Italy’s first tech conference to debut in Rome this week
Italy’s first tech conference will begin on Wednesday in the country’s capital city, bringing together investors and entrepreneurs from all over the world in a three day event.
Blast, which will take place from 10th – 12th May, will provide a valuable networking opportunities for 150 of the best global startups in the pre-seed or early stages of funding. Thirty of those will also have the opportunity to enter the Blast Startup Competition, a three-day battle to win a £30,000 cash prize. Blast is in partnership with Fiera Roma, one of the largest exhibition centres in Europe, where the event will take place.
The boutique conference is the first one of its kind to take place in Italy, a country vying to become the next start-up hub. Unlike other major conferences, Blast will focus its events on five main categories; food tech, an obvious choice for the founders after Rome played host to the first startup bootcamp focusing solely on the foodtech industry, as well as Fintech, Artificial Intelligence, Virtual Reality/Artificial Reality and IOT & Industries 4.0.
Crowd2Fund’s venture debt: the new kid on the alternative finance block
In the latest sign of an ever more developed alternative finance market, Crowd2Fund have announced a new venture debt product targeted at established businesses who have a short term requirement to access cash to facilitate their growth.
The interest rates on these loans will be between 10 and 15 percent, with venture debt typically being used for a particular projects such as purchasing new stock upfront, entering a new market or opening an additional retail unit.
The time period required to borrow funds is short, normally for not more than 12/18 months, as associated revenues from the new business activity should trickle through once the project up and running.
The first venture debut campaign to launch on the platform is Planks Clothing, a manufacturer of ski clothes, who are borrowing funds to purchase stock for the next ski season. Specifically, they are choosing to raise venture debt as this ties in with their own working capital cycle, and gives them the flexibility they need to service the debt. Additionally, this means that they won’t have to sell any equity within the business.
What is venture debt?
Venture debt is a form of short term financing, typically used as project based finance for a specific purpose. It differs from traditional debt due to the duration of the loan being relatively short, and due to carrying a higher interest rates, normally at more than 10 percent. It will be typically used by businesses which are already generating revenues, and will be able to service the debt. Unlike traditional debt these businesses do not necessarily have to have two years trading history and revenues over £100,000. Crowd2Fund’s credit assessment of businesses seeking venture debt takes into account reviewing strategy plans of the business, the previous business activity of the founders, as well as the company’s historic trading data. The increased APR of venture debt is indicative of the increased level of due diligence carried out. Whilst this enhanced form of due diligence will mean that only the most credit worthy venture debt deals make it onto the platform, and Crowd2Fund still maintains a 0 percent default rate, some failures should still be expected.What types of businesses is venture debt suitable for?
Venture debt is suitable for earlier stage businesses which are fast growing, typically at a rate of 50 percent revenues year on year, and who would not normally have access to traditional to debt. They key metric is their revenue growth trajectory, typically double digit growth year on year. Whilst these businesses could sell equity to raise funds, this is often not their preferred option due to them not wanting to sell parts of their company, at a relatively low price early on in their lifecycle. The profile of these businesses is high quality, typically run by people who already have a proven track record.Why would a business choose to take out a loan with an interest rate as high as 15 percent?
Whilst a 10 percent -15 percent interest rate sounds high, this is relatively cheap due to the terms of venture debt being for a short period of time, and due to the associated overall interest payments cost being relatively low once this is factored in.
Additionally, businesses suitable for this kind of debt will be able to increase their value during the loan duration due to the nature of them being high growth. Therefore, making the associated debt repayments will be cheaper than them selling equity.
In turn, venture debt is a simpler and faster means of financing than equity financing due to the latter requiring time consuming and costly changes to a company’s legal structure.
What are the implications of venture debt for the investor market?
Venture debt will allow retail investors to participate in a new asset class, generating higher returns than existing comparable products on the market. As these types of investments are riskier than other debt crowdfunding products, only sophisticated investors will be able to deploy funds in these campaigns. The weighting of venture debt opportunities in an individual’s portfolio will be based on their risk appetite and investment objectives. Sophisticated investors with less tolerance for risk will be encouraged to mitigate this by including venture debt as a relatively small percentage of their portfolio.Innovative ski brand Planks seeks first £100,000 Venture Debt on Crowd2Fund
Innovative skiwear brand Planks Clothing is seeking a £100,000 venture debt, payable at an APR of 15 percent to manufacture and purchase stock ahead of the next ski season.
