International life sciences and sustainability technology investment group NetScientific has completed a convertible loan investment and share acquisition in robotics and AI company Q-Bot totalling £1.3m.
A spokesperson for NetScientific said these transactions will broaden its portfolio, via its hands-on investment approach, and deepen its participation in a proven pioneering business with rapid scale-up potential
Q-Bot has pioneered cutting edge technology and digital solutions for the inspection, maintenance, insulation and upgrade of buildings and homes.
Its patented robotic system for applying insulation in tight spaces and suspended floors to immediately reduce heat loss and stop draughts, damp and mould, won the Queen’s Award for Enterprise in the Innovation category in 2020.
In 2021, Q-Bot generated a loss before taxation of £1.36m on sales of £1.03m, with net assets of £3.7m (based on unaudited management accounts).
On the advice of its corporate finance and venture capital division, EMV, NetScientific completed a first close of a £1.5m Convertible Loan Facility (of which NetScientific is responsible for £0.54m) with a committed first close of £0.58m. NetScientific provided £0.3m out of its £0.54m undertaking. It also purchased 1.3m in shares from early Q-Bot investors and a departing founder.
The Convertible Loan Facility carries interest at 10 per cent, a discount on the conversion of 20 per cent on the next investment round and is repayable within two years.
A spokesperson for NetScientific said the buyout will result in a significant direct equity holding in Q-Bot by NetScientific of 18.7 per cent (from nil), in addition to EMVC’s Capital Under Advisory representing 12.3 per cent.
John Clarkson, executive chairman of NetScientific, said: “After many months of hard work, it is gratifying that this excellent deal has come to fruition, with the necessary restructuring and updated strategic plans for Q-Bot’s future success.
“This targeted financing reinforces NetScientific’s commitment to technology and sustainability, utilising Q-Bot’s proven robotics and AI platform, to expand from the established building market to exploit the company’s wider potential.”
There will be several changes to the Q-Bot board. Chief executive officer Mathew Holloway will depart and professor Peter Childs, founder director and co-director of the Energy Futures Lab Imperial College London, will take on the role of chairperson.
Martin Jervis will continue to lead the commercial operations of the business; Anthony Blaiklock as the CFO will continue to manage the finances and founder Director Tom Lipinski will be interim chief technology officer.
Professor Peter Childs, chairman of Q-Bot, said: “I am thrilled at the prospects for Q-Bot. We have seen significant growth in installations and therefore revenue over recent months and have also rolled out the company’s latest low void and high void robots.
“In addition, we have secured our first overseas robot as a service contract. I am delighted by NetScientific’s involvement with the company, and the continued support by EMV Capital, and look forward to working with them and the company towards significant growth.”
Q-Bot’s post-money valuation in an investment round completed in January 2021 was £16.6m on a fully diluted basis. Since then, the company has realised important growth and sales milestones in its core underfloor insulation offering and is looking to expand into other geographical markets.
Dr Ilian Iliev, CEO of NetScientific and investment director at Q-Bot, said: “As an early supporter of Q-Bot, I am pleased to see the company move to the next stage of its commercial development, through a focused growth strategy on revenues, profitability and expanded applications of its technology in the construction and engineering industry.
“This substantial direct investment exemplifies the implementation of our stated plans, prioritising portfolio companies for deeper ownership, targeted investment and greater involvement to deliver shareholder returns while helping our portfolio companies accelerate growth.”
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