Unlike the other managers featured in the New Entrant Showcase, Haatch Ventures are not a brand new entrant to the EIS Fund Market. They launched their first EIS Fund three years ago, and we wanted to show what a good new entrant can achieve in their first three years. There is however an important similarity with the other companies. Haatch introduced their first Fund having built up a remarkable track record in investing in exciting young companies for five years through Haatch Angel.
In the past 3 years their growth has been breath-taking. As a manager, they have now made 50+ investments in over 40 companies, and the portfolio valuation is over £400 million. They are now on the 8th tranche of their EIS Fund. Their first SEIS Fund was oversubscribed in two weeks, and are currently raising for the second SEIS Fund. They are now launching a follow-on Fund, to provide further capital for those companies in their portfolio that need expansion capital. They also created headlines by targeting a 10x return on their SEIS and EIS Funds (and 3-5x for the Follow- on Fund), which they believe is entirely reasonable, given their investment focus.
A unique pedigree
The partners of Haatch bring together four individuals with a unique pedigree for identifying, building and then selling companies. Scott Weavers Wright and Fred Soneya created an online retail company that was sold to Morrisons for £70m. Simon Penson built and then sold a market leading digital marketing agency, and Mark Bennett has held a number of senior roles with Google, which is helping some of our portfolio companies today. Between them they have a track record of exits totalling $160m.
A further unique feature about Haatch is that the partners always invest alongside other investors in each Fund, so that their interests are completely aligned with external investors.
Haatch now see over a thousand new investment opportunities every year. They are sought out by entrepreneurs that have heard about the excellent hands-on support they give to their portfolio companies. The companies they invest in are primarily in the B2B SaaS market, in emerging technologies that will transform industries. In the EIS Fund, the companies have to be on the path to break even, and proven that there is a real market for the product. They are companies that can generate proven and sustainable growth, targeting annual growth in triple digits.
It is because of this focus that they believe they can genuinely talk about a return of 10x money invested. There are huge returns in digital technology as evidenced by their first exit, which yielded a remarkable 276x money….although they don’t expect this to be achieved very often! The first EIS Fund they launched in 2018 is now showing unrealised valuation uplifts of some companies by 3-5x money.
Strong response to Covid
Although Covid has been difficult for so many, it has proved to be a period of growth for Haatch. It has driven consumers to seek new tech solutions, and many businesses have wanted new tech solutions now, rather than in three years’ time. In other words it has accelerated the opportunities for their portfolio companies across the board
Looking to the future
The rate of growth of Haatch shows no sign of slowing down. As well as the new companies being selected for the SEIS and EIS Funds, the emphasis is on supporting the companies that urgently need growth capital to exploit the opportunities that have emerged. There are a good number of existing portfolio companies now seeking Series A funding, and the launch of the new Follow-on Fund to support them. As Fred Soneya, partner at Haatch said, ‘the future for Haatch is now more exciting than ever before.’
About Fred Soneya
Fred Soneya Co-founder & Partner
Having co-founded Haatch in 2013, Fred supports the investment process end to end and works with portfolio businesses in advisory and board roles. Previously Fred was responsible for a number of high-profile, large-scale innovation projects across Kiddicare.com and, post-acquisition, Morrisons. Fred created award-winning digital customer experiences bridging the online-offline gap at Morrisons.
This included the launch of browse and order points, mobile payments and electronic shelf-edge labels powered by early-stage technology companies. To achieve this Fred worked with cutting-edge, early-stage technology start-ups to integrate and piece together award-winning customer experiences.