TOP
Consumer electronics company Jawbone had more than enough money to take on Fitbit and other health-tracking devices in the “wearables” market.
That may have ended up being its biggest problem.
Top-tier venture capital firms Sequoia, Andreessen Horowitz, Khosla Ventures and Kleiner Perkins Caufield & Byers, and then a sovereign wealth fund, invested hundreds of millions of dollars in Jawbone, lifting its valuation to $3.2 billion in 2014.
Ultimately, all that money couldn’t save San Francisco-based Jawbone, which began liquidating proceedings in June after its fitness-tracker product failed to take off. It now ranks as the second largest failure among venture-backed companies, based on total funding raised, according to the research firm CB Insights.
Jawbone’s fall after raising more than $900 million provides a stark example of how the flood of cash pouring into Silicon Valley can have the perverse effect of sustaining companies that have no future, technology executives and financiers say.
The irony is Jawbone could have been a suitable acquisition target some years ago, these people say, had it just kept its valuation lower by raising less money from venture capital and sovereign wealth funds.
“They are basically force-feeding capital into these companies,” said Sramana Mitra, a tech entrepreneur and consultant, and founder and CEO of startup accelerator One Million by One Million. “I expect there will be a lot more deaths by overfunding.”
The Jawbone case also underscores the risks that non-traditional startup investors such as sovereign wealth funds face as they ramp up investments in Silicon Valley. The Kuwait Investment Authority led a $165 million investment in Jawbone just last year, when its prospects had already dimmed to the point that most of its original investors were unwilling to put up new funding.
These funds, which mange funds of hundreds of billions of dollars, invested $12.7 billion in private tech companies last year, up from $2.2 billion the year before, according to CB Insights.
Startup failures are not uncommon, but a billion-dollar company that has raised huge pools of money going belly up remains a rarity. Jawbone ranks behind the solar technology company Solyndra, which became the largest failure among venture-backed companies when it filed for bankruptcy in 2011.
COMPANY OF THE MONTH
Polymateria Ltd
Dr Graham Chapman - CSO
020 7706 6358
ImperialCollege, London I-Hub
WhiteCity Campus
80 Wood Lane
London
W12 OBZ
Based in London and San Francisco, Polymateria design and license time-controlled biodegradation technology for all types of plastics, whether synthetic or bio-based.
Polymateria has labs at Imperial College London’s Innovations I-Hub – the commercialization of next generation materials technology. In 2017 in Uruguay on a trade mission - William Turner from Polymateria presented a solution to tackle the disastrous effect of plastic pollution on the environment.
Through cutting-edge technology, the company produces an additive which enables plastic packaging to be biodegradable and recyclable. Polymateria’s mission is to tackle the crisis of plastic pollution through the power of scientific excellence.
Polymateria is seeking to establish rigorous standards in the area of biodegradable polymers. The team has expertise in polymer science, biodegradation and chemical catalysis. It is collaborating on research programmes with institutions throughout the world including Norner (Norway), Rothamsted Agricultural Research (UK), Tomas Bata University (Czech Republic) and ColumbiaUniversity in New York (USA).
Chairman and CEO is Jonathan Sieff, who has 20+ years experience across retail, manufacturing, and distribution businesses, with a special focus on multi-consumer brands and intellectual property. Prior to setting up Polymateria, Jonathan founded Fashion lab, a dynamic manufacturing group, which was acquired by a global sourcing and logistics company.
CSO Dr Graham Chapman is one of the fathers of oxo-biodegradable polymeric materials with 30 years experience. Graham was Vice Chairman of the Degradable Plastics Council in the USA, a member of the ASTM Degradable Plastics Committee for 25 years, and served as member of CEN Committees on biodegradable plastics. He earned his PhD from ImperialCollege, London, working for Nobel Prize winner Professor Sir Derek Barton, and read chemistry at Cambridge.
ENGINEERING
Zeetta Networks, a UK-based networking technology producer spun out from University of Bristol, has raised £1.6m ($2.1m) in a funding round that included commercialisation firm IP Group.
The round was led by evergreen investment company Bloc Ventures and also included internet of things-focused incubator Breed Reply.
Founded in 2015, Zeetta Networks has developed software-defined networking technology, NetOS, that aims to simplify the control and management of complex ICT systems.
The money will go towards recruitment as Zeetta aims to accelerate commercial traction for NetOS in the enterprise market, particularly as it identifies opportunities in the 5G mobile network operator sector.
The spinout has now raised more than £6m in funding, according to the latest press release, including commitments from the UK’s innovation agency Innovate UK and the European Commission.
IP Group and Breed Reply previously supplied £1.25m in funding in February 2016.
David Leftley, managing partner of Bloc Ventures, said: “We have known the Zeetta team since they spun out from University of Bristol and we were looking for the opportunity to invest in the team and their technology.
“We have been impressed with both the technical and commercial progress achieved to date by the company and we are very excited to participate in this funding round to accelerate the company’s development.”
