Syndicated equity Investment focuses Laser Wire Solutions’ ambitious growth plans
An Abertillery-based company whose high-tech products are based on technology originally developed for NASA’s Space Shuttle programme has secured a £275,000 equity investment package from Finance Wales and a group of business angels syndicated through xénos, the Wales Business Angel Network (xénos).
Finance Wales and three xénos business angels invested alongside an angel from the South West Angel and Investor Network (SWAIN).
Laser Wire Solutions (LWS) used a Smart Cymru research and development grant to develop a range of laser-based wire-stripping products. These products can improve the quality of high-value electrical wiring systems and can be used to strip wires in complex wiring systems.
The funding package has provided LWS with the capital it needs to commercialise its current products and further develop its technology.
Economy Minister Edwina Hart has welcomed the news and said: “ LWS was supported under our High Potential Starts programme so it’s good news to hear it is reaching its potential and expanding. The investment package also highlights the range of support available in Wales to help companies grow, develop and commercialise new products and create jobs.”
LWS will also use the investment to fund a sales and marketing drive as well as to recruit additional sales and engineering staff. The company has employed 2 staff since receiving the investment and plans to recruit 2 more in 2014.
The company is also moving to new, 5,000 sq ft premises in Treforest at the end of January as part of its expansion.
“Laser Wire Solutions’ wire-stripping products are suited to many different applications, materials and sectors. Added to this, we can also provide customers with bespoke solutions. We’re currently experiencing significant interest from companies in a range of sectors impressed by the cost savings and quality improvements our products can achieve.
“We’ll use this funding package to develop our existing products and it will also spearhead our long-term expansion because we’ll be able to launch some new products. We initially approached xénos to discuss LWS’s future funding requirements and David Maas of xénos worked with us to prepare us for equity investment. He also introduced us to Finance Wales and the syndicate of private investors who’ve invested in us,” explained Managing Director, Paul Taylor.
Commenting on the investment, xénos Manager, David Maas said: “Laser Wire Solutions has developed a range of innovative products which are already attracting a great deal of interest and also have a great deal of potential. xénos was pleased to work with Paul to understand the company’s funding requirements and co-ordinate this syndicated round.
“Paul can now benefit from the angels’ investment as well as a wealth of expertise and experience. The angel investor syndicate also benefitted from the Seed Enterprise Investment Scheme (SEIS) introduced in 2012 which offers investors significant tax incentives from investments in early-stage companies.”
LWS currently plans to target markets with an estimated potential value of £20 million. Future product development will also open up new markets as the company launches products for specific sectors.
The funding package included a £125,000 equity investment from Finance Wales structured by Leanna Davies of Finance Wales’ Technology Venture Investments team. She said: “This investment provides Laser Wire Solutions with the backing to take some important steps forward. We’ve structured it so that it’s SEIS-compliant and will also provide the company with the flexibility to grow. We were delighted to work with the angel investors as they’ll bring additional expertise to the business.
“Laser Wire Solutions can now commercialise its current product range and build its market presence by establishing its sales and marketing operations. It can also start diversifying into new markets as its products can be adapted cost-effectively for a range of applications.”
Using laser light to remove the insulation from electrical wires improves the quality of electrical instalations because laser light is absorbed by the insulation layer of the cable but reflected by the cable itself, leaving it undamaged.
LWS has developed two flexible automated laser-based wire-stripping products. Its state-of-the-art Gemini stripper offers one of the most comprehensive specifications available on the market today while the Mercury is suited to standard wire stripping applications.
Finance Wales is a leading UK technology ventures investor and has invested almost £28 million in 30 companies since the launch of the Wales JEREMIE Fund in 2009. Finance Wales is a long-term backer and can invest over a number of rounds in young technology businesses to ensure they become commercially viable.
xénos has facilitated over £20 million of angel investment in some 180 Welsh SMEs since it was established 1997. In 2013, xénos facilitated £2.2 million of business angel investment in 20 Welsh SMEs and currently has over 120 registered business angels investing in all types of Welsh businesses.
Paul Taylor received support from the Welsh Government’s High Potential Starts programme to help to prepare LWS for investment.