Early stage technology investment company Sure Ventures provides small investors with exposure to early stage companies involved with high growth activities, such as virtual reality, Internet of Things and fintech.
The focus is early stage companies based in the UK and Ireland, where there are many significant opportunities. The type of technologies these companies are involved with are also at an early stage of their development and commercialisation. There is no guarantee that any will succeed but there is enormous potential for each one.
Sure joined the Specialist Fund Segment of the Main Market in January 2018, when it raised £3.3m before expenses at 100p a share. A further £200,000 at 100p a share was raised in July and £1.08m at 102.25p a share in October.
Two of Sure’s portfolio companies have already floated on AIM. VR Education was the first, followed by Immotion, which is the only one directly held by Sure Ventures. The other investments are held by Suir Valley Ventures Fund, where Sure has committed to invest €4.5m at €1 a share. There have been three drawdowns so far.
Sure invested £500,000 in Immotion in April 2018 and the immersive virtual reality firm floated on AIM in July, when it raised £5.75m at 10p a share. That represented a gain on the pre-flotation investment of around 60%.
The Immotion share price has fallen back to around 6p since then, so the current value of the Sure investment is slightly less than the initial amount invested. Even so, the prospects are good.
Last month, Immotion raised £3.3m at 6p a share in order to finance contracts that have been won for Immotion VR Cinematic platforms to be rolled-out, including at LEGOLAND and Sea Life. A licence has been agreed with China-based LEKE VR for 12 VR experiences in countries that Immotion does not cover directly. This licence is based on minimum annual revenues of £588,000 and Immotion will receive 70% of all revenues generated by LEKE through this and another licence deal.
This week Sure held a presentation and conference to enable investors to find out about the companies that have received investments from Suir Valley.
VividQ is a Cambridge-based developer of 3D holographic displays technology and it is in the process of raising £3m in order to further develop and exploit its technology, which can be used in VR headsets, smartglasses and consumer electronics. VividQ has already developed relationships with chipmakers and hardware manufacturers that will design the technology into new products.
Ireland-based MySafeDrive Ltd, which trades under the Provision brand, provides camera-based telematics services for fleet owners. Up to four cameras can be mounted on a vehicle to provide live video as well as data to fleet managers. If there is an accident, then there will be video evidence of what happened. The founders have already built up telematics firm Edrive before selling it in 2016, so they have plenty of experience – something many young companies lack. The plan is to expand into the US.
WAM Group has developed a platform called Admix, which can place adverts into virtual reality content in real-time in the form of product placements rather than annoying pop-ups. The platform allows advertisers to bid for space and the adverts immediately go into the VR content. Traffic is already building up after just a few months. More cash will be required to cope with the growth in demand.
Artomatix has developed artificial intelligence-based software that can cut out the time-consuming and monotonous work of designing backgrounds in video games. By inputting an example of what is required the software can immediately extrapolate a whole background. The software is not just useful for video games it can be used by other sectors such as furniture makers. Inevitably, the size of the video games market means that it will be a major source of revenues if Artomax can persuade them to use the technology.
Wia Technologies has developed an Internet of Things cloud platform that helps developers to design sensors that can be linked over the internet. This can be done much more quickly and cost less than alternatives. Wia Studios was set up last year to provide prototyping services. Money is being raised to fund expansion in the UK and the EU.
Nova Leah supplies remote monitoring and cyber security technology to medical device manufacturers. Once he manufacturers’ requirement are loaded up, Select Evidence can identify threats and also advise on how to address them. The medical sector is not the only potential customer base for this technology.
Warducks has developed augmented and virtual reality games and is developing a location-based augmented reality game. The two newest games were in the top ten on PlayStation VR.
Sure NAV was 101.6p a share at the end of September 2018, but since then the Immotion share price and the value of the Suir Valley investment have both declined. This is the downside of having two quoted investments, because they have been hit by the slump in the stockmarket. The true value of the quoted and unquoted investments will take much longer to show through – whether it is good or bad.
One or two big successes should cover losses on other investments given the significant markets that they are trying to exploit.
This is a very small fund, with a market capitalisation of £4.5m, and there has been limited liquidity in the shares. The bid/offer spread is 96p/102p. Sure can only be viewed as a long-term investment but it has exposure to more than one investment with the potential to have a significant uplift in value.
There is a danger of chasing the Sure share price upwards, so if you consider buying the shares then be careful not to pay an inflated price.