Cross-sector experience backing brilliant businesses, a profile of IW Capital

We launched IW Capital in 2011 in the wake of the global financial crisis, with a mission to back ambitious growth businesses. We originally started with a focus on EIS businesses - at the time, the government had scaled back VCT tax relief from 40% to 30% and started to limit pensions more, but increased the EIS relief from 20% to 30%. A decade and a half on, we’ve broadened our focus out from EIS businesses to any high-potential and scalable business that offers a solution to one of the world’s major issues. We’re now a team of 12, we have over £170m assets under management across a range of industries and fully exited 8 investments, and we’re currently raising a growth fund of up to £30M which will co-invest with our 40,000-strong HNWI investor group.

Which industries are you working in?

We invest on a thematic basis to take advantage of the megatrends reshaping societies and economies. These megatrends are: Health and Wellbeing, Technology, Environmental Improvement/Circular Economy and Consumer Goods and Services.

What do you look for in a founder?

We invest in founders that have a proven concept and are already generating revenues of £2M a year. All these founders are purpose-led and want to build category-leading businesses solving some of the world’s major issues, whether that’s pushing the needle on the rehabilitation of the 10 million or so people with living with Parkinson's worldwide, like Jorgen Ellis from Strolll, or delivering a sustainable alternative to single-use-plastic culture, which our portfolio company, Transcend Packaging, addresses.

The founders we back are passionate about using technology to solve some of these major problems. Most of our investments have technology at their heart, through owned intellectual property, being technology enabled or through the application of AI.

Can you talk about your current portfolio?

We’ve invested into several fast-growing companies that are at the cutting edge of their industries. These include Flarin, Rockwater, Impact Recycling, BorrowMyDoggy, Daily Dose, Plumm Health, GPDQ, Transcend Packaging and Strolll.

To spotlight just one of these, we were the lead investor in a recent £10.35M Series A funding round for Strolll. Strolll is an incredible company that is disrupting the neurorehabilitation market with the ‘world’s first’ clinically validated digital therapeutic software platform. Strolll’s platform blends digital content with the real world through the use of off-the-shelf AR glasses and is aimed at helping people living with neurological disorders such as Parkinson’s disease, stroke, and Multiple Sclerosis.

Their technology is amazing and helps patients by providing the gamification of proven physiotherapy exercises, which is empowering healthcare professionals to deliver up to 7x more rehab with 67% less staff time. This is enabling health care services to provide patient care much more effectively and efficiently, with huge implications for health services like the NHS, which are stretched and under-resourced. This is particularly important when we consider the implications of a globally ageing population and a corresponding rise in age-related diseases.

What does the future look like? New trends/technologies, changes in the global/local economic landscape?

The sectors we focus on move with the times, but right now we’re particularly excited by the significant opportunities offered by the four megatrends we follow.

These include incredible innovations in healthcare technology that’s being driven by a globally ageing population. We’re already seeing people take a much more proactive approach to ageing well, and in the future there will be surging demand for solutions that can help them stay healthy as they age and maintain a good quality of life.

In terms of consumer industries, $84T in assets is set to change hands over the next 20 years - in fact, the biggest wealth transfer in history has already started. Gen Xers, Millennials and Gen Z are set to inherit a record volume of assets from parents and grandparents, and this offers huge opportunities for consumer brands. Goods and services that are part of the zeitgeist will thrive as consumers look for products and services that delight, entertain and fulfil them.

We’re seeing a boom in solutions to major environmental challenges, including recycling, driven in part by consumers - but also business leaders - who want a better planet for themselves and for future generations. We’ve reached a crisis point, and the need to repair as much as safeguard the planet from further damage and live more sustainably is urgent. In the future, we’ll see a growth in green businesses with technology at their core driving the low carbon economy.

Technology is at the heart of every product or service we back. AI may be the buzzword of the year, but what really excites us is seeing so many brilliant, scalable tech businesses with excellent proprietary technology at their heart that are transforming people’s lives by making them easier, more efficient and more productive.

What makes IW Capital different?

First and foremost, it’s our team - people buy people, after all, and the companies we work with buy into the personalities as much as the capabilities of the people on our team. They’re why we win our deals. I’m really proud that we’ve built an incredible, experienced team with individuals who are brilliant at uncovering outstanding investment opportunities which play into these long-term shifts in how people live their lives today. Our team has 100+ years of investment management experience in private equity, venture and growth investing and extensive Board experience helping founders to deliver their plans and purpose.

We also take a seat on the board of every company we invest in, so we’re very close partners with our portfolio. As every founder will know, nothing ever goes exactly to plan and it’s critical that founders have a good partner to help them navigate the challenges of running a business, especially as most of the businesses we invest in are at the forefront of their industries so they’re navigating new ground. It really helps that a lot of our team have been on the other side of the fence and have actually run businesses themselves - they really understand what it’s like to sustain and grow a business.

One of our best assets is the extraordinary proprietary network of contacts we’ve built over the years - including thousands of HNWI investors, family offices, lawyers, accountants and businesspeople - which means we can introduce the founders we work with to the very best people to help grow their businesses.

What one piece of advice would you give founders?

Never, ever give up. When I look back at every exit IW Capital has made, every one has been a result of backing an exceptional founder who never gave up. Don’t expect things to be plain sailing, but understand that if you’ve started a business that has gained traction, customers and revenues, you’re already so much of the way there; it’s now just about scaling your business. It won’t be easy, so having passion for what you’re doing is imperative.

And choose your partners carefully. Make sure you have backers who are partners that will really support you along the way. Being a founder can be a lonely place, so make sure you have the right team and partners around you.

Tariq Attia is the CEO of IW Capital.