London-based venture capital investors, Forward Partners, saw its Net Asset Value (NAV) increase by 48.5 per cent to reach GBP103 million during the 12 months to 31 March 2021.
The VC firm, which is focused on early-stage tech businesses across e-commerce, digital marketplaces and applied AI, has seen significant momentum in its portfolio during the pandemic, as trends moving trade and consumption online accelerated. That momentum has continued into the current financial year with the firm’s NAV growing by 18.9 per cent – including new investments – during the last quarter (Q1 FY21).
The main boost to NAV was driven by strong next-stage investor financing for several of Forward Partners’ portfolio companies, including a Series A round of GBP10 million and Series B round of over GBP30 million. Earlier stage start-ups in the portfolio have also seen financing through successful seed rounds.
Forward Partners has also been making substantial new investments of its own. It co-invested in a late-seed GBP3.5 million deal with Clustermarket, an online marketplace for medical equipment, people and data. Clustermarket is fast-growing, increasing users by around 30% per month. Forward Partners also invested in a business intelligence provider that uses applied AI to make advanced modelling and scenario forecasting technology more accessible. A large UK public sector health body is currently using its technology to model the impact of Covid-19 on patient waiting lists.
Another area of significant growth for the Group was its investment in Forward Advances, a tech-orientated revenue-based financing platform. Advances offers SMEs working capital solutions for inventory and digital marketing. Using open banking technology and digital advertising performance integrations, rather than relying on outdated credit scores, the company can help more businesses while lowering risk of default.
Funding from Advances is equity free and flexible. Loans are charged at a fixed percentage fee and repaid by the portfolio company as a percentage of ongoing revenue. For businesses raising capital, it provides an option to finance growth without rigid repayment terms, covenants, warrants, or the equity demands of traditional debt or venture capital. This makes Advances particularly popular with founders. While Advances took around 11 months to lend its first GBP1 million to start-ups during the pandemic, it only took two months to reach lending of GBP3 million.
Forward Partners was established in 2013. It has been backed by BlackRock since 2015 and is headquartered near East London’s thriving Silicon Roundabout. The firm has invested between GBP30,000 and GBP2 million into 65 start-ups over the last eight years, and it now has one of the UK’s most comprehensive networks of founders. The Group receives over 4,000 start-up funding applications every year.
Nic Brisbourne, CEO of Forward Partners, says: “We are seeing huge momentum in our portfolio, which is packed with growing businesses operating in some of the hottest tech sectors. The returns we are achieving for investors in our funds reflect that momentum and have hit almost 20 per cent this quarter. We are offering our investors access and a proven route to invest in fast-growing smaller firms, mitigating the downside risk of business failure and maximising the opportunity for strong returns.
“Our big differentiator is that we are offering start-ups more than money. Through our Studio Team we have a group of experts across brand, marketing, sales, and leadership who can be immediately plugged into a new investment and used to accelerate growth. Meanwhile, the innovative revenue financing solutions on offer at Advances are popular with entrepreneurs and is expanding fast. The combination of flexible upfront capital, ongoing business growth expertise, and revenue-based financing makes Forward Partners unique.”
