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Investment: Arie Capital Technology
Aim: Investing in next generation high technology
Tell us about the fund
Arie Capital has a track record of successfully raising and investing funds in technology-focused companies. With staff in London, Los Angeles, Paris, Tel Aviv and Beijing, we have developed a global investment network and are now offering UK investors the Arie Capital Technology EIS.
With a focus on next generation high technology, we see excellent opportunities to participate in what we believe is the most disruptive and interesting sector of our time. Our team has experience investing in low cost satellite technology, consumer electronics, big data, Internet of Things (IoT), smartphone applications, med-tech and telecommunications. We see value in companies that have strong and scalable intellectual property (IP).
Many of the opportunities we review are not broadly available to UK investors. We seek to change this by offering a discretionary EIS portfolio service that benefits from our experience in EIS, due diligence, company mentorship and all other commercial aspects. We are aiming to create an investment that is both interesting and rewarding to hold.
Central to the fund’s approach is seeing a proof of concept, whether it is evidenced in established revenues, strategic partnerships or a compelling minimum viable product. Investing after a business has established its proof of concept helps to both reduce the risk associated with early phase technology and assist us in accelerating the commercial development of the product.
The fund’s investee companies will be required to have a business-oriented management team with a credible track record of performance. Arie will seek to work with entrepreneurs who have shown success in their vertical and can replicate their approach and monetise opportunities.
Taking the role of company mentor, Arie will seek to take a hands-on approach to manage risk and maximise potential commercial opportunities of the investee companies. The combined experience of the team in raising capital, managing intellectual property and business development, presents the potential for the fund’s investee companies with an opportunity to grow into new markets that might otherwise have been limited.
The key members of Arie are its founding partners Simon Tobelem, a globally experienced investment, advisory and business development professional, with extensive experience in capital raising, structuring and exits and Stephen Margolis, a qualified lawyer with over 35 years’ experience in financing and alternative assets.
Arie has appointed the highly-awarded Sapphire Capital Partners as its Financial Conduct Authority regulated investment manager, providing an independent layer of compliance to the fund.
To align the interests of Arie and its investors, no performance incentive is payable on any investment until investors receive cash proceeds in excess of £1.35 for every £1.00 invested. The performance fee will be charged at 20% on the amount of the increase over and above £1.35 (based on a £1.00 investment). The 20% performance fee will be split 16% to Arie and 4% to Sapphire Capital Partners.
How much is being raised?
Aggregate subscriptions of £10 million unless increased or decreased at the absolute discretion of the investment manager.
What type of investments are being sought?
The fund that will provide private investors access to a selection of EIS advance assurance approved, innovative growth companies that have an established proof of concept and commercial viability. The fund will seek to source opportunities in the areas of;
- Medical technologies
- Smartphone applications
- Big data and the IoT
In putting the initial portfolio of investments together, we had a general eye to each company;
- Having a proof of concept,
- Revenues or about to have revenues,
- A barrier to entry,
- Capable management,
- A B2B approach at some level so that we can best assess its viability amongst its competitive landscape,
- An ability to have support from the institutional fund of Arie Capital
- Perhaps most importantly – has the ability to both grow on its own and also has connectivity with other investments that Arie has made and thereby establish synergistic connections between the investments.
What is the minimum investment?
£10,000 and multiples of £1,000
What is the targeted return?
£2 for every £1 invested excluding tax reliefs after a minimum of five years.
Provide details of the top three fund holdings
Being its first fund, Arie Capital Technology EIS does not have any existing holdings. However, the institutional fund of Arie Capital, made the following investments in 2017, which are indicative of the investment theme of the EIS offering;
Redux: an audio and Haptics solutions (kinesthetic communication that recreates the sense of touch by applying forces, vibration, or motions) for mass market applications.
Satixfy: a satellite broadband chips manufacturer enabling doubling satellite coverage capacity.
Flo Data: a big data management platform specialising in the M2M industrial space.
Oasis Smart Sim: an embedded SIM card designer and solutions provider for secure element in connected devices.
Integra Holdings: focusing and commercialising life sciences intellectual property from Hebrew University.
EyeSight: a home automation through powerful all-software gesture recognition technology.
JobJob: a location-based mobile app for the hourly-wage industries.
Peratech: provides 3D force-touch solutions for next-generation human-machine interfaces. Of the above, Arie Capital as exited one company at a 2.3x multiple within five months and an unaudited IRR of 142%.