Raising Finance

The Routes to Finance that startups and scale-ups can take

5 min read

21 November 2017

Deputy editor

As part of the Business Growth Programme, the keys to unlock access to finance for fast-growth businesses in London are available.

Routes to Finance is a campaign from London & Partners – Mayor of London Sadiq Khan’s promotional company.

It arrives as part of the Business Growth Programme, launched earlier this year to help firms across the capital leap the hurdles in their way. That’s achieved through support from experienced entrepreneurs and investors that have been there and done it.

Routes to Finance delivers all the information that entrepreneurs and leaders of startups and scale-ups need to be aware of when achieving growth and securing investment.

The report covers everything early-stage SMEs should know about initial funding options, the opportunities open to later-stage SMEs that already have capital behind them and, finally, exit planning.

According to the research in the report, the nation’s fast-growth companies achieved record levels of investment during H1 this year. Over the period, some £3bn was invested into businesses, a 74.3 per cent year-on-year increase, which led the average deal to top £5.5m.

Those that contributed to the findings include executives from the likes of Silicon Valley Bank, Fintech Circle and Mitsui & Co.

And in the words of Mitsui & Co’s investment manager Yvonne Haizel: “Success becomes likelier with each next funding round.”

The Routes to Finance report also includes knowledge from leaders of companies that have gone through various funding options, such as debt finance, seed investments, crowdfunding and Series investments.

Metail is a perfect example of a business that’s worked its way through the routes to finance. Sharing his experience in the report, co-founder and CEO Tom Adeyoola was inspired by his wife’s issues with online shopping and from there Metail was born.

The business uses computer vision tech to make shopping online for clothes more personalised. Women can create a 3D “MeModel” that represents their shape and size, on which they can then places clothes. With more than seven million women creating MeModels, there is high consumer demand, which means a high investment opportunity, as Adeyoola has proven.

In 2008, he secured £60,000 of working capital, generated from his own savings alongside contributions from friends and family. After Metail achieved a £200,000 valuation, the business secured angel rounds of £450,000, £1.2m and 2.6m.

A private beta launch in 2011 led to a full launch with none other than Tesco. That resulted in the company securing a Series A investment, which came out of the blue.

“The fact that we weren’t looking for money meant we could set out the terms under which we’d consider taking investment,” said Adeyoola. “As a result, the A-series proved to be our quickest and easiest funding round.”

In just three months, a $12m Series A was closed, led by TAL and supported by angel investors. This is just one of the many routes to finance open to entrepreneurs.

Although investments can come in many shapes and sizes, entrepreneurs needn’t feel discouraged – everything they need to know about securing capital can be found within the report.

Offering insights from his own experiences, Adeyoola, who has also secured a $10m Series B investment, said: “Success isn’t defined by funding rounds. It comes down to reaching the next commercial milestone, then the next, until you’re an established business.”

“Put yourself in the way of opportunities. Initiatives like the Business Growth Programme are there to help with that.”

The London & Partners Business Growth Programme is open to businesses of 3-250 employees, based in London, with a turnover of less than £40m.

It aims to ensure small businesses in digital, tech, life sciences, media and telecoms, and creative sectors have the skills and guidance to grow their business.

A mentoring scheme, dedicated business growth advisor, local business support, workshops and events, and a corporate engagement programme are all offered as part of the programme.

For more funding advice for startups, you can read the London & Partners new report, Routes to Finance. Download it here to discover the key stages on the financial journey in moving from startup to scale-up.