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 £80 million fundraise for Octopus Titan VCT (‘Titan VCT’). The news comes as Octopus Ventures, which manages Titan VCT, significantly expands its team to take advantage of the growing number of exciting investment opportunities in the UK.
The portfolio team at Octopus Ventures has grown by 45% since September with nine new investment professionals joining, making it one of the largest early stage investment teams in Europe. The now 28 strong portfolio team includes 25 investment professionals and a talent team dedicated to helping portfolio companies hire the best talent to help them realise their growth potential.
Octopus Titan VCT is the UK’s largest VCT1 and offers investors, comfortable with the risks of smaller company investing, attractive tax incentives and access to a well-established and diverse portfolio of more than 80 pioneering smaller companies.
Paul Latham, Managing Director of Octopus Investments, said:
“VCTs have consistently proven to be vital a source of patient capital for early stage companies and will be incredibly important in the next year to help drive forward our post-Covid economic recovery by creating jobs in new and innovative areas of the economy.”
Total revenues across the portfolio have increased significantly in the year to 2019, growing by 43%, which has helped to create an additional 1,300 new jobs2. One of the standout performers is Cazoo, which is on a mission to transform the way people buy used cars in the UK by providing an online experience that offers better selection, transparency, convenience and peace of mind.
Jo Oliver, Fund Manager of Octopus Titan VCT, commented:
“It is an incredibly exciting time to be investing in early stage technology companies. We’ve seen a massive acceleration in the adoption of technology as a result of Covid-19, which means the long-term outlook for our portfolio and the types of businesses we invest in is extremely positive. Some really interesting businesses are coming to market at a time of significant change, and we expect this to continue with plenty of new investment opportunities emerging. Covid-19 has inevitably presented some short-term challenges too, but entrepreneurs are uniquely able to adapt, and in many cases have taken advantage of new opportunities.
“Cazoo is a great example of a business that has benefited from the shift to online spending. The used car market is enormous but has, until now, been left almost untouched by the digital revolution, making it ripe for disruption.”
Cazoo was valued at more than £2 billion after its latest funding round, having also been named the fastest British company to reach ‘unicorn’ status ($1 billion valuation) earlier in the year. Titan VCT first invested in Cazoo shortly after the company was founded in late 2018 and, having only launched in December 2019, it has already achieved revenues of over £100 million, with more than 700 employees3. Its founder, Alex Chesterman, also founded Zoopla, which is the only other VCT backed business to become a unicorn, having also been backed by Titan VCT.
Other companies in the Titan VCT portfolio that have continued to grow quickly include Patch, the online plant delivery service which has more than tripled its revenues over the past year2, and Depop, the global fashion market place, which now has over 24 million users globally4.
In the 12 months to 30 June 2020, Octopus Titan VCT invested £95 million into 33 companies, including follow-on investments into some of the existing portfolio companies5.The team meets with thousands of entrepreneurs each year but very few make the cut, with less than 1% going on to receive investment.
Jo Oliver added:
“Most meetings with entrepreneurs are now taking place virtually, but the opportunities for new investments are stronger than ever. As one of the largest venture capital funds in Europe, we are lucky enough to see a significant number of the companies looking to raise money, which gives us great visibility on the best investments for our investors.”
Octopus is also unusual as it offers an ISA wrapper on a VCT. This enables investors to transfer any existing ISA funds (from previous tax years 2019/20 or prior) to a new Titan VCT ISA, while maintaining all the benefits of VCT investing.
The share offer is open until 20 October 2021 but may close earlier if fully subscribed. The minimum investment is £3,000 while the maximum investment qualifying for tax relief is £200,000.
Notes to editors:
1) AIC interactive statistics – as at 13 October 2020
2) Octopus Ventures portfolio companies, comparison of 2019 calendar year vs. 2018
3) Cazoo – as at 14October 2020
4) Depop – as at 14 October 2020
5) Octopus Ventures new investments completed in 12 months to 30th June 2020
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. We do not offer 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 octopusinvestments.com. 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: October 2020.