They are the first company to use Crowd2Fund’s new venture debt product which allows early stage high growth revenue businesses to access short term project finance.
The company first began trading in 2009, and was started by Jim Adlington, a former professional skier whose work has taken him all over the world. He was inspired to start Planks when he noticed that the increasing popularity of free-skiing – a type of skiing akin to extreme sports – created the opportunity for a brand to capitalise on the changing reputation of the sport.
The philosophy of the company is comes from a collective passion for skiing, alongside creative functional high quality products, which have a broad appeal to a wide range of consumers who love the mountains. This is perhaps best summed up by the slogan of the company, which is “Drop cliffs not bombs.”
Adlington said, “At Planks, we feel very fortunate for every moment we get to spend in the mountains. Skiing can provide an amazing sense of freedom & creativity. It allows us to express ourselves in any way we like – how we ski, where we go, who we’re with & what we wear.
Planks Clothing is available to purchase through the company’s website and through a range of Planks retail units in key ski resorts in France, such as Morzine, La Plagne and Meribel. Additionally, the product range is available to purchase at third party retailers globally; in Europe, North America and Australasia.”
The Crowd2Fund venture debt loan will allow the company to procure stock for the next ski season ahead of time, with follow on revenues from the new lines allowing the company to pay back the loan.
This will help the business achieve their long term aim of continuing to achieve growth, entering new markets and sports, whilst enhancing company wide efforts to become more conscious about Planks’ impact on the planet by taking a lead on sustainable production.
The company have chosen to raise venture debt on Crowd2Fund due to its ease of use and flexibility, neither of which are provided by traditional finance institutions.
Adlington says, “Crowd2Fund fills a gap in the market that the banking sector is currently unable to meet by providing debt, or short term financing to small businesses. For businesses like Planks that have an annual working capital cycle this provides a great, flexible solution to short term financing needs.”
For more information on the campaign and how to get involved, visit their campaign page here.
Ladbrokes Coral shares plunge after “challenging conditions” lead to revenue fall
“Challenging conditions” on the high street negatively impacted quarterly results are bookmakers Ladbrokes Coral (LON:LCL), who saw total revenue fall 2 percent over the period.
The amount bet over the counter in shops fell 7 percent between the start of the year and April 23, leading to a downwards pressure on revenue. Total net revenue in the UK fell by 2 percent, despite a 5 percent rise in group revenue.
Chief executive Jim Mullen said the retail business continued to “exhibit the negative trends reported since the middle of 2016”, pointing towards the “challenging” conditions on the UK high street.
The group’s online offering remains strong, with sales up 22 percent and helping mitigate the effects of slow over-the-cunter betting.
Mullen continued: “Trading in the period was in-line with our expectations. We see encouraging trends in Digital sportsbook and gaming with continued enthusiasm for our multi-channel products in all our major markets and over a million customers now signed up in the UK alone.” Ladbrokes shares are currently down 4.67 on the news at 122.30 (1544GMT).Euro zone business activity hits highest level in six years
Euro zone business activity expanded by more than expected in the second quarter, according to the latest PMI figures released on Thursday.
IHS Markit’s final Composite Purchasing Managers’ Index (PMI), one of the most important indicators of growth, rose to a six-year high of 56.8 in April. This is a rise from March’s figure of 56.4 and above initial expectations of 56.7.
Chris Williamson, chief business economist at IHS Markit, said:
“The PMI surveys portray an economy that is growing at an encouragingly robust pace and that risks are moving from the downside to a more balanced situation.”
The figure echoes that of Euro zone manufacturing figures released earlier this week, where growth also hit a six year high.
8 Mid-Cap Monsters Shaking off Brexit Blues
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Grocery sector sees welcome boost as growth hits highest in three years
Sales at Britain’s supermarkets have finally started to pick up after a difficult couple of years, reporting the fastest growth in sales in three and a half years over the last quarter.
The UK grocery market grew by 3.7 percent in the 12 weeks to 23 April, according to the consumer consultancy Kantar Worldpanel. Sales were driven by Easter food shopping and price rises driven by inflation, adding almost £1 billion in sales compared with a year earlier.
Prices rose by 2.6 percent over the past quarter, up from 2.3 percent in the three months to the end of March. The positive figures come as a welcome boost for the grocery market, which has suffered from increasing price warfare and the advent of newcomers Lidl and Aldi.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “All 10 major retailers are in growth for the first time in three and a half years, when we last saw like-for-like grocery inflation as high as it is now. While prices do look set to rise further, the current inflation rate of 2.6% is still below the average level experienced by shoppers between 2010 and 2014.”
