Also in this issue, new investments:
• Vieve
• Ro&Zo
Plus highlights from the portfolio, including:
• Peckwater Brands
• OnePlan
• Hackney Gelato and more...
As we reflect on 2022, it is clear to us that it has not been all doom and gloom. As in previous times of economic uncertainty, ambitious founders and management teams grasp opportunities that ensure their businesses not only survive, but in many cases, thrive. We are proud to partner with many of these founders.
Pembroke VCT is a £200 million fund with a maturing portfolio of 48 growth-stage companies. The Pembroke team endeavours to help founders at every stage of their companies’ growth, enabling and accelerating their vision. Although there are uncertainties for 2023, our portfolio companies continually evolve their strategies to take advantage of new opportunities. Today we have ten portfolio companies that are individually valued above £50 million, compared to only two companies in 2019.
In many of our portfolio companies there have been significant wins in acquiring direct customers but also striking up relevant collaborations and B2B deals. In our view, a purely D2C offering vastly limits the growth
potential of a business. Many of our founders and management teams are now looking at new ways to acquire consumers, from collaborations with other brands and influencers through to B2B strategies. For example, Dropless was previously a D2C car washing service which has now shifted its focus to a B2B fleet washing service. We also have many portfolio businesses partnering with each other to achieve more robust and scalable income streams.
Pembroke VCT now targets an annual dividend of 5p per share, an increase from 3p per share in 2021/22. We recently announced a 2.5p interim dividend, which will be declared in April and paid in May 2023. This is the second of two dividends connected to the exit of ME+EM in 2022 and is expected to return approximately £5 million to shareholders.
In this issue, we are delighted to tell you about our new investments into Ro&Zo and VIEVE, as well as provide some exciting updates from the portfolio including Peckwater Brands, Smartify, LYMA, OnePlan, Dropless, Hackney Gelato and more.
Date of investment: November 2022
We have invested £1 million into VIEVE, the makeup brand transforming the cosmetic landscape, as part of a £5.5 million Series A round. Investing alongside Pembroke VCT are Venrex and Samos (the early-stage investors in Charlotte Tilbury) and Active Partners.
VIEVE was born from artistic passion and purposeful belief in the positive impact makeup can have. Makeup artist and beauty digital creator Jamie Genevieve, who has an engaged following of over three million social media followers, established VIEVE in 2020 to deliver high-performance yet accessible products to the beauty community.
Meaning ‘full of life’, VIEVE was founded to empower and encourage ‘all make-up wearers’ with its inclusive range. Curated around a refined vegan, paraben, gluten and cruelty-free formula, VIEVE has grown quickly from a select range of high-performance staples to a considered portfolio for both everyday wear and artistry.
VIEVE’s impressive growth to date is testament to Jamie, Emma and the world-class management team they have built around them. The business is a great example of a brand leveraging community and content to engage with its customers and develop products they love to use. We are delighted to join VIEVE for the next phase of growth and look forward to working with the team on building the brand as it expands its product range and scales internationally.”
Fred Ursell Investment Director of Pembroke Investment Managers LLP
At the heart of VIEVE is a passionate team led by CEO Emma Dawson, a beauty industry expert with significant experience at L’Oreal LUXE which she left in 2017 to set up her own boutique PR agency before taking on her role at VIEVE. The investment will be used to further build out the team’s expertise, develop products and expand the brand globally.
VIEVE successfully launched its ‘Essential Collection’ online in November 2020. It now plans to extend its product offering to appeal to more customer needs and launch to new markets, with the US and Australia being the initial focus.
I feel a responsibility to the beauty community to ensure VIEVE is delivered to give each person the best experience possible tailored to their uniqueness. We’re pleased this latest round of investment will enable us to take this message further across the world.
Jamie Genevieve Founder and Chief Creative Officer of VIEVE
Accessible womenswear brand Ro&Zo was established by co-founders Rosie Bowden, Zoe de Abreu and CEO Rachel Heather in the aftermath of the pandemic to fill a gap in the market left by the closures of a series of major high street brands.
Already stocked by major retailers including Next and John Lewis, Ro&Zo creates responsible, trend-led pieces for women spanning many age groups and sizes (6/20), leveraging decades of manufacturing experience with a strong focus on quality.
Ro&Zo’s approach is unique in that it draws on its significant experience as a supplier and buyer for major high street brands, transitioning from manufacturer to brand rather than vice versa. This gives the business a detailed understanding of garments, the high street and what customers want.
This round of investment will help Ro&Zo drive its direct-to-consumer business by raising awareness of its brand, developing its operations capability and scaling the business in the UK. As part of this expansion, Ro&Zo is looking to launch its first high street store to provide an experience-driven, high-quality omnichannel experience. It is using data to find the best location suited to its customer profile.
