By Ryan Weeks on Tuesday 13 December 2016
Oval Medical delivers exit to investors via trade sale roughly two and a half years since crowdfunding.
SyndicateRoom, the angel-led equity crowdfunding platform, has notched its first ever exit. Oval Medical has been acquired by global pharmaceutical device manufacturer SMC Ltd. The company raised a little over £1.1m on the SyndicateRoom platform in August 2014, with 40 investors contributing.
SMC has elected not to disclose how much it paid for Oval Medical, and as such we are somewhat in the dark as to how SyndicateRoom investors have fared. The platform confirmed that its investors have made a return, calling the acquisition a “successful exit”. But that was as much as was shared.
Oval was set up in 2008 by Matthew Young, the firm's chief technology officer. The company produces cutting-edge auto-injector technologies, including a Epinephrine injector for treating patients for anaphylactic shock.
SMC’s rationale for acquiring the company was to build on its existing business in the drug delivery device market.
“SMC ‘s years of experience in medical device contract manufacturing paired with Oval’s innovative approach to drug delivery combination products creates a complete solution for the pharmaceutical market,” said Chetan Patel, CEO of SMC Ltd.
The Cambridge-based Oval was incorporated in 2009, making it reasonably mature – by the standards of the wider equity crowdfunding space – when it raised money on SyndicateRoom in 2014. Drawing on its recently launched “Where are they Now?” report, AltFi Data tells us that the Oval round was EIS eligible and that the pre-money valuation at the time of the fundraise was £3m.
In two years of tracking the status of successful fundraisers across the equity crowdfunding space, AltFi Data has twice categorised Oval as a “green”, which simply means that the company is still trading and that investor capital has not suffered impairment (in the form of a down-round).
“This is an incredibly proud moment for SyndicateRoom and fantastic news for the investors who chose to buy into Oval two years ago when it raised through the platform,” said Gonçalo de Vasconcelos, CEO of SyndicateRoom. “It also proves that our unique investor-led model, where all SyndicateRoom investors had access to the same class of share and the same price per share as the lead investors, are enjoying the rewards of this acquisition fairly.”
The UK’s equity crowdfunding sector is slowly starting to rack up exits, but not all of these have come covered in glory. Seedrs alumnus FreeAgent recently staged an IPO on the AIM which equated to a down-round for the platform's investors. Oval Medical’s successful exit is a more encouraging development, but its capacity to build confidence in the asset class will be lessened by the absence of key investor metrics.
The most recent iteration of AltFi Data’s “Where are they now?” report, published in November, calculated a 19.14 per cent IRR across the industry, rising to 33.79 when adjusted to EIS/SEIS relief.