The South West and Wales team at BGF, the UK and Ireland’s most active investor in growing businesses, have invested a total of £67m into companies in 2020, despite the challenges of the pandemic.
New investments in the last 12 months included £6 million in Cardiff-headquartered Kagool. With offices in Manchester, London and New York, the industry leading digital agency and Sitecore specialist secured investment from BGF to support its organic and acquisitive growth. Shortly after BGF’s investment, Kagool acquired Delete, an award-winning digital experience agency.
Kagool’s growing workforce of more than 70 digital experts has delivered a revenue increase of over 50% in the past three years. Beyond its core offering of design and build leveraging the Sitecore Experience Platform, Kagool offers extensive services across Customer Experience (CX), digital strategy, search marketing, CRO and more.
The new investments take BGF’s total funding in Wales and the South West of England to more than £377 million. As a further stake in the region, BGF strengthened its offering by expanding the regional team, with new appointments Liam Pursall and Georgie Stratton joining BGF in investment and direct origination roles to reflect ongoing market demand.
Ned Dorbin, Head of South West and Wales at BGF, commented: “Covid-19 has placed a significant strain on many of the region’s businesses; however, we have remained determined to support those entrepreneurs and management teams showing great resilience in the face of economic uncertainty.
“Throughout 2020, BGF has continued its long-term approach, with the aim to assist the expansion of businesses in Wales at the appropriate pace and pursue an exit that is timed right to be of maximum benefit to all shareholders. There are so many exciting companies in the region, and we predict that we will see an increase in companies that are looking for growth support.”
Ned and his team have seen an uplift in enquiries heading into 2021, signalling further prospects for deal activity over the next 12 months. Opportunities are likely to arise from entrepreneurs looking to make acquisitions, enter new markets and potentially de-risk of some of their own personal investments.
This view is supported by research carried out by Delineate on behalf of BGF which found that 83% of growth economy companies in the Wales – which have revenues between £2.5m and £100m – said they remain motivated to grow in 2021. This data also showed that 67% of companies in Wales said that the pandemic has triggered permanent changes to their business models. 58% have invested in digital infrastructure and 42% have entered new sectors.
BGF’s data also showed that Welsh companies were looking to employ more staff members in the region. 25% of Welsh respondents said they planned to hire a few new staff and 17% said they planned significant new hires – signalling that overall, there will be net gains in employment across the growth business population.
Ned continues: “We are seeing a real drive and motivation amongst growth economy businesses in Wales to get themselves in order, with many considering equity funding as a stabilising solution. BGF’s proposition as a long-term, minority equity partner is attractive to businesses looking to recapitalise, particularly if they have built up significant amounts of debt during the pandemic. Equity funding can allow the repayment of personal financing and accelerate growth plans, such as strategic acquisitions. BGF has the expertise and financial backing to give businesses critical advice as they look to reignite or forge ahead with growth plans this year.”