Today there is a strong demand in the market for accessible, quality fashion that can be versatile while still being stylish. Ro&Zo’s styling is about attitude not age and we believe in supporting the next generation of businesswomen. We have established a strong understanding of our customers and are excited to gain this funding from Pembroke VCT to grow and better serve their needs.
Rosie Bowden co-founder of Ro&ZoIn these unprecedented retailing times, it was going to take an extraordinary fashion brand for Pembroke VCT to invest in this sector. When we met Rosie, Zoe and Rachel we realised they had done something unique – they had turned their wealth of experience in supply chain and eye for design into a new omnichannel fashion player. The business has performed strongly in major retail stores and we look forward to working with the team to drive its DTC offer and launch its first physical store.”
Andrew Wolfson CEO of Pembroke Investment Managers LLP”
This is such an exciting development for us. With eatclever, we have acquired the virtual brand delivery market leader across Germany, Austria and Switzerland, which is a tremendous opportunity to increase our presence in central Europe. We’re thrilled to bring eatclever’s excellent selection of brands under the Peckwater umbrella. In the past 12 months we’ve greatly accelerated our international expansion, boosted by our Series A funding round last summer. We’re now in seven new markets and working with hundreds of new clients – kitchen operators across Europe. The DACH market is a promising new arena for us, and this acquisition further cements our position as Europe’s leading virtual food brand operator.
Sam Martin Co-founder and COO of Peckwater Brands
Since we backed Peckwater Brands in 2021, the business has continued to go from strength to strength.
Peckwater launched less than three years ago but has rapidly built an offering of virtual food brands found on third-party delivery platforms such as Deliveroo and Just Eat.
The business has acquired Hamburg-based eatclever, which serves the DACH region, covering Germany, Austria and Switzerland. The deal adds a further 100 sites to its portfolio.
The international expansion has been fuelled in part by a £15 million Series A funding round completed in June 2022, backed by Pembroke VCT, Stonegate Group, SBI Investments and Fuel Ventures.
This acquisition is the company’s second in six months having bought Honest Food Company from Delivery Hero in September 2022. Following the latest acquisition, Peckwater and the brands under its ownership will operate across 12 countries spanning Europe, North America and Asia.
Having been named as an Official Supporter for the Paris 2024 Olympic and Paralympic Games last year, OnePlan continues to go from strength to strength. The innovative platform launched only four years ago yet has helped create over 25,000 events worldwide.
OnePlan has announced a new partnership with World Obstacle, another International Federation. The business is soon to establish a partnership with USA Triathlon, extending its reach and impact within the sports industry. The event tech business also won Best Festival Technology at the 2022 Event Technology Awards for the third year running.
There are many reasons why Hackney Gelato is the UK’s fastest-growing ice cream brand – strong team, fantastic new product development and numerous new listings. But the main reason why Hackney Gelato is a step ahead of the rest is that before its products were sold in shops, they were served in restaurants.
The brand’s first customers were chefs. Top chefs are precise and demanding. The gelato therefore had to be exceptional to make it onto their menus. And it still is today, proven by the brand’s 40 Great Taste Stars and number one ranking for ice cream brands on Ocado.
Since 2015, Smartify has been the go-to destination for arts and culture lovers to learn more about the artwork they’re looking at. The museum app, which can instantly identify over three million artworks, doubled its revenue in 2022 and expanded the business by offering merchandise.
Smartify has launched a new version of the app, implementing a brighter and more accessible design. The new tech includes an updated analytics engine with a revamped dashboard that gives Smartify’s partners more control over their collections.
The business launched an audio guide for the Royal Academy of Arts’ major exhibition, Spain and the Hispanic World. Smartify has provided a bring-your-own-device solution that makes the guide transaction as smooth as possible: fully integrating with ticketing and using QR codes to make the walk-up transaction quick and easy.
The business has also expanded its offering to include merchandise, selling art prints and limited editions, from some of the biggest cultural institutions around the world. Whether you are looking for a Van Gogh to hang in your living room or a new hoodie for the winter, Smartify have got you covered.
Dropless is one of the fastest growing mobile fleet repair, maintenance and valeting businesses in the UK. The business has developed the technology, techniques and workforce to bring the car servicing industry into the modern era with a digital and sustainable approach. They recently closed a successful £1 million Seedrs funding round, which was overfunded by 116%.
Dropless is continuing with its strategy shift towards an increased focus on B2B. An agile and tech driven way of working, combined with excellent customer service and environmental credentials make Dropless stand out from its competitors. The rapid service delivery minimises downtime for fleet customers and facilitates extensive cost savings and improved customer satisfaction. B2B revenues have as a result increased eightfold in the last 12 months.
The successful shift to B2B demonstrates the company’s ability to be agile and ensures the business moves towards more robust and scalable income streams.
We are looking forward to seeing what the remainder of 2023 brings for Dropless as it continues its impressive sustainable growth.
