The head of a £500m Chinese venture capitalist fund will be among 250 investors at the annual tech investment showcase EIE in Edinburgh tomorrow. Cocoon Networks, which is backed by China Equity Group and Hanxin Capital, will be represented at the technology investment pitching contest. John Zai, its CEO, launched the fund in London in January and is part of a growing network of Chinese investors with plans to become involved in UK and European start-ups.
For EIE it is a major coup at the same time as the organisers themselves consider plans to host an event in China later this year. Gordon Stuart, Director of Operations at Informatics Ventures, which will put on the day-long event at the Assembly Rooms, said: “We are getting more and more people coming from further afield, from Europe, the States and this year we’re looking to get a few more from Asia, particularly from China, which is obviously a new area. And we are considering doing something in China later this year.”
SIXTY COMPANIES will get the chance to pitch their ideas to an investment community comprising high net worth individuals, at the lower end of the scale with an average £50,000 investment, to large multi-national venture capitalist funds, who may invest up to £2m or more. Pitches will be limited to just a few minutes, and firms vying for cash have been offered the chance to learn some stagecraft by Informatics Ventures, which aims to create a slick event.
“We want them not only to pitch but to pitch in a way that’s impressive and entertaining and leaves an impression on the audience,” says Stuart. “If we manage to get people to come from far afield it’s very important we put on a bloody good show. That is not only content but also the capability of the people to put over their proposition in a way that grabs the attention of the investors.”
AMONG COMPANIES pitching are Edinburgh Molecular Imaging Ltd, which has developed technology which scans the body for diseases in real time, and the Glasgow-based makers of Double, an app which allows couples on first dates to find each other in a way that is intended to make dating safer. Robotical, a firm that has created miniature programmable robots for the educational toy market, will also pitch for investment. Stuart believes the EIE, which also runs a smaller event in London, would benefit from larger investment groups setting up in Scotland.
He added: “The angel community in Scotland is very strong but what we are missing is the follow-on finance for companies that want to scale. A typical digital company can get up and running for around half a million pounds but if they really want to scale up around the world and recruit and open up offices outside the UK that’s going to cost a fair amount of money. People with that level of investment are mainly VCs and we just don’t have venture capitalists located in Scotland.”
However, Birmingham VC firm Mercia Technologies did open an office in Edinburgh in the past six months. Stuart also thinks if FanDuel or Skyscanner – Scotland’s only ‘unicorns’ – go for an IPO (Initial Public Offering), it will generate the level of interest that Scotland needs from the wider investment community. “It would be great for Scotland, but also a whole bunch of tech millionaires will be created and the impact of that will be that a lot of money will be recycled back into the local tech economy and that should allow more companies to start up and therefore more companies coming through. It’s a kind of virtuous circle.”