to treat bladder cancer is extremely costly. Combat's devices are already CE marked and may therefore be used by doctors; the company is undertaking additional clinical trials to make it a standard of care. The hope is that the new treatment will in time become the most common treatment both in the UK and globally. If so, then the company will become very profitable and valuable.
A video describing the system can be seen here
The number of servers on the web has now passed the 1 bn figure. The founders of Dark Beam believe that only about 5% of the data held by these servers is indexed and searched by Google. At the bottom end, less than 1% is the so called dark web, encrypted and not accessible except to very few. And it is full of honey traps which is how many criminal gangs get caught. But in the middle is c. 90% plus which is not indexed - the 'deep web'. In most cases the sites on the deep web are intended not to be found so they have obscure web addresses and cannot easily be searched. It is on the deep web that many personal details surface, for example credit card numbers, bank details and passwords.
The Dark Beam founding team are experienced in the field with an average age in the 40’s. Steve Tyrens who worked for the UK security services for many years has an in depth understanding of how the deep web works. He has designed crawlers, believed to be the best available anywhere, which will scour the deep web searching for credit card numbers, passwords and other such data.
Dark Beam's, business model is to sell companies a contract for a monthly fee. Then if/when data belonging to this company is found, the company will be alerted and will be able to do something about it before too much damage is done. There have been many highly publicised instances of major companies losing millions of personal data records. On average it has been four months before the company concerned was even aware that their data has been hacked. Dark Beam hopes to be able to alert companies much more quickly than this.
In May 2018, the new General Data Protection Regulation (GDPR) comes into force. After this, companies who lose personal data will be liable to fines of up to 4% of their global turnover. This is concentrating minds. Dark Beam hopes to enable companies to meet their GDPR obligations.
CD200 is a protein that modulates the activity of mature immune cells. It protects certain tissues in the body such as muscles and nerve tissue from the immune cells. People who have low levels of the CD200 receptor on their immune cells are at higher risk of auto-immune diseases.
The herpes virus is able to survive in the human body by producing a protein very similar to CD200 – a viral homologue. The attractiveness of CD200 is that it acts on both the innate and adaptive arms of the immune system but does not impair the function of immature immune cells so response to infections is not affected.
Other groups have carried out research on naturally occurring CD200 and its homologues but although effective they are not practical and would require very frequent injections.
By modifying the protein, Ducentis is seeking to turn it into a practical treatment. There are many auto-immune diseases that might benefit from such a treatment, including arthritis.
Entia (previously known as Eva Diagnostics) was set up by Toby Basey-Fisher and Millie Clive-Smith, who joined forces to use a technology platform developed at Imperial College and won the OneStart competition in 2014.
Anaemia is the most prevalent medical condition in the world. At the moment, the determination of the details of the condition in an individual (for example measuring the level of haemoglobin and haemocrit) require that individual to visit a hospital where a large volume of blood is taken, for subsequent analysis, with the results typically coming a few days later. It may then be that another hospital visit is required. Entia's device enables a patient to do the same analysis at home in under five minutes. A pinprick of blood is taken and placed on a strip which is then fed into the hand-held battery powered 'Aptus' device. Aptus is connected to the user's mobile phone by wi-fi and the results are communicated instantly both to the patient and to the doctors in the hospital.
It is not hard to see how this will transform the lives of millions of anaemia sufferers worldwide. It will also save huge amounts of time and cost for hospitals.
Expend is developing a payment card and associated software to deal with the headache of expenses. The Expend debit card can be controlled tightly by the company with strict spending limits and controls and the associated app ensures that all the required information is collected at the time of purchase so that the expenses process can be automated from there on.
For example, when a user makes a purchase, the card will only allow a purchase to be made if it is within the limits set for it (value, geography, category of sales outlet). The user will be alerted that they have made a purchase and will be asked to take a picture of the receipt with the phone. If necessary the phone will ask additional questions so that all the required info is captured. The accounts are automatically updated and all the information is available for easy review.
The employee can now distribute his admin efficiently throughout the period, the life of the admin staff is simplified and their energies more usefully employed and the directors can know in real time what expenses they are incurring.
The Expend founders are two developers who have worked in the field of financial and payment systems for many years. They have assembled an expert team to cover all areas of product development.
Lupe has been formed to design and launch a better vacuum cleaner, based on a novel principle. The two founders were previously on the engineering design team at Dyson, where, among other things they were responsible for the design and development of the current Dyson flagship cyclone technology.