2022 has been an exceptional year for LYMA. After 18 months of regulatory compliance the LYMA Laser was granted U.S. FDA clearance in May – the first ever, clinic-grade beauty laser to be cleared by the FDA for home use. On the day of launch LYMA received over $1.5 million of orders and the device is now a firm favourite for Hollywood A-listers including Kate Hudson, Kim Kardashian and Naomie Harris. The demand from the US exceeded expectations and has raised awareness of the brand to help drive 100% growth in the year.
During 2022, LYMA achieved B-Corp certification, the first beauty device manufacturer to achieve this. It has won numerous awards, including ELLE Future of Beauty and Marie Claire’s Best Luxury Skincare Device, while also winning categories in Ebony magazine and Harper’s Bazaar.
It has also been a strategic year in the development of the business. LYMA has scaled up the team, implemented a global supply chain infrastructure and accelerated new product development. Looking ahead to 2023, LYMA will be launching additional products to support its ambition to become the world’s first superbrand of wellness.
BOAT International is operating well beyond pre-pandemic levels, with events and bookings accelerating through to 2023. This includes the Monaco B2B events and the BOAT International Party, which were both sponsored by Neom at £1.4 million. Events are expanding rapidly with 39 executions scheduled for this year.
In 2022, BOAT reported the highest full-year revenue since 2008. The business has already forecast 2023 to deliver high-revenue growth, mainly due to the additional event offerings, including a new on-water event in the Caribbean. Digital revenues are accelerating with a focus on more creative solution sales, including a new luxury revenue stream which builds engaging visual stories through spectacular web content.
Cydar Medical is poised to enter a pivotal stage. We are actively leveraging our one-of-a-kind platform and capabilities to rapidly expand our intelligent surgical maps offering through additional value-add capabilities and the growth of our user base. As we strive to realise our vision of creating a comprehensive ecosystem of products, tools and services to elevate healthcare delivery, Cydar’s technology platform will be the foundation for a future of successful surgeries.
2022 was a transformative year for Cydar Medical, a cloud-based surgical software company with a global reach. By leveraging cutting-edge artificial intelligence technology, Cydar provides novel integrated solutions to every step of the patient journey in image-guided minimally invasive surgery (MIS).
This year, Cydar successfully completed a Series A funding round, raising over £9.3 million, including a £3 million cornerstone investment by Pembroke. With these funds, Cydar will be able to expand its capabilities and further propel its 3D surgical maps product, Cydar EV Maps, internationally.
This year, Cydar will complete the development of more advanced product features, using AI to allow clinicians anywhere to access insights from past procedures globally to better inform and optimise patient care decisions.
In January 2023, Cydar appointed Ken Hitchner as Non-Executive Chairman. He brings over 30 years of strategic healthcare advisory experience, having held a number of senior positions at Goldman Sachs, including Global Head of its healthcare banking activities.
For the third year running, Popsa was included in the prestigious ‘Deloitte’s Top 50 UK fastest growing companies’ list – a fantastic achievement by the whole team.
In November last year, the business launched Popsa for Web, allowing customers to order Christmas ornaments. Product development is happening rapidly: the Photo Tiles product is now live on this platform and Photobooks will be launched in Q2 2023.
In December 2022, Popsa recorded its most profitable month ever, beating the previous most profitable month – November 2022! The US continues to be its largest market.
Secret Food Tours continues to impress with significant growth after having mothballed during Covid-19. The business has beaten its pre-pandemic numbers by 40% so far and is aiming to grow another 50-70% this year.
Secret Food Tours recently acquired one of its competitors in Miami, Art Deco Tours and Little Havana Tours, and is successfully integrating it into the business.
The business plans to expand further by launching in several new cities around the world, including Milan and Seattle, while searching for more acquisition targets.
The business launched partnership schemes with Vodafone and the Nextdoor app. The Vodafone partnership proved very successful in providing customer traffic to Popsa’s recently launched web app.
Most importantly, Popsa continues to strengthen its drive to be a first-party data company. Customers are augmenting their photo library data by manually adding personal data to the Popsa platform, such as birthdays, anniversaries, and the names and relationships of people close to them. The company calls this the ‘Popsa Experience Graph’ and anticipates this could evolve into something as powerful as Facebook’s social graph over time.
We recently hosted a branding workshop for our founders and senior management teams from the portfolio. People are 22 times more likely to remember facts when they are delivered in the form of a story. The workshop therefore focused on how to build a compelling brand through storytelling.
The session was run by Kate Hamilton and Lucinda Toole from brand strategy agency, Sonder & Tell. Kate and Lucinda guided the audience to help them find out what makes a good story and how companies should apply this structure to create an authentic brand.
The session took founders through the following framework:
• Your Hero – who is your customer?
• Your Journey – your hero is going on a journey of transformation, but they need a guide.
• Your Guide & Magic Power - the USP of your brand will help the hero on their journey.
Thank you to all our founders and management teams who attended the morning for a very insightful session led by Sonder & Tell.
