Octopus Investments, part of Octopus Group and the largest provider of venture capital trusts (VCTs) in the UK1, today announced it has opened a new £175 million fundraise for Octopus Titan VCT (Titan VCT), providing investors access to the most pioneering opportunities across maturing and early-stage technology companies.
With £1.2bn assets under management2, Titan VCT is the largest VCT in the UK and backs more than 115 smaller companies. It has helped grow many companies to household name status, from Secret Escapes and Zoopla to Depop and Graze. Four Titan VCT investments have achieved ‘unicorn’ status, valued at over $1bn.
Malcolm Ferguson was appointed lead fund manager of Titan VCT in June 2022, taking over from Jo Oliver, who is stepping away from fund management to focus on other opportunities within the Octopus Ventures team. Malcolm has been a part of the Titan team for nine years, having joined Octopus in 2013. Titan VCT has a diversified portfolio across five main sectors: Health, Deep Tech, Fintech, Consumer and B2B software.
Despite a more challenging environment for both private and public companies, Titan VCT’s portfolio companies continued to see strong revenue growth in 2021, increasing by 70% on the previous year3, and the VCT has built a track record of paying regular annual dividends. Dividends paid from VCTs are tax free, which can make them an attractive source of income, especially for higher rate taxpayers.
Malcolm Ferguson, Fund Manager of Octopus Titan VCT, said:
“It has been a successful year for Titan, with exceptional portfolio revenue growth, even as rising inflation and living costs began to bite. This is a testament to the strength of the innovative entrepreneurs and companies we back, many of which are dedicated to solving some of the world’s biggest problems.
“The headwinds that began to appear in 2021 have only worsened, with inflation seeing little sign of abating, and the UK likely to undergo a prolonged recession. However, these periods of volatility and decline can create incredible opportunities, with previous recessions seeing the rise of some of our most successful investments, such as Zoopla. As funding dries up, with many investors staying out of the market, the role of Titan in supporting and nurturing the great tech-enabled companies of the future becomes ever more important.”
Titan VCT offers investors, comfortable with the high risks of smaller company investing, attractive tax incentives and access to a well-established and diverse portfolio of pioneering smaller companies.
The VCT has continued to deploy new money in 2022, taking advantage of opportunities in the market, and supporting those companies which would otherwise struggle to raise funding and continue to grow. Titan VCT has deployed over £107m into investments in the 12 months up to 30 June 2022, with over £61m deployed into follow-on investments.4
Notable portfolio companies include:
- ManyPets: an award-winning pet insurtech company that has transformed the way people buy pet insurance and pay for vet treatment, it is currently valued at $2.4 billion5 earning it unicorn status in the UK.
- Skin+Me: a pioneering skincare brand, that combines medical expertise and technology to offer personalised treatment. The skincare market is expected to hit $38.9 billion in 20306.
- Tatum: a blockchain development platform that allows developers to connect various blockchains and blockchain services through a single integration. It simplifies operational processes, reduces product development time for applications by up to 90% and bridges the skills gap that exists because of the relative lack of blockchain developers in the market.
- Legl: a digital infrastructure for law firms which offers efficient solutions to client onboarding, risk management, compliance and payments. By drastically reducing time spent on unbillable tasks, lawyers are able to give greater precedence to client matters in addition to providing them with a seamless, digital-first experience.
- Taster: the first digitally native food brand concept to scale up via a licensed restaurant partnership model. By partnering with existing experts in food preparation it can ensure a high level of quality of the food being delivered and ensure the operations are being run in an efficient way.
- Big Health: a company with a mission to help millions of people get back to good mental health by providing safe and effective non-drug alternatives for the most common mental health conditions. Designed by leading clinical experts and backed by 13 RCTs, Sleepio™ for insomnia and Daylight™ for worry and anxiety are among the world’s most evidenced digital mental health solutions.
Malcolm Ferguson continues:
“While the outlook for investors and early-stage companies may look bleak today, we are positive on the opportunities we see, as well as the shape of Titan’s portfolio. The vast majority of the companies we invest in have stronger cash positions than pre-pandemic, leaving them well placed to invest for future growth.7
“The adoption of new technology is not stopping or slowing down, and it remains our mission to back the entrepreneurs who harness the opportunities that continue to emerge. With the incumbents retrenching, and Big Tech not only slowing hiring but also reducing headcount, it will be the new and younger companies that create many of the great breakthroughs and innovations of the future.”
Octopus has one of the largest venture capital investment teams across Europe, with over 350 years of cumulative experience, and almost a third have either founded or co-founded a business themselves. The investment team for Titan VCT truly understand the challenges that early-stage companies face and have the expertise and experience to identify and stick with the innovative businesses that aim to grow rapidly and disrupt their respective industries.
The share offer is open until 9th November 2023 but may close earlier if fully subscribed. The minimum investment is £3,000 while the maximum investment qualifying for tax relief is £200,000.
-Ends-
Notes to editors
- The Association of Investment Companies, Interactive Statistics – as at September 2022
- AUM as at 30 June 2022
- Growth in revenue of portfolio companies in 2021
- From 30 June 2021 to 30 June 2022
- Valuation of ManyPets from June 2021- https://app.dealroom.co/companies/manypets.
- Global Personalized Skincare Market worth $38.9 Billion by 2030, report, InsightAce Analytic, January 2022.
- Source: Percentage NAV by Cash Runway, Octopus Ventures portfolio and valuations data, 30 June 2022
Performance
Past performance is not a reliable indicator of future results and may not be repeated.
| 2018 | 2019 | 2020 | 2021 | 2022 | |
| Annual total return | 4.3% | 3.3% | 2.3% | 32.8% | -10.2% |
| Annual dividend yield | 5.3% | 5.3% | 5.4% | 5.6% | 9.7% |
| NAV | 94.3p | 92.4p | 89.5p | 113.9p | 91.3p |
| Total value per share | 163.3p | 166.4p | 168.5p | 197.7p | 186.3p |
The annual total return for Octopus Titan VCT is calculated from the movement in NAV over the year to 30 June, with any dividends paid over that year then added back.
The revised figure is divided by the NAV at the start of that year to get the annual total return.
The annual dividend yield is calculated by dividing the dividends paid per annum by the NAV at the start of the period. Total value per share shows the sum of the NAV per share in pence and cumulative dividends per share in pence since inception for the last five years to 30 June.
NAV is the combined value of all the assets owned by the VCT after deducting the value of its liabilities.
The performance shown is net of all ongoing fees and costs.
For journalists in their professional capacity only. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its VCT-qualifying status. VCT shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell. Past performance is not a reliable indicator of future results. Personal opinions may change and should not be seen as advice or a recommendation. This is not investment or tax advice. We recommend investors seek professional advice before deciding to invest. This advertisement is not a prospectus. Investors should only subscribe for shares based on information in the prospectus and the Key Information Document, which can be obtained from investments-old.production.octps.co.. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued: November 2022.