WaveOptics
Touchstone has committed £3.1m to £12m round in WaveOptics, joing new investor Gobi Ventures and existing backers Robert Bosch Venture Capital and Octopus Investments.
Headquartered in Abingdon, WaveOptics is developing novel optical waveguide technology and modules for augmented reality displays. AR devices enable people to view the world around them, overlaid with relevant digital content.
While a number of major manufacturers are building the full AR systems, including the optics, sensors, camera and head mounted unit, WaveOptics is focused on developing the underlying optics to deliver an “enhanced AR experience”, while solving some of the performance and cost challenges currently limiting AR technology adoption.
Martin Harriman, chairman of WaveOptics, said: “WaveOptics is reinventing the AR market, by developing a series of new AR display technologies that enables a wider field of view and brighter full colour images - a unique combination in today’s market. This funding round further accelerates development of our industry-leading technologies and enables us to launch programmes in new markets and territories.
“We are excited about the team of investors we have on board who share our vision.”
Following this new investment, Touchstone now holds a 23.8 per cent interest in the company.
Robert Bahns, director of technology investment at Touchstone, added: “WaveOptics’ technology has the potential to open up the AR market by solving some of the key challenges to AR technology adoption.
“The Company has made significant technical and commercial progress since the investment round we led in October 2015, with very positive feedback from industry on its initial beta products.
“This new funding will allow the Company to complete its product development and position itself as a leader and key technology enabler of highly compelling AR experiences.”
Deltenna Ltd
Dr Andrew Fox – founder MD
01249 450 910
12 Villiers House
Lansdown Court
Chippenham
Wiltshire
SN14 6RZ
Deltenna is a world-leader in the field of rugged antennas.
The superior performance achieved from our unique high-gain technology has allowed us to develop a range of antennas that cover all common cellular bands. Along with their small size and the use of circular polarization, this gives a “one size fits all” antenna. In addition, the ruggedized design, which is tested to survive a 5 metre drop onto solid concrete, makes these antennas ideal for deployment in emergency situations.
founded in 2002, Deltenna Limited designs and manufactures innovative wireless infrastructure and access points. Our key technology and expertise is in the design of radio and antenna solutions. Deltenna’s products are currently in use across the globe by a range of customers in the fields of public safety and emergency response and are also extensively used for testing and trials of new technologies, including LTE.
Deltenna’s newest product is revolutionizing rural broadband. The WiBE (Wireless Broadband Extender) uses multi-beam antenna technology to extend the range and throughput of a 3G mobile network, taking the Internet to places where it hasn’t gone before. The WiBE was two years in development and after rigorous technology and commercial trials with lead customers became commercially available in October 2010.
Andrew Fox founded Deltenna in 2002, having previously worked extensively in the fields of radio and antenna design at the prestigious Bell Research Laboratories. Since then he has built a successful business, guiding the development of a series of innovative products and engaging with customers worldwide. Andrew holds a B.Eng (Hons) in communications engineering and a PhD from LeedsMetropolitanUniversity in the field of Microwave Dielectric Resonators and is named as an inventor on more than 16 issued and pending patents.
Hub Network Services Ltd
John Volanthen - CEO
0117 9200045
St Brandons House
29 Great George St
Bristol
Avon
BS1 5QT
In July 2107 Bristol City Council opened 1Gbps ‘full fibre’ network to local businesses - the council will use funds from the project to fund network expansion.
The network is 80km long - Bristol City Council has chosen wholesale network provider Hub Network Services (HNS) to speed enterprise internet connections. Small businesses will be able to connect to the council’s own BNET duct fibre (FTTP) network, which covers most of the city.
The re-purposed network was originally owned by cable TV company Rediffusion; Bristol council acquired it to run its own services in the early 00s, such as telephony and CCTV cameras. Commercialisation began in 2015, when the council signed a 20-year joint venture agreement with ITS Technology Group and Net Support; under the agreement, unused capacity is rented out to local firms. The joint venture partners have taken on HNS to offer ultra-fast services through local ISPs, while also offering 24/7 monitoring and support.
John Volanthen, CEO of HNS, said, “With its already extensive footprint, BNET is ideally suited for quickly connecting businesses of all sizes to the internet, including the many media, marketing and software firms in the area with particularly large bandwidth requirements; as well as large multi-tenant office buildings and corporate premises.
“Apart from sheer speed, low latency and low cost, BNET also offers a reliable, fully supported and very secure Internet connectivity solution.”
Revenues received from the service, which costs around £350 plus VAT per month, will go toward funding other projects in the city. The council also plans to extend the network by up to an additional 96km. No time scale has been provided for these plans, though. There are currently around 60km of unused duct in the network, which could be reactivated for such an extension.
Graphcore
British chipmaker Graphcore has raised more than £23 million as it bids to develop its first artificial intelligence-focused chips. Total investment in the company now stands at around £48 million, with one or two high-profile backers splashing the cash on the West Country firm.
