GBI Magazine talks to Sanjeev Gordhan, Director at Newable Ventures about why – and how – the group’s sound business strategy can help deliver potentially higher returns for EIS investors.
Newable Ventures connects early-stage investors to some of the UK’s most promising SMEs and start-ups through EIS and SEIS. In particular, it offers the opportunity for investing in high growth, disruptive companies. The group prides itself in offering not just capital, but an eco-system of tailored services including advice and flexible workspaces to equity investment.
Having secured the British Business Investments’ commitment of £10m in 2020, Newable are well placed to increase their level of investments over the coming years and help more and more businesses to thrive. This, along with their fund growth, will provide the platform to become one of the best pre-series A EIS funds in the market.
The Newable Group focussed on supporting start-ups and SMEs across the UK and last year supported in excess of 25,000 SMEs, a figure reflective of that fact that Newable has been helping early stage businesses for over 35 years. Sanjeev links the history of the Newable Group to the Funds success, which was acquired by the group in 2017 and now plays a leading role in the venture capital EIS space.
The Newable group pays close attention to these businesses with an established and complementary organisational structure. Sanjeev explains, ‘it can be challenging to really support portfolio business businesses but in our case it’s just a matter of speaking to our colleagues in other parts of the Newable Group.’ He highlights a great example of this structure in action. ‘One business came to our attention that we had invested in 2017/2018. Once the investment was completed, and had secured sufficient runway to look at international expansion, we involved them on trade missions to India and Russia.’ The company ended up winning contracts in both countries. It goes to show that Newable really gets involved and having provided capital, it looks to support business in a myriad of ways;
In its early days, the group supported businesses predominantly from London. However, as they’ve grown, they now provide services across the UK. One of the most innovative ways that they do this is through providing flexible workspace. Sanjeev elaborates, ‘the space part of our business is probably the longest-standing because we’ve always had property on our books and it’s a matter of how we’ve adapted the model.’
The most recent leap came with Newable’s acquisition of Citibase, a business which enables SMEs and Start-Ups to use flexible office space. Sanjeev is quick to highlight Newable’s position in this market, explaining ‘we fit in between Regis and WeWork. For us, as investors, we don’t want these small businesses spending ridiculous money on offices we want their initial stages to be as efficient as possible.’
Ahead of the curve
Sanjeev explains that Newable now has 60 locations across the UK, from Southampton to Aberdeen and emphasises that the huge changes in working habits over the course of 2020 and the global pandemic leave Newable uniquely placed to adapt to these societal changes.
For many start-ups that have come through incubators and accelerators, there’s often the difficult question – what’s next? For many start-ups that have raised a post-seed funding round they find that they have outgrown their accelerator, and that’s when Newable can be especially helpful to them. Sanjeev explains, ‘we’re like an accelerator plus. They don’t have to tie into any services as such but they’ve got access to lots of things that will help them, whether that be workspace or advisers and of course obviously capital. This goes full circle to the investors, the better we are able to support our businesses, the more successful are investee companies are – which ultimately feeds into higher valuations and returns for investors. It is in my view one of the reasons why Newable has seen such a low failure rate in comparison to the EIS industry generally.’