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SFC's 2023: The Year in Review

Joseph Zipfel, Chief Investment Officer With a background in investment banking and a Master's from ESCP Europe, Joseph manages SFC Capital's investments, investor relations, and portfolio company fundraising strategies since 2014.
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SFC's 2023: The Year in Review

As 2023 draws to a close, it’s time to look back on this year, and it’s fair to say that it has been quite a busy one for SFC Capital! 

In 2023 alone, the team has closed an impressive 105 investments, underscoring SFC’s position as the most active seed fund and a key backer of innovation in the UK. These included 85 new company investments from our SEIS fund, and 20 follow-on investments in top-performing portfolio companies. 

A pivotal event this year was the implementation of the new SEIS rules, which enabled us to raise our largest SEIS fund to date, increase our ticket size and invest in more mature companies. For the past three years, we have lobbied hard for these extensions that dramatically improve the risk profile of SEIS investments, making the scheme more attractive than ever for both investors and companies. 

In terms of returns, 2023 proved to be exceptional, with 5 exits generating an average return of 14x (excluding tax relief). These included a 49x secondary sale of our shares in Cognism in August, and the acquisition of ORB Innovations by Glidewell Dental in May. These exits helped us build a robust track record of cash exits for our fund investors. With a total of 22 cash returns to date and an average return of 8x, the SFC portfolio is showing that SEIS and EIS are not just tax reliefs but represent an excellent asset class when approached with diligence. 

A major highlight has been partnering with Innovate UK in the Future Economy Programme. This collaboration, along with partnerships with top UK universities, has diversified our deep tech deal flow. Investments in Clean Tech, Life Science, and Medtech companies have risen to 50%, a significant increase from 15% in 2020. We believe these sectors are central to groundbreaking innovations and returns in the next decade, as software becomes more commoditised and capital shifts to science-based solutions addressing global challenges. 

Furthermore, SFC was honoured to win prestigious awards, including SEIS Fund of the Year and Impact Investor of the Year at the EIS Association Awards in June. SFC was also named Most Active Investor in the Regions at the UKBAA Awards a few weeks later in July. 

These achievements, against the backdrop of a relatively depressed market, stand as a testament to the dedication and hard work of the team, and validate the model that we have been diligently building over the last 10 years. 

Looking ahead, SFC Capital is poised to double down on its growth as market conditions improve in 2024, which should only mean more capital invested and more exits from the portfolio, so watch this space! 

Capital at risk. For professional investors only. 

Past performance is not indicative of future performance. 

Tax benefits are subject to individual circumstances. Subject to changes. 

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DISCLAIMER:
SFC Capital Ltd (SFC) is an appointed representative of SFC Capital Partners Ltd which is authorised and regulated by the Financial Conduct Authority (‘FCA’) in the United Kingdom (FRN 736284). This website is intended for professional investors only; any reproduction of this information, in whole, or part, is prohibited. The content is for information purposes only and should not be used or considered as an offer or solicitation to purchase or sell any securities.

Investment in early-stage companies involves risks such as illiquidity, lack of dividends, loss of investment and dilution. Investment in SEIS/EIS eligible companies should be considered as part of a diversified portfolio. The availability of tax relief depends on individual circumstances and may change in the future. The availability of tax relief depends on the company invested in maintaining its SEIS/EIS qualifying status. There is no assurance that the investment objectives of any investment opportunity will be achieved or that the strategies and methods described herein will be successful. The investment products cited herein may place capital at risk and therefore investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance and the value of an investment may go down as well as up. Investors may not get back the full amount invested. Companies’ pitches for investment are not offers to the public and investments can only be made by members of SFC Capital. SFC Capital takes no responsibility for this information or for any recommendations or opinions made by the companies. Neither SFC Capital nor any of its employees provide any financial or tax advice in relation to the investments and investors are recommended to seek independent financial and tax advice before committing. This website is not directed at or intended for publication or distribution to any person (natural or legal) in any jurisdiction where doing so would result in contravention of any applicable laws or regulations. No warranties or representations of any kind are expressed or implied herein. This material is confidential and is the property of SFC Capital.

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