Carbon 13 SEIS VII fund will be managed by Syndicate Room

Carbon13 has launched Carbon13 SEIS VII, its seventh fund for pre-seed companies and the first to be managed by Syndicate Room.

The two Cambridge companies are working in partnership to ensure that Carbon13’s most successful start-ups are able to cast a wider net for investment for companies working for sustainability goals, while Syndicate Room gets to deliver on its own decarbonisation agenda.

“Carbon13 typically has around 30 companies in their programme,” says Tom Britton, who co-founded Syndicate Room in 2013 with Gonçalo de Vasconcelos. “They whittle it down to between eight and 10 companies and those are the ones the fund will invest in.”

This shortlist includes companies expected to be eligible for SEIS. The Seed Enterprise Investment Scheme (SEIS) is a government initiative designed to help start-ups raise investment by offering generous tax reliefs. With SEIS investors may claim a suite of tax reliefs including a 50 per cent income tax relief on up to £200,000 invested, and 50 per cent exemption from capital gains invested into the scheme that arise in the same year.

“We plan to raise two funds a year with Carbon13, with around £1-2m [of investment] per fund. In practice, and from the FCA [the Financial Conduct Authority] point of view we manage the fund, and Carbon13 are the advisor to the fund on what to invest in. We get to do all the admin and not-so-fun stuff, and they pick and choose the companies they want the fund to invest in.

“Carbon13 will help us grow the number of funds we offer to investors. The great thing is they’re Cambridge, local, and they’re decarbonising – it’s important for us to not just be about investment but because these companies can have real a positive environmental impact.”

He adds: “Carbon is hugely important in terms of reducing emissions, but methane is also a very significant greenhouse gas impacting climate change. But it’s also looking at companies that aim to improve the health of the ocean, for example using seaweed in beauty products, or replacing petrochemicals with substances that mimic petroleum-based products.”

Syndicate Room took shape in 2012 when Tom and Gonçalo met at Cambridge Judge Business School.

“Gonçalo was working on Syndicate Room at Cambridge Judge Business School when I met him,” says Tom. “We had complementary skills. He asked if I wanted to join Syndicate Room as co-founder, and it was officially launched in 2013. [The initial offer was an equity crowdfunding platform for high-net-worth individuals and angel investors.]

“Through various ups and downs and pivots, the platform was growing but not scaling. In 2017 we launched Fund 28, our first EIS fund, and for a few years we ran the fund alongside the platform but the fund was much more efficient to run, so in 2018 we decided to wind the platform down and concentrate on the fund.”

In October 2019, the company announced that it would adopt a venture capital fund investment model, and would no longer offer individual crowdfunding investment opportunities. Then came the pandemic and, Tom says, “we had to consolidate and run just that one fund for an extended period of time.”

In 2019 Gonçalo de Vasconcelos moved from CEO to a NED (non-executive director) role, then left the company in the summer of 2022.

Tom adds: “The goal way back then was to launch other funds and that’s finally happening now. But first, we had to trim the team down which was painful. We initially went from 30 to 18 and then when the pandemic hit we were operating as just six. Now we’re back to 10, with six focused on Access EIS, and we’re looking to hire as we launch new financial products regularly. The technology we spent time refining for our own fund is being used to run others.”

Carbon13 has a rapid pace of activities and recently passed a significant milestone with its 10th Venture Builder programme.

Nicky Dee, co-founder and CEO of Carbon13, said: “We have worked with a couple of other fund managers for SEIS, but none who are also able to support fundraising in the way that Syndicate Room does. Furthermore, we are impressed by the way they communicate with investors and have a polished platform to help investors manage their admin and insights as a SEIS investor.”

She adds: “Our expectation is that SEIS will remain a core part of Carbon13’s ability to deploy investment into some of the most exciting climatetech ventures in the UK.

“I have previously engaged with Syndicate Room to support fundraising of individual ventures and as an investor, and have always been impressed by their organisation and dedication to supporting ventures and investors. It’s great to work with another Cambridge-based organisation!”

Tom concludes: “We want to help Nicky and her team make the biggest impact they can. In a way, their success is all of ours.”

More details on the Carbon13 SEIS fund here.