Fuel Ventures, a London-based early-stage technology investor, has launched its Follow-On Enterprise Investment Scheme (EIS) Fund on Republic Europe. The fund operates alongside their existing Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trust (VCT) offerings, targeting promising high-growth startups predominantly in scalable software models such as SaaS, marketplaces, and next-generation digital platforms. With a focus on sectors like Finance & Payments Digital, encompassing both B2B and B2C models, Fuel Ventures aims to capitalise on emerging trends, particularly emphasizing AI-native software and modern fintech infrastructure as the foundation for the next generation of transformational businesses.

Since its inception in 2019, the Follow-On EIS Fund has invested £77 million across 57 portfolio companies and reports three significant exits to date, returning £23 million to investors. These exits include notable successes such as ContentCal, acquired by Adobe for $110 million, delivering a sixfold return on investment; Capdesk, a European equity management platform acquired by Silicon Valley-based Carta for $88.4 million; and a partial secondary exit of Arbolus, an expert knowledge platform that has experienced extraordinary revenue growth of over 3,300% since Fuel Ventures’ early investment. The partial sale of Arbolus, managed in collaboration with Kayne Anderson, generated returns of up to 5.8 times the original investment, marking one of the firm’s most lucrative exits. Additionally, OnBuy, an online marketplace, currently holds an unrealised valuation uplift of 8.3 times.

Fuel Ventures’ investment strategy with this fund allows investors to "double down" on high-potential portfolio companies that the firm knows well and has actively supported, reflecting a hands-on and collaborative approach to nurturing startups. The fund’s structure includes a nominee investment model with a minimum direct investment threshold of £2,000 and does not offer a secondary market. Investors can also benefit from the substantial tax reliefs provided by the EIS framework, including up to 30% income tax relief and potential deferral of Capital Gains Tax, which can mitigate risk and enhance overall returns.

The firm has made a strategic decision to concentrate its capital, expertise, and network in businesses that align with future-focused technology trends. This includes doubling down on AI-driven innovations and fintech infrastructure, areas Fuel Ventures believes will shape the next wave of transformative growth in the tech ecosystem. Since its founding, the firm has invested in over 200 startups, many of which have scaled rapidly and attracted further funding from global investors, highlighting Fuel Ventures' strong track record in identifying and supporting future market leaders.

Fuel Ventures’ growing list of successful exits, including the partial sale of Arbolus that returned €47 million to investors, underscores the fund’s ability to deliver substantial returns while supporting transformative tech companies. These achievements not only showcase the potential financial gains associated with their portfolios but also reflect the practical outcomes of Fuel Ventures’ model of active engagement and follow-on investment.

Overall, the Fuel Ventures Follow-On EIS Fund provides an opportunity for investors to access a curated portfolio of high-growth technology businesses within the UK ecosystem, while benefiting from significant tax advantages inherent to EIS investments. The fund’s emphasis on scalable software models and emerging digital infrastructure positions it at the forefront of innovation, aligning investor interest with the sector’s anticipated growth trajectories.

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Source: Noah Wire Services