SEIS Company Floats Giving Enormous Return

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Written By Saeed Maleki

Abzena has successfully floated on the London Stock Exchange AIM market, raising £20 million and giving SEIS and EIS investors a 170 percent rate of return within just ten months.

The biochemical testing company provides advanced technology for some of the largest global pharmaceutical corporations, assisting them with development of more efficient products which elicit less side effects, and a higher performance level in terms of both consistency and end result.

Mercia Fund Management was a member of the syndication which ploughed £13.5 million into Abzena in July 2013. Their members use the SEIS as a means to mitigate the risk in funding for new businesses, and they can now look forward to exceptional growth of their investment – based on the floating price.

The flotation – which sold 25 million shares at 80p each – has encouraged the belief that a substantial amount of future growth is in the post, while giving SEIS another success story in record time.

Seed Enterprise Investment Scheme

SEIS was launched in 2012 as a way to encourage investment in promising companies under two years old. Funding can traditionally be difficult to find for these younger start-ups, the risk associated with investment in infant companies is often seen as intangible – regardless of potential.

By offering investors huge tax-breaks in return for start-up investment, the risk associated with funding is reduced significantly. As a result, the SEIS has been responsible for aiding the British economic recovery (although the ‘recovery’ is still very much in its infancy), and has provided a mutually beneficial arrangement resulting in success stories similar to this.

Mercia private investors will have to wait for three years until they are able to take any returns from their investment – SEIS rules state this, however with the large amount of capital gained from AIM floatation, analysts predict that Abzena will see further growth and expansion over the short-term.

AIM is a market implemented by the London Stock Exchange specifically for small and growing companies. AIM was launched in 1995 and has now seen more than 3,000 global companies join. By floating on the exchange, companies are able to raise capital to assist with expansion and growth.

Abzena demonstrated a sound business plan combined with a forward-thinking vision, two aspects that for any new company seeking investment, will assist with finding investors.