Local investment fund targets small tech firms with growth potential
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Technology businesses in London now have access to about $2 million to fuel their growth.
About 40 investors came together in London to create the 519 Growth Fund, designed to help small technology businesses scale up to the next level, said Brian Foster, who founded the fund along with Brian Cram and David Brebner.
“I think it is incredibly important,” said Nick Hollinger, founder and chief executive of Visitor Queue, a small tech business that enables clients to track businesses that visit websites.
“We are not getting money from banks. They won’t take a chance on small business and venture capital won’t come near you until you have up to $1 million in revenue. This bridges the gap from staying a small company to being a larger company.”
More investors are coming forward and the fund could hit $3 million by the end of the year, Foster said. It plans to offer $125,000 to $250,000 to businesses and will likely fund 20 to 25 firms, he said.
“A lot of good companies have a tough time finding that early stage capital. We are looking for quality companies and our preference is local, to connect with businesses in this area,” Foster said.
The money can be used to hire staff, fund marketing and help with other costs to get a business to the next level, Foster said. It is working with other business groups in the city such as TechAlliance and London Economic Development Corp. to identify potential businesses.
“We already have a decent prospect pool. We have the potential to get this moving quickly,” Foster said.
One of those prospects may be Mien Tzui, a London company that developed virtual-meeting software and is at a critical point in its growth, owner Derrick Berney said.
“I have been bootstrapping it, paying for everything myself,” Berney said. “I have other businesses that are funding this business. It is a balancing act.”
As for Visitor Queue, it has about 500 clients and its sales will grow by about 80 per cent this year, Hollinger said. It creates “lead generation software” that tracks businesses that visit a website.
“We are still an early startup. It may apply,” Hollinger said. “This will also help keep businesses here. If the support you need is in London, you will stay here.”
Foster is the co-founder of the RH Accelerator in London that helps early stage technology businesses. Cram is a private investor and founder of Janada Inc. that advises investors and businesses. Brebner is co-founder of Mobials Inc., a software development company in London.
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