Freddie Achom: 2017 ‘a storming year’ for venture capital investment | European CEO
The Rosemont Group founder and CEO outlines his hopes for VC in the UK and Europe
2016 was a record year for venture capital investment in Europe. Businesses raised €16.2bn – up 12 percent on 2015. Freddie Achom, founder and CEO of Rosemont Group, takes a look back at the trends of the last 12 months, and suggests where the UK and Europe may be heading. You can watch more of our conversation with Freddie, where he discusses how crowdfunding is disrupting the venture capital industry, and how Rosemont Group is innovating in the private equity space.
European CEO: 2016 was a record year for venture capital investment in Europe. Businesses raised €16.2bn – up 12 percent on 2015. Joining me to review and look ahead: Freddie Achom, founder and CEO of Rosemont Group.
What trends have you seen in VC and private equity, and where do they point for the next 12 months?
Freddie Achom: Over the last 12 months we’ve seen a fluctuation of investments: due to Brexit and due to presidential elections, both in the US and in France, we saw a slowdown.
But 2017 has been a real revelation. A storming year: £800m invested in startups in the first quarter in the UK. Although the deal sizes have been larger, the number of transactions have been less. But that’s not only in the UK, that’s a trend that’s global.
So in the VC sector and private equity, I think they’re just pulling their socks up, and keeping going. Which is phenomenal, really.
European CEO: What are investors’ current views of the UK, and what do they anticipate for the next couple of years?
Freddie Achom: I think investor views of the UK have been really positive, and I think the outlook for the next few years has been also quite positive. There was scepticism, apprehension, since the various economic uncertainties. I wouldn’t say it’s gone… but we’ve learned to live with it. And we’ve learned to keep politics out of our business plans for the next coming years.
Transactions have been fluid. You’ve had Softbank acquire Arm Holding for £24bn. Skyscanner sold to the Chinese for £1.4bn. Currencycloud raising £20m. You’ve got Funding Circle also raising £82m. All these point to continued M&A activity, which is always a great sign.
The Americans have looked at the weak pound and seen it as more bang for their buck, so you’ve had the Americans come in as well. That in itself is a very, very positive sign. And I think as more IPO activities open up in the course of the next 12 months, there’ll be more liquidity in the market, and therefore more transactions.
What changes should we see in Europe as a result of the recent regulation changes around venture capital funds?
Freddie Achom: We’ve had a reform in the European venture capital fund regulations where they’ve allowed fund managers with €500m or more in assets to be able to invest in small-to-mid-cap regulated companies, whereas previously it was only the unregulated SMEs. So that in itself allows more economy of scale for the investor.
I hope personally for more unified regulations, or continued unified regulations. That way it does not deter European VCs from coming into the UK. Governments understand what’s required, and they know it’s all about making sure we give incentives to these businesses, to keep investing in UK businesses. And I think definitely that’s one thing the UK is very good at: creating initiatives and enterprise schemes. And I think there’ll be more incentives like that, that will help UK businesses.
Freddie, thank you very much.
Freddie Achom: Thank you very much.