Despite the economic effects of Covid, Wales’ most innovative companies are financing their growth through bold new initiatives. Michael Sweet meets three trailblazing entrepreneurs cutting through the pandemic recovery.
After securing $22m (£16m) worth of investment from the US, Welsh software start-up Aforza will see it double its number of staff in Wales and establish new headquarters in North America.
The rapidly-expanding IT business, now backed by Silicon Valley investors, started at the Tramshed Tech working hub in Cardiff with an R&D lab. Lured to set up in Wales in 2019 by a Welsh Government grant of £900k, the deal was based on 100 jobs being created.
Aforza specialises in supplying complete end-to-end cloud-based and mobile software solutions – apps – for consumer goods companies to help them sell more and grow faster.
Aforza’s groundbreaking applications have been embraced by consumer goods companies, from small SMEs to global corporations, in five continents and over 20 countries.
Customers include multinational brewing and beverage company, Distell, and leading beverages distributor, Photos Photiades.
While the pandemic slowed Aforza’s plans, co-founder and CEO Dominic Dinardo says it’s all systems go for their push into the US this autumn, which will also see further jobs created in Cardiff.
Speaking to The National, Dinardo said:
“Our original business plan involved hiring software engineers across Europe, but after research and discussion between our founders, we became confident we could do this in Wales, and get access to the high quality talent we needed.
“It’s one of the smartest decisions I’ve made in my career.”
From wanna-be to world beating, the government support was instrumental in fuelling Aforza’s initial growth, but the game-changer since April 2021, is what is known as Series A investment round led by DN Capital, with further participation from Bonfire Ventures, Daher Capital, and Next47.
One step beyond angel investment, the $22m raised in just four months, is down to the Cardiff team of software engineers, the company’s innovative business planning, and ambition, says Dinardo.
“At the start we were hiring people who had no prior knowledge of some of these technologies, training them, and making them productive at great speed. That was key.”
Looking back over the past 18 months, Dinardo says he is immensely proud of his Wales-based team.
“We were able to win customers in North America, South Africa, Kenya, the UAE, Belgium and Portugal, all the time working remotely.”
“We were hardly ever together and what we achieved in very difficult circumstances, is what secured the US finance. Those investors spoke to our customers, spoke to our employees, and looked at the market. And that’s why they backed us.”
Dinardo’s inspiration for setting up Aforza goes back to 2003 when working in South East Asia, where he cut his teeth on creating computer-based automation solutions for driving growth in Nestle product sales.
Now from Wales, his company – of which all employees are shareholders – will establish a base in the northeast of the United States, to ensure Aforza’s apps become the must-have tool to capture the vast North American consumer goods market.
As a ground-breaking green vehicle manufacturer, Powys-based Riversimple is developing affordable hydrogen-powered cars – and a revolutionary approach to their use. You don’t buy a Riversimple car, you subscribe to it.
Headed by founder and CEO Hugo Spowers, the company’s post-pandemic growth is being supercharged to the tune of £1.75m from 600 private investors through Seedrs crowdfunding – including a £580k investment from Angels Invest Wales – a syndicate of Welsh business angels.
Riversimple will use the funding to build vehicles for customer trials that began earlier this year in Abergavenny. The funds will enable the company to draw down grants awarded by the Office of Zero Emission Vehicles, and by Innovate UK for participation in the Milford Haven Energy Kingdom, a green hydrogen energy system.
Trials of the company’s first hydrogen-fuelled vehicle – the Rasa – in Gwent, were pushed back by the pandemic, but Spowers says the company’s revolutionary roadsters are on track to change the way we think about car ownership and reduce carbon emissions.
“Our hydrogen electric vehicles are part of the clean mobility revolution,” says CEO Spowers, who has plans to set up the company’s first commercial production facility in mid Wales, capable of making 5,000 cars a year.
The pandemic slowed down the building of Riversimple’s first trial cars, but that cloud had a silver lining.
“We ended up doing one more crowdfunding round, which pushed the final total beyond our expectations,” says Spowers, who started the company 20 years ago after completing an MBA, part of which looked at a feasibility study on the commercial barriers facing the production of hydrogen powered cars.
“Even then it was clear the real barriers were to do with politics and inertia, not technology,” he says.
“We’ve funded ourselves entirely from grants and crowdfunding over the last five or six years. But crowdfunding is the gamechanger. It kicked off in April 2021 and only just finished.
“Crowdfunding will ensure we can complete our fleet of 20 Rasa vehicles for public trials, and to do the work needed on the design and costing of the plant and the production process.
“That finance is about getting us towards volume production. We have plans to raise £180m over the next four years, through share offerings and other means, and that will get us to two production facilities here in Wales, each producing 5,000 cars a year.”
The first site for commercial production will be in mid Wales, with local government support continuing to play a vital role.
“It also depends on the success we have in proving the naysayers wrong, that you can’t do this in mid Wales.
LIMB-art manufactures prosthetic leg covers – and super cool ones at that. Formed in 2018 by former Paralympic swimmer and medalist Mark Williams and his wife Rachael, the business was born out of a passion to help prosthetic users increase their self-confidence, be proud of what they have, and as LIMB-art’s marketing says, simply have fun showing off.
The last three years have seen the company grow exponentially, with CEO Mark stepping aside from his 20-year corporate career to focus solely on the business.
It all started when Mark, (who became an amputee at the age of 10) created a leg cover for himself in 2017.
“When you are given a prosthetic leg they just look aesthetically terrible. So I made a fiberglass copy of my good leg, and painted it.
“Rachael took a picture of me and posted it on Facebook, and within seconds, an amputee from Birmingham messaged me to say, ‘where’d you get your leg cover from? It’s really cool’.”
“So it started as a bit of fun, but as we began to grow we realised we had to take it seriously.”
“We’re the only company in the world doing what we do, making affordable, customised prosthetic leg covers, which exude personality, individuality, and fun.”
To equip the office and get a website running, Mark identified an £11k budget to get the ball rolling, to fill a need no-one had taken as seriously or so creatively before.
“As we looked at options for production, it was clear that we needed to go for injection moulding, rather than 3D printing, which just doesn’t give the strength needed,” says Mark.
“We were able to use a single cavity injection mould which cost in excess of £100k.
Ιt’s one of those times in business that you get to, and you go, ‘okay, we either do it properly or we don’t do it at all’.”
The cash to buy the mould was financed by the sale of a property, and in the first year, sales of £30k (representing about 50 customers) ensured the company made a loss.
But by February 2020 the company was in profit – largely through ad hoc sales to NHS England and privately -owned limb centres, of which there are almost 50.
As the pandemic hit, sales stopped in their tracks, but in September, after winning a tender to supply NHS Wales’ limb centres, LIMB-art re-emerged with orders stronger than ever.
“Anyone in Wales can now go into their local limb centre and order a LIMB-art cover, and that feels very good,” says Mark.
A deal with NHS England just finalised means LIMB-art can now sell to every limb centre in the UK, and in 2021-22 the company is projecting over £450k in sales, compared to £100k last financial year.
What’s more, a huge new opportunity is on the horizon: the US.
“In the UK you’ve got about 500 to 600 new amputees each month or 6,000 amputees a year.
“When you look at the States, the numbers are much higher. The US has around 500 to 600 new amputees every day. So it’s a colossal market.”
The plan to get to those customers is through the US’s private health insurance providers. Transatlantic discussions are already underway and a US partner company is raring to go.
With orders on the rise in the UK, and the US in sight, the next step for LIMB-art promises to be a giant one.