Edge Creative Enterprise Fund is first British Business Bank-supported fund to address ‘funding drought’ for creative industries
Edge identifies trends and technology advances which will impact the sector, backs and mentors companies which will benefit
Edge Investments, a leading creative industries investor, has raised a new £40m fund, with UK Government support, to invest in high growth companies in the creative industries.
Edge’s new Edge Creative Enterprise Fund brings together private sector funding from leading institutions and high net worth individuals, with a significant investment from the Government’s British Business Bank.
Edge Creative Enterprise Fund’s purpose is to nurture and assist creative businesses to grow. By their nature, many of these companies start with a small number of employees, and a high degree of entrepreneurial flair. Edge provides the crucial capital and mentoring skills to stimulate growth and innovation at these firms. In this way Edge will create growth and returns for both the management teams of its portfolio companies and its investors.
The creative and cultural economy is an important and growing part of the global economy, and Britain’s creative industries sector is thriving: the creative economy accounts for approximately 10% of the entire UK economy and provides 2.55 million jobs; this employment is growing four times faster than the economy as a whole.
The fund will target investments in the creative industries, in essence companies which trade with creativity, knowledge and information. The key aspect which these businesses have in common is the creation, acquisition, management and commercial exploitation of intellectual property, which translates into economic value.
The sector is characterised by the opportunity to build scalable revenues. Nimble businesses produce content that can be sold multiple times globally, whilst new technologies continue to provide impetus within the sector.
Edge Creative Enterprise Fund will back fast growing and revenue generating small and medium-sized creative companies, which have access to core intellectual property assets which Edge believes are poised to benefit greatly from the growing digital economy, and which can be scaled.
The fund is targeting a minimum three times return for its private investors over its 7 – 10 year life.
David Glick, Edge Investments CEO, said: “The creative industries are one of the UK’s great success stories, an area where Britain excels. Our view is that a high degree of sector knowledge mitigates risk and also allows us to assess the most promising opportunities and most talented executives.
There are nearly 160,000 creative industries businesses in Britain yet despite being in this high growth sector, many of them find it difficult to attract adequate capital to maximize their potential. Our new Edge Creative Enterprise Fund aims to fill that funding gap. Edge Creative Enterprise Fund will bring much-needed growth capital to smaller businesses in the creative industries, and we are grateful to the British Business Bank and all the fund’s investors for their support
Ken Cooper, Managing Director, Venture Capital Solutions at British Business Bank, said: “This is the first fund specifically focused on the creative industries backed by the British Business Bank. We look forward to working with Edge Investments, which has extensive experience in this sector and a proven track record. The creative industry is of increasing importance to the wider UK economy and we are particularly pleased that this fund will ensure these high-growth businesses have access to the finance they need to scale.Ã‚Â
The new fund will be formally announced at the launch event for a new finance guide for the sector, Creative Industries a Routes to Finance, at the National Theatre this morning. The new guide, jointly published by the ICAEW and the Creative Industries Federation, draws on insight and expertise from organisations across the creative industries.
Edge Investments is one of the UK’s most dynamic and innovative specialist investors in the creative industries. Since its launch in 2006 it has raised approaching £200m. Its previous investments have included live events featuring Jennifer Lopez, Eric Clapton, Leonard Cohen, the Rolling Stones; children’s entertainment (The Clangers, Beast Quest, Poppy Cat), native in-video advertising (Mirriad) and games analytics (deltaDNA).
Core to Edge’s approach is its experienced team of creative industries and investment professionals. Its investment team includes Edge Investments’ CEO and renowned deal-maker David Glick, experienced VC technology and creative industries investor David Fisher, Gordon Power, former CEO of ProVen, Charles Miller Smith, former Unilever director, CEO and chairman of ICI.
Individually and collectively, the Edge team has been investing in venture capital since 1984 across 11 separate funds and has achieved a combined venture capital IRR in excess of 30%.
About the British Business Bank
The British Business Bank was established to make finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity. Its objectives are to:
- Increase the supply of finance available to smaller businesses where markets don’t work effectively
- Help create a more diverse and vibrant finance market for smaller businesses, with a greater choice of options and providers
- Build confidence in the market by increasing smaller businesses understanding of the options available to them
- Achieve this whilst managing taxpayer resources efficiently and within a robust risk management framework.
The British Business Finance Limited is committing £24 million of funding to Edge Creative Enterprise Fund under its Enterprise Capital Funds programme. This takes the programmes overall investment capacity to over £620m.
British Business Finance Limited is a wholly owned subsidiary of British Business Bank plc, is a development bank wholly owned by HM Government. The British Business Bank operates through a number of subsidiaries, including British Business Finance Limited. Neither British Business Bank plc nor British Business Finance Limited is authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. More information can be found at www.british-business-bank.co.uk