Plugging ‘The True Equity Gap’ for Technology Start-Ups is our USP, says Rosemont Group CEO Freddie Achom Rosemont Group Capital Partners, the London based seed and early stage venture capitalist firm last year announced its intention to invest in as many as 20 start-up and early stage technology companies. Its target was to do so within 2 years, with a primary investment focus on consumer Internet, digital content, advertising, marketing, and commerce. To some this would seem like a tough or near impossible possible task given the precariousness of the investment sector at present, particularly for a reasonably small firm. The group invests capital through direct equity investments, convertible loan/notes, options, warrants or preferred shares and invests on its own or with co-investment partners. So far the firm has achieved some enviable success and insists there is more to come in the very near future. “The focus of the fund is to back innovative technology ventures with potential for exponential growth, providing seed funding for start-ups. Why start-ups and especially at the widely considered riskier seed level, some may ask? This is where we feel we can add the greatest strategic value and see potential for greater financial return,” says Rosemont Group’s CEO, the Nigerian-born British Investment Entrepreneur, Freddie Achom. “We are still relatively young within the space and continue to accrue experience with every investment we make, this is achieved by working closely with the founders we invest in and believe in 1000 per cent.” Unusually Rosemont Group’s business model is to adopt an element from ‘accelerators’, which apply less standard sizes of investment and offer greater executional assistance to digital SME's. The tech investment sector In the UK has seen the launch of programmes such as Seedcamp achieve good level of success, emulating those of US based accelerators like YCombinator, Betaworks, Techstars and LaunchBox to name a few. However, typically these programmes have served to increase the flow of new start-ups rather than specifically addressing the funding gap that Achom believes exists. With a strategy to target what Achom calls ‘the true equity gap’, generally businesses seeking less than 1 million pounds in financial capital and as little as 50 thousand pounds, the group has achieved good success so far. Given the unique characteristics of early stage Internet companies, Rosemont Group carefully screens and evaluates them prior to investment, then accelerates and maximises their portfolio companies’ executional prospects by working directly with them. “We specifically target early stage businesses which fall within or often below the conventional equity gap, accelerate the growth of these companies and create sustainable businesses as well as a proven investment model,” says Achom. Last year alone Rosemont Group has seen one of its portfolio companies, social media management tech start-up JustGo, acquired by Tunecore, one of the leading digital music distribution and publishing administration providers in the US. Achom was pleased with the transaction but remained tight-lipped about the details of the deal, only saying ‘it was a liquidity event so we are happy investors.”
A recent investment for Rosemont Group was in what is now the UK’s number one parking app, AppyParking. “Rosemont Group was the first and only money in at seed stage, which we are very proud of. We demonstrated our willingness to back innovation we believe in, ” explains Achom. Aviva ventures the venture arm of Aviva insurance lead the next round of investment into AppyParking with a 1 million investment and more recently the company has recently raised further 10 million pounds on a 30 million post-money valuation. Another investment saw Rosemont Group invest in a Pakistani tech start-up alongside Sunbridge Capital and Telefonica’s accelerator programme. A factor that Achom feels brings the balance in their favour is that Internet and digital technology companies require less operating capital to develop working products and solutions than other more traditional businesses. They typically do not have large capital expenditure requirements, don’t produce or manufacture hardware or tangible goods, rarely hold inventory and do not have returns or leakage to contend with. Achom concludes by saying “recent industry trends such as using open source software for building business services, cloud computing for storage or processing requirements and distributed flexible teams all contribute to the unique ability of digital SME's to start a project, product or company within months or even weeks for less than the amounts typical VCs look to invest. There is a gap and we aim to achieve as larger market share of this space as possible.”
ABOUT ROSEMONT GROUP CAPITAL PARTNERS: Rosemont Group Capital Partners LLC is an early stage venture capitalist firm co-founded in 2003 by British entrepreneur and venture investor Freddie Achom. Its portfolio is as wide ranging as digital technology, bio technology, solar technology, financial services, land and property development to more high profile ventures in the entertainment sectors. Rosemont Group is headquartered in London with international offices in New York and Mumbai. Rosemont Group is actively seeking interesting ideas, concepts and businesses to invest in and should be contacted via their website: http://RosemontGroup.net/contact We are social:
Published on Feb 16, 2017
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