Among those willing to put up their cash are Google Deepmind’s CEO Demis Hassabis, Uber chief scientist Zoubin Ghahramani, who is also a professor at the University of Cambridge, and the cofounders of Elon Musk’s AI research firm, OpenAI. The company was also backed by corporates like Samsung, Dell, and Bosch in a series A funding round in 2016.
Graphcore CEO Nigel Toon said it was invaluable to have the support of such great innovators. Graphcore claims that its chips will allow researchers to develop new forms of AI quicker and more efficiently, than on GPUs or CPUs, which are largely used today. The money will be used to scale up its team from 60 people to 120 people by the end of next year.
“Building systems capable of general artificial intelligence means developing algorithms that can learn from raw data and generalise this learning across a wide range of tasks,” said Hassabis. “This requires a lot of processing power, and the innovative architecture underpinning Graphcore’s processors holds a huge amount of promise.”
Greg Brockman, cofounder and CTO of Open AI, said: “Training machine intelligence models in minutes rather than days or weeks will profoundly transform how developers work, how they experiment and the results they will see. Being able to experiment across a much broader front, at a much faster pace will create new breakthroughs and will allow us to combine many machine intelligence techniques to jumpstart progress.”
CHEM MATERIALS
torc2 Ltd
Gary Blundell and Ron Taylor – directors
01926 351 069
Unit 33, Bilton Industrial Estate
Humber Avenue
Coventry
Warwickshire
CV3 1JL
In July 2017 thisCoventry company claims to have created a world-first form of plastic that could “revolutionise” the way limb conditions and injuries are treated.
Torc2 Ltd, based at the Bilton Industrial Estate, has protected the intellectual property (IP) on the material as well as a new process method using their flexible, durable compound that can be re-shaped at temperatures safe for patients.
Gary Blundell and Ron Taylor, who are part of the team that runs the business, have a background in engineering and plastics and originally developed the new material as a potential replacement for Plaster of Paris casts.
However, after seeking opinion from the medical profession including surgeons at University Hospital Coventry & Warwickshire, the pair turned their attention to devices such as splints and supports for the treatment of cerebral palsy, talipes (club foot), hip dysplasia, idiopathic toe walking and liners that can be reshaped for lower limb prosthetics.
Blundell said: “The key property of our torc material is the fact it can be softened at low temperatures. It can be reshaped directly on the patient at around 55 degrees and, therefore, the types of products we are looking at can be altered to exactly fit the patient very quickly, easily and without waste.”
BIOTECH
LiDCO plc
The hemodynamic monitoring company, confirms the appointment of Jill McGregor as CFO. Ms McGregor is a Chartered Accountant and has over 25 years’ experience in a number of finance roles. Ms McGregor joins LiDCO after six years as CFO of Touch Bionics, a UK based provider of upper limb technologies, with operations in the USA and Germany, recently acquired by Össur. Prior to this, Ms McGregor spent seven years at Optos plc, a provider of retinal imaging devices, as Group Financial Controller and then as Vice President and Director of Finance. Optos listed on the London Stock Exchange in 2006 and was acquired by Nikon in 2015. FYJan18E rev £9.5m, £0.7m loss. (LID.L)
In July 2017 biotech company Angle unveiled the trial results of a potential breakthrough blood test for diagnosing ovarian cancer.
The test could lead to quicker diagnosis and referrals for women with malignant tumours to specialist surgeons.
Angle, an AIM-listed liquid biopsy specialist, said its new test proved 95pc accurate at detecting cancerous cells in the bloodstream in a study of 400 patients in Europe and the US.
It was also nearly twice as effective as current tests at identifying false-positives.
The test could help doctors differentiate more easily between malignant ovarian tumours - around one in ten cases - and benign tumours, allowing more cost-effective referrals to a specialist or general surgeon as appropriate.
In the UK alone 7,400 women are diagnosed with ovarian cancer each year.
Angle founder and chief executive Andrew Newlands said liquid biopsy had the potential to “transform cancer care in the future”.
“Through a simple blood test, it will be possible to provide repeat testing of patients’ cancer,” he added.
Commenting on the trial results, Louise Bayne, an ovarian cancer survivor and chief executive of ovarian cancer support charity Ovacome, said she was encouraged the test had “the potential to make the significant leap forward in diagnosing this difficult to detect disease”.
IT TECH
PlayStack Ltd
Harvey Elliott - CEO
020 7118 1618
56a Poland St
Soho
London
W1F 7NN
In July 2017 PlayStack announced the hire of Rob Crossley in the newly created role of Head of Developer Partnerships.
Crossley’s near decade long experience in the game’s industry spans both media and investment which has seen positions at, among others, Edge, Develop, Gamespot, BBC and most recently as Head of Games at Creative England.
While at Creative England, Crossley launched and managed a number of developer focused initiatives including GamesLab Leeds, a £1 million investment program for indie games developers based in the Leeds City Region and an indie games investment partnership with Microsoft, securing six-figure funding for two titles. Furthermore, he also established the company’s co-publishing strategy, which resulted in co-investment deals with other publishers and investors.