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Octopus Investments launches fundraise for its Future Generations VCT

by | Feb 1, 2024

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Octopus Investments announces it has opened a new £15m fundraise for Octopus Future Generations VCT (the VCT).

Launched in 2022, the Future Generations VCT is a part of Octopus’ ambitions to back businesses that have the power to transform the world for the better, and part of its belief that some of the best investment returns will come from companies trying to solve society’s biggest problems.

The VCT offers investors the opportunity to access a portfolio of exciting, early-stage companies which are aligned with three core investment themes. These include:

 
 
  • Building a sustainable planet: By reducing carbon emissions, protecting ecosystems, or creating circular economy.
  • Empowering people: To create a fairer and more equitable society, by making the world a better and safer place.
  • Revitalising healthcare: By backing businesses that are moving health and wellbeing forwards, such as by investing in entrepreneurs that are improving lives through digital health solutions.

The VCT is managed by Simon King, who has over 10 years’ experience in the industry and is a Partner in Octopus Ventures, one of Europe’s largest venture capital firms.

In keeping with its Future Generations ethos, Octopus donates 10% of its annual management charge to Octopus Giving, its charitable foundation dedicated to supporting charities that drive positive and social change. 

The team employs a rigorous investment process, engaging with thousands of businesses, but only selectively investing in the top 10-15 each year for the Future Generations VCT, which have the potential to transform outdated industries for the better. Prospective investments tend to be companies with innovative technology, with the potential for rapid growth, have talented and ambitious management teams and are aligned with one of the three sustainability investment themes.

 

Since its inception, the VCT has already raised more than £45 million and has invested in 25 companies across all three themes. Notable portfolio companies include:

Skin+Me: a pioneering skincare company which combines medical expertise and technology to offer customers a bespoke treatment plan and a fully customised skincare routine, without requiring a trip to the dermatologist. Skin+Me uses recycled packaging and offer personalised solutions that are made-to-order, ensuring not a drop of product goes to waste.

Neat: provides embedded insurance, which is insurance that’s bundled with a product. For example, if you buy from an online retailer and choose to add accidental damage cover.But Neat is a little bit different because it allows sellers to change their offer without the need for developers to write new code – a first for the embedded insurance industry. Neat also makes sure the products it protects are repaired or reconditioned, not automatically thrown away or replaced, thus reducing the environmental impact.

 

Secfix: automates the work required for IT security compliance audits and attain ISO 27001 standards (the international standard for information security management). It helps businesses organise their people, processes, and technologies to ensure the confidentiality, availability, and integrity of information. This process can be cumbersome, so Secfix aims to reduce the time to completion from 12-15 months, to only three or four.

Simon King, Lead Fund Manager of Octopus Generations VCT, said:

“We live in a changing world. But we believe that a new world is possible – one where the most successful companies are a force for good. The entrepreneurs we back are reimagining how whole industries behave.

 

“We’re backing teams who are eliminating carbon footprints, creating cancer vaccines, building the next phase of the internet and charting a greener approach to space travel, to name just a few. By 2030 it is the aim of Octopus to have invested £10 billion into the industries that are bringing about a positive change in the world and we firmly believe that the Future Generations VCT will be at the forefront of this mission”.

Jess Franks, Head of Investment Products at Octopus Investments, added:

“VCTs are a very accessible investment, they deliver a diversified portfolio of early stage unquoted investments that would otherwise be difficult to access without significant investible wealth, with minimum investment sizes starting at around £3,000. Many investors add to their VCT portfolios every year, building a tax efficient tranche of investment in an alternative asset class.

 

“In light of recent market uncertainty and an increase in risk free returns available to investors, VCTs remain an area where advisers can add meaningful value to their clients and could support them in delivering good outcomes for their clients and business. By building pots of VCT investments, investors can create a tax free income steam which enables current year income tax planning and adds an asset class to their portfolios that would otherwise likely be out of reach”.

The share offer is open until 30th January 2025 but may close earlier if fully subscribed. The minimum investment is £3,000 while the maximum VCT investment qualifying for tax relief is £200,000.

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