Octopus Investments (Octopus), an investment manager on a mission to invest in the people, ideas and industries that will change the world, today announces it has opened a new £5m fundraise for the Octopus Future Generations Venture Capital Trust (the VCT).
The investments the VCT makes align with one of three core investment themes that run through the Octopus business; building a sustainable planet; empowering people to create a fairer and more equitable society; or revitalising healthcare.
The VCT offers investors an opportunity to access a portfolio of early-stage companies that are armed with pioneering technology, have talented management teams and are often in sectors primed for disruption.
Launched in January 2022, the VCT is now in its fourth year, which could present an additional opportunity for investors given the below reasons:
- A maturing portfolio: The VCT is now entering a new phase. It has a portfolio of more than 35 companies at a range of stages in their lifecycle and is looking to grow this further. While these companies are all still early stage, new investors will gain exposure to a maturing ventures portfolio.
- Potential for growth: The portfolio companies within the VCT are beginning to reach key milestones, such as scaling operations, or attracting further rounds of funding. This can create a stronger foundation for growth.
- The potential for profitable exits: In a typical venture capital cycle, exits can take four to seven years or more to secure. Investing in a VCT before many of these exits offers the potential to benefit from Net Asset Value (NAV) growth and potential tax-free dividends payable during this period and potentially special dividends if portfolio companies are sold for significant gains.
The VCT has deployed more than £32m into exciting portfolio companies across the three investment themes. Notable portfolio companies include:
- DRIFT is a company aiming to drive the clean energy transition with high-performance sailing vessels that harness ocean wind to produce green hydrogen at sea which can then be delivered globally. It does this using a unique, AI-enabled routing system that enables the vessels to find and stay in optimum weather conditions.
- Swiipr is a company trying to solve the issue of the hassle experienced by both airlines and travellers when flights are disrupted. Swiipr’s platform simplifies this by automating payment verification and processing through a system designed specifically for airlines.
- CoMind is a company focused on building revolutionary brain sensing technologies. Their mission is to redefine the way the brain is measured and treated at every stage of care, for example, using non-invasive technology for patients impacted by traumatic brain injury or a stroke.
The VCT is managed by Simon King, who has over 10 years’ experience in the industry and is a Partner in Octopus Ventures. Octopus Ventures is known for its expertise in identifying and supporting innovative businesses that have grown to become household names, including Depop and Zoopla. It is both the team’s experience and network that brings significant advantages to investors.
Simon King, Lead Fund Manager of Octopus Future Generations VCT, said:
“We believe the companies that understand what it means to tackle some of society’s biggest challenges have the potential to deliver some of the best returns to investors over the coming decades. These challenges represent huge addressable markets and the demand for their solutions is growing and urgent. On top of that, people increasingly want to work for businesses that make a positive difference in the world; as a result, these companies are attracting the best talent.
“We always look forward to seeing the positive, meaningful change our investments can have on the UK economy and more broadly, on society and the planet. But we know that change won’t happen overnight. It’s one of the reasons why we are attractive to entrepreneurs looking for a partner who can support their long-term growth and ambitions.”
Kristy Barr, Co-Head of Retail Investments. said:
“We believe the popularity of VCTs will accelerate this year. This follows the confirmation in last year’s Budget that the sunset clause is extended until 2035, which offers clarity and continuity for planning. Plus, VCTs have just celebrated their 30-year anniversary, cementing them as a crucial part of the UK’s investment landscape. This allows advisers to incorporate them into tax planning for their clients and make recommendations with greater confidence.”
The minimum investment for Future Generations VCT is £3,000 while the maximum VCT investment qualifying for tax relief is £200,000.