Royal College of Art makes £0.5 million cornerstone investment into first ever RCA Design & Innovation S/EIS fund

The RCA has launched a new Seed / Enterprise Investment Scheme (S/EIS) Design & Impact fund investing in early-stage companies founded by Royal College of Art staff or graduates. The fund, managed by Infinity Asset Management, intends to build on the success of the RCA’s incubator in building and supporting companies founded by staff or graduates. Over the past 12 years, the RCA has invested £2.2million into over 70 design-led ventures achieving a gross multiple of 4.7x invested capital (with the value of its shares in those companies exceeding £9.5 million and having realised over £820,000).

The RCA’s portfolio is multi-sector including technology and product companies encompassing the medtech, agtech, cleantech and fintech sectors as well as creative interiors and fashion brands. Around 40% of the companies are impact-for-profit companies and in the past five years 46% have been women-led.  The five year survival rate of companies is 67%. 

This new £2.5m-£5m fund will allow qualified investors to access companies at a very early stage while valuations are low and those companies will be incubated and supported by InnovationRCA, the College’s award-winning business incubator. This fund will invest at the pre-seed and seed stage and will be the first investor. It will also make follow-on investments. 

It is expected that the fund will be invested in 15-22 companies over 18-24 months. The fund will enable individual investors to benefit from the HMRC Seed Enterprise Investment and Enterprise Investment Schemes that provide 30%- 50% tax reliefs respectively subject to complying with certain conditions. 

Speaking about the fund, Sarah Butler, Partner at Infinity Asset Management LLP, which is authorised and regulated by the Financial Conduct Authority, said: ‘We are absolutely delighted to be working with InnovationRCA on such a prestigious and exciting opportunity. As Fund Manager, we are partnering with an esteemed institution and their team to support tomorrow’s entrepreneurs, and collectively we are extremely enthusiastic about the investment pipeline for this fund. Having operated a successful angel investor programme, the natural transition for RCA was to create a fund, opening the investment opportunities to a wider audience looking for a diversified portfolio.’

Dr Paul Thompson, Vice-Chancellor of the RCA, said: 'For us, channelling capital into viable innovations at the early stage is essential to delivering real impact across our start-up companies. From our partnership with Infinity, we will really be able to supercharge the development of the incredible innovations coming out of the RCA community.'

Also commenting, Dr Nadia Danhash, Director of InnovationRCA (and IRCA Enterprise Ltd, an Appointed Representative of Infinity Asset Management) said: ‘We’re very proud to be taking this next step. We’ve always been a founder-friendly investor and have helped them to go on to raise over £125 million further investment as well as create over 800 UK jobs. For us, the logical next step is to work with a highly respected fund manager, Infinity, and to connect more capital to more companies.’