SixFive Networks IP loan from NatWest

The challenge.

SixFive has been scaling rapidly for some years; but it had been doing so using its own funds. The management team wanted to find an alternative source of cash to support further scaling, but one that wouldn’t involve diluting shareholder equity.

The solution.

Sollomon Lozenge

Hallmarq Lozenge

Haider Mawji, SixFive’s CFO, had heard of Inngot and its online tools for identifying and valuing intellectual property and intangibles; and, he says, “in business today, if you think about it, people are using cloud-based solutions rather than actual physical hardware all the time” – so in a world where intangibles drive business, the idea of using IP as collateral made “100% sense.” In fact, “if you look at the world’s biggest companies, they are all valued on their IP, not their tangible assets.”

Neil Bellamy, Head of Technology, Media & Telecoms at NatWest, and one of the architects of the new IP-backed lending proposition, says: “As a bank we work with some of the country’s most innovative start-ups and our aim is always to enable them to leverage the things that really drive their success. With this loan proposition, we have shown the potential that unlocking value from IP and intangible assets could have for the UK economy, by helping firms like SixFive to scale, create high value jobs and boost UK productivity.”

Mark Renard, the NatWest Relationship Director who worked with SixFive Networks to help them through the bank’s application process, says: “It’s fantastic that I have been able to support my client with material funding to aid their growth aspirations. Using the expertise in Inngot’s sophisticated tools, NatWest have successfully been able to leverage the value in Six Five’s underlying IP to structure an appropriate term debt solution.”

Mark adds: “As a Relationship Director directly facing off to the Technology Sector, I can see the opportunity for using this innovative and unique solution to support many similar high-growth businesses moving forward.”  

Once NatWest explained the new lending proposition, the role that IP would play in the loan application, and how SixFive would need to use Inngot’s tools as part of the loan procedure, Haider says “the process was actually easy; and once we got started it was fairly quick.”

One reason Haider found the tools easy to use was because SixFive has been developing its IP over a number of years, and already had the records of its R&D expenditure to hand. But Haider also appreciated the way the Inngot toolkit extrapolated a value for the IP in use – what it was delivering for the company. Usually, spending on innovation only appears on a company’s balance sheet as a sunk cost, with no indication of the revenue the IP developed as a result of the investment might be delivering.

But, says Haider, “with tech businesses, it’s all about developing the IP, because that’s the whole valuation stack.”

He adds, “one thing I really liked was the way that Inngot provided a real person who talked us through the application process online. That’s a real benefit, because we could be online together, and they could help us go through the questions and make sure we filled them in properly. It helped us understand the nuances you sometimes get in online forms like this, so we could give the right data.”

”With tech businesses, it’s all about developing the IP, because that’s the whole valuation stack.”

The result.


IP loan approved by NatWest

SixFive Networks would have continued to grow without the NatWest loan, Haider observes; but if the company had to rely on its resources, it may have meant scaling less quickly. With the loan from NatWest, supported by the company’s IP as collateral, he says, “it gives us confidence, because it validates the idea that investing in our IT is creating value for us. And now we can accelerate our growth, with NatWest’s support.”