Octopus Investments has made the first investment of GBP2m from the GBP30m Octopus Capital for Enterprise Fund into KeTech Group, a systems integrator in the transport, defence and indu
Octopus Investments has made the first investment of GBP2m from the GBP30m Octopus Capital for Enterprise Fund into KeTech Group, a systems integrator in the transport, defence and industrial sectors.
Octopus’ GBP2m equity funding leads a GBP4.5m refinancing round, which also includes GBP2.5m of invoice discounting from Centric Commercial Finance. It will provide KeTech with the capital required to expand its new business development pipeline and service new contract wins.
This investment represents the first injection of capital from the OCfE Fund which is mandated to offer equity or mezzanine financing to small and medium size enterprises that have viable business models and genuine growth potential but which are currently unable to access the funding they require. It also marks the first investment to be made by the government’s GBP75m Capital for Enterprise Fund in its entirety.
The GBP75m CfE Fund is a government initiative launched earlier this year in order to help SMEs in the UK gain access to the financial support required to bridge the funding gap caused by the credit crisis. In April 2009, it was announced that GBP60m from the CfE Fund would be allocated to two separate GBP30m funds, one of which is the OCfE Fund. A further GBP15m is being managed as a co-investment fund by Capital for Enterprise Fund Managers.
KeTech provides mission critical communication software and services to the rail industry, including platform-to-train and on-train safety systems. It also produces specialist detection systems for use in defence and emergency services markets, together with a range of building management systems.
Secretary of State Lord Mandelson says: ‘Ambitious and innovative businesses like this are the lifeblood of the economy but tough credit conditions can make it difficult for them to invest in their future. The government is committed to ensuring that viable companies have the finance they need to grow.’
Chris Allner (pictured), head of private equity at Octopus Investments, says: ‘We are extremely pleased to announce the first investment for the Octopus Capital for Enterprise Fund. KeTech is an exciting company with a unique range of products and services that support both key domestic infrastructure projects and export markets. We are delighted to be supporting KeTech as it enters its next phase of development and look forward to its future growth. UK SMEs have a vital role to play in the future of our economy and as one of the UK’s leading investors in this market segment, we are focused on working in tandem with the government to ensure that this important market segment is provided with the kick start it needs as quickly as possible.’