£325 million was spent on Easter eggs in the period, an increase on last year’s £294 million. Spending was boosted by a rise in teh price paid for the average egg, which grew 8.6 percent to hit £1.65.
Are Islamic markets a safe bet in times of uncertainty?
Islamic markets may be a better bet for investors as uncertainty sends shockwaves through the financial sector, as evidence shows that markets in the region are able to withstand crises better than conventional indexes.
The new research, published in the Pacific-Basin Finance Journal by researchers from Anglia Ruskin University alongside colleagues from Tunisia, the United States, France and Saudi Arabia, found that global financial crises strongly affect cross-market volatility, but due to the presence of Sharia-compliant stocks and Islamic bonds (sukuk) – which operate differently to those in conventional indexes – Islamic markets isolated themselves from non-Islamic counterparts during turbulent times.
This meant they were better protected against potential shocks such as the Global Financial Crisis of 2007/2008, where mainstream markets collapsed simultaneously.
Although there are volatility spillovers into Islamic markets during times of crises, they are significantly weaker that those that affect conventional indexes. For example, the contribution of the Dow Jones Islamic Market US index to the volatility of other Islamic stock markets is 66.56 percent, much lower than its contribution of 91.94 percent to volatility in conventional counterparts.
Furthermore, the analysis of directional volatility spillovers show that the spillovers from each index to other Islamic indexes are below 20 percent during the crisis periods. This suggests the Islamic markets are ‘decoupling’ or isolating themselves from other indexes during times of financial turmoil.
Dr Larisa Yarovaya, Lecturer in Accounting and Finance at Anglia Ruskin University, said: “During the last decade, Islamic assets have expanded in markets across the world, and they operate differently from their conventional counterparts. Our research shows that while these markets are not immune from financial shocks, Islamic markets have a tendency to isolate themselves quickly during times of turmoil, resulting in lower spillovers from troubled conventional markets.
“These findings demonstrate that these markets are safe havens for investors looking to diversity their portfolio and to hedge market risk at times of financial turmoil elsewhere in the world,” Yarovava concluded.
Talk clearly and cut the jargon: the vital ingredients needed for a successful business sale
It’s often been said that honesty is the best policy, and in the case of the mergers and acquisitions market, this has never been truer.
According to business valuation expert, Company Valuation Services, business owners considering a sale should keep things concise and simple in order to stand the biggest chance of success in 2017.
This year is predicted to be strong for mergers and acquisitions, meaning that there are exciting times ahead for those who are interested in selling. But business owners should prepare themselves thoroughly to ensure that they are putting their best foot forward.
According to Gary Edwards, Marketing Manager at CVS, a successful sale is all down to clear communication, transparency and preparation.
“2017 is predicted to have exciting things in store for the mergers and acquisitions market, but that doesn’t mean that business owners should leave everything to chance. The key to a successful sale is preparation, honesty, and a solid idea of how much your business is worth”, he said.
“January saw a high volume of deals being finalised, and it would be fantastic to see this continue into the rest of the year. Preparing for every eventuality and working with experts if needs be can help ensure that your deal becomes part of the success statistics.”
Read the guide in its entirety here.
P2P lending platform Kuflink gain full FCA regulation
UK-based lender Kuflink confirmed on Friday that it has received full FCA regulation, becoming the newest regulated peer-to-peer lender to enter the market.
Kuflink’s peer-to-peer platform offers its clients security within a regulated and authorised framework, joining a similar lending infrastructure to that of the Britain’s big four banks. The lender’s vetting an due diligence system safeguards customers, with a separate credit committee engaged to assess all bridging transactions on the platform.
Kuflink Group also includes Kuflink Bridging, who have been fully FCA regulated since October 2016.entered the short-term finance market to become one of the newest players in the growing sector of alternative finance; so far, only a few other lenders in the property market have been given full regulation by the FCA.
Tarlochan Garcha, CEO of Kuflink, said:
“Today’s announcement comes at an important time for Kuflink as we continue to fortify our position in the peer-to-peer lending and bridging space. Through our hard work and determination, our authorisation from the FCA validates our delivery of a regulated peer-to-peer service that allows our customers to engage and transact in a safe and secure environment.
“I’m excited to announce that we are already preparing to launch an ISA as part of our services next month, and we look forward to supporting our expanding customer base over the course of the year”.