Their novel idea which is now going through the patenting process, is to use a significantly more aerodynamically efficient process to raise dust, especially dust in grooves on a hard floor. In a standard industry test, dust is placed in a groove of defined dimensions which runs at 45 degrees to the direction of travel. The Lupe prototype collects 100% of the dust. Conventional vacuum cleaners collect maybe 40% of the dust using an equivalent power.
The Lupe will be battery powered, and because of certain other novel features is expected to run at full power for 30 minutes. The brand leader, by contrast runs for only 8 minutes at full power before needing a 3 hour charge.
Plasma Antennas has developed a range of next-generation smart selectable multi-beam antenna technologies for small cell backhaul, broadband wireless access, mesh network and other communications and sensing applications. Based on a set of patented beamforming technologies, these high-performance electronically-steerable antennas are extremely lightweight and compact.
The company is at a very interesting point in its development. Having specialised in very high-end antennas (at up to £50,000 each) for military applications, it is now attracting a great deal of interest from mobile phone operators and trials are in progress with BliNQ, Vodafone and Airspan.
Professor Kathirgamanathan, based at Brunel University, and known as PK, is one of the world's leading experts on OLEDs (Organic Light Emitting Diodes). The specialist materials that he has developed are already used in a large number of commercial OLED applications, most commonly in the screens of mobile phones. He has now established a new company, Power OLED Ltd, the purpose of which is to develop and market new materials which will be used in the next generation of OLEDs.
The latest set of materials combines the following beneficial traits:
- Higher efficiency - 60% improvement
- Greater stability at higher temperatures
- Better matched electronic levels
For the end user, this will result in brighter, more efficient, longer lasting screens on laptops, tablets and mobile phones. The manufacturer benefits from a reduction in the number of manufacturing steps, an increase in yield, and a consequent reduction in costs. Power OLEDs has achieved comparable efficiency to the current standard using a material that is spin-coated as opposed to deposited by vacuum processing. This would reduce processing cost significantly in the long term. It is possible that these improved OLEDs will in future be used as lighting. Such lights could be in the form of flat panels, rather than today's tubes and point source LEDs.
The business model will be to license the technology to chemical manufacturers in some markets and develop a manufacturing capability for other markets.
Process Vision Ltd is developing an inspection system for gas pipelines. Paul Stockwell, the founder has worked for many years in the field of sensors for the gas and oil industry and became acutely aware of the requirement for detecting and measuring liquids in gas pipelines. Gas pipelines should not have liquids in them but sometimes do. The liquids can be condensation from the gas or liquids carrying over from the treatment plants – which are put in place to remove water, carbon dioxide or hydrogen sulphide from the gas. If the liquids accumulate sufficiently, they can fill the whole pipe diameter and then be pushed along as a slug, reaching the next gas treatment plant or compression turbine and wreaking havoc. Less dramatically, but possibly worse financially, the presence of liquids in the tubes where gas meters are placed can affect the measurement and lead to over or undercharging.
Process Vision has found a way to safely install optical inspection and measurement cameras on the pipelines.
Run3D is the brainchild of Dr Jessica Leitch, 30, who is an International runner herself (representing Wales) and who has a D.Phil from Oxford in the biomechanics of running. Runners have reflective balls attached to their various joints (hips, knees, ankles) and also at various other points on their legs and then run on a treadmill. Special cameras capture the image of the balls at 200 frames/sec. This data is then fed into a computer programme. The computer then outputs a complete gait analysis, giving every detail of the gait, the angle of heel-strike, the rotation and rate of rotation of each joint etc. The analysis can be used to modify the gait for two purposes, to reduce the likelihood of injury and to increase speed.
Travel Money Club is the brainchild of Don Clark, a very successful financial products retailer, Derek Taylor, a financial markets and forex specialist, and Martin Taylor, a software solutions expert.
Knowing the foreign exchange market well, the founders realised that bureaux de change were making a lot of money from exchanging foreign currency, and wanted to find a fairer way to charge for the service. So they decided to launch TravelMoneyClub.co.uk – foreign currency exchange with a difference. TMC makes no profit from exchanging pounds for foreign currency, instead making its profit from an annual membership fee. The fee of £60pa or £5.99 monthly includes three free next business day deliveries, a guarantee to provide the best exchange rates in the UK, and a guarantee that if any member fails to save at least the whole membership fee they will refund the difference at the end of the year.
In the words of the blurb, "The service is available via a mobile app and makes organising travel money easier than ever. The currency delivery service handles over £0.5bn of foreign currency each year and is regulated by the FCA, and the highly secure, best-of-breed platform is built on products and services from some of the most trusted security names in the world including Experian, Worldpay, GoCardless and Amazon. The service is aimed at frequent travellers and those who travel in large groups, and membership fees can be saved by exchanging as little as £750 in some currencies."