Foresight : Industrial IoT software company raises £2.1m

20 December 2021

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A Chesterfield-based business which aims to transform industry with its internet of things software platform has raised £2.1m to accelerate its international expansion.

Konektio received funding from both the Midlands Engine Investment Fund (MEIF) and Northern Powerhouse Investment Fund ("NPIF"), managed by Mercia and Foresight Group, along with existing investor Tern plc.

The funding will allow Konektio to further develop the product, boost its sales and marketing team, create a number of new highly skilled roles at its headquarters, and grow sales in international markets.

Konektio's main product AssetMinder enables companies to connect to and monitor assets, ranging from individual components to turbines in remote locations or assets across an entire factory floor. The technology gathers data from the assets, allowing users to make informed decisions on maintenance and servicing, reducing downtime and energy usage and improving efficiency.

AssetMinder, which was commercially launched just over two years ago, is now used across multiple sectors from food processing and manufacturing to logistics, energy and water industries. Konektio clients include maintenance and repair operation Dexis, GCE Healthcare, global engineering company Howden and gas turbine manufacturer Centrax, among many others.

The company, which was previously known as InVMA, was founded by Patrick Nash, Jan Hemper and Jon Hill, who recognised the need for the software due to their work as industrial IoT consultants. It now employs around 20 staff at its headquarters in Chesterfield and has recently opened an office in North Carolina.

Peter Stephens, CEO of Konektio, said:"Companies have started to cut through the confusion around digital manufacturing and the next industrial revolution and now share a real appetite to see how the intelligent use of data can deliver returns on investment.

"This is really good news for our business, and we are looking to capitalise on this trend by investing significantly in product development, R&D and expanding our global customer base. The investment secured will help us achieve these goals."

Kiran Mehta, Investment Manager at Mercia, said:"Konektio is a deep tech company with the potential to transform industries ranging from manufacturing to infrastructure and power generation. The team are renowned for their knowledge and strong track record. This funding round will enable them to take their product to the next level and establish the company on the global stage."

Adam Huckerby, Senior Investment Manager at Foresight, added:"We have been impressed by management's achievements to date. There is a wealth of growth opportunity in the market and this is one of several IOT-related investments Foresight has made. We look forward to working with the team over the coming years."

Al Sisto, CEO of Tern Plc, said: "We are very pleased that Konektio has secured a significant institutional investment in order to fund the next phase of its growth. We welcome the Mercia and Foresight funds as our partners, alongside the management and founders of Konektio, to help the business achieve its full potential."

Grant Peggie, Director at the British Business Bank, said:"It's great to see fund managers from MEIF and NPIF collaborate to invest in a growing innovative business in Chesterfield. This latest deal will support Konektio's expansion in international markets and boost the local economy with the creation of new high skilled jobs. We encourage other businesses in the Derbyshire area looking to grow to consider investment available from the Bank's regional funds."

The Midlands Engine Investment Fund and Northern Powerhouse Investment Fund projects are supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

ENDS

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About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of balance sheet, venture, private equity and debt capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK footprint through its regional offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia currently has c.£800million of assets under management and, since its IPO in December 2014, has invested over £96million into its direct investment portfolio. Mercia Asset Management PLC is quoted on AIM with the epic "MERC".

The Group raises its own Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) Funds and details about open offers can be found through Mercia's website.

Mercia Asset Management PLC is quoted on AIM with the epic "MERC" and includes the following wholly owned subsidiaries -

• Mercia Fund Management Limited is authorised and regulated by the FCA under firm reference number 524856
• Enterprise Ventures Limited is authorised and regulated by the FCA under firm reference number 183363
• EV Business Loans Limited is authorised and regulated by the FCA under firm reference number 443560

www.mercia.co.uk

About the Midlands Engine Investment Fund (MEIF)

The Midlands Engine Investment Fund, supported by the European Regional Development Fund, will invest in Debt Finance, Small Business Loans, Proof-of-Concept and Equity Finance funds, ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.

The Midlands Engine Investment Fund is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK's national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.

The Midlands Engine Investment Fund is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.

The MEIF covers the following LEP areas: Black Country, Coventry & Warwickshire, Greater Birmingham & Solihull, Stoke-on-Trent and Staffordshire, The Marches, and Worcestershire in the West Midlands; and Derby, Derbyshire, Nottingham & Nottinghamshire (D2N2) Greater Lincolnshire, Leicester and Leicestershire, and South-East Midlands in the East and South-East Midlands.

The project is receiving up to £78,550,000 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The programme will continue to spend to the end of 2023.

The Department for Levelling Up, Housing and Communities is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit www.gov.uk/european-growth-funding.

The European Investment Bank is providing £122,500,000 to support the Midlands Engine Investment Fund. This follows backing for the Northern Powerhouse in 2017 and backing for the newly launched North East Fund. For further information visit www.eib.org

The funds in which Midlands Engine Investment Fund invests are open to businesses with material operations in or planning to open material operations in the West Midlands and East & South-East Midlands.

The British Business Bank has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). The guide, which impartially sets out the range finance options available to businesses and provides links to support available at a regional level, is available at https://thebusinessfinanceguide.co.uk

About the Northern Powerhouse Investment Fund

• The Northern Powerhouse Investment Fund will invest in Microfinance, Business Loans and Equity Finance sub-funds which will offer financing ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.
• The Northern Powerhouse Investment Fund is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK's national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.
• The Northern Powerhouse Investment Fund is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.
• NPIF covers the following LEP areas: Tees Valley Combined Authority, Greater Manchester, Cheshire and Warrington, Cumbria, Liverpool City Region, Lancashire, Hull and East Yorkshire, Leeds City Region, Sheffield City Region, York and North Yorkshire.
• The project is receiving up to £140,359,192 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Communities and Local Government is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding.
• The funds in which Northern Powerhouse Investment Fund invests are open to businesses with material operations, or planning to open material operations, in, Yorkshire and the Humber, the North West and Tees Valley.

About the British Business Bank

The British Business Bank is the UK government's economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank's core programmes support nearly £8bn[1] of finance to almost 94,800 smaller businesses[2]. Since March 2020, the British Business Bank has also launched four new Coronavirus business loan schemes, delivering almost £73bn of finance to around 1.6m businesses.

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

In light of the coronavirus pandemic and EU Exit, the Finance Hub has expanded and it now targets a wider business audience. It continues to provide information and support for scale-up, high growth and potential high growth businesses, but now provides increased content, information and products for businesses in survival and recovery mindsets. The Finance Hub has been redesigned and repositioned to reflect this, during this period of economic uncertainty.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at www.british-business-bank.co.uk.

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[1] Figures as at end of June 2020
[2] Figures as at 28 January 2021