Redag aims to discover new chemicals for the agricultural industry, with a particular focus on fungicides, herbicides, insecticides and nematicides, by innovating around patents that are currently published.

Why Invest?

Positives

Strategy: To discover and develop new agrochemicals, then license to established companies for further development and commercialisation.

Issues

Early stage: While the company has a portfolio of compounds, and some are being tested by potential licensees, no licenses have been signed yet.

The Management

Positives

Team: An experienced management team is in place, bringing chemistry and biology backgrounds as well as a knowledge of start-up businesses and large agrochemical corporates.

Issues

Finance: There is no internal financial staff, though this will be rectified after the fundraise by the recruitment of a CFO.

Nuts & Bolts

  • Share Issue: Aim of offer is to raise £6m. Number of shares and pricing to be determined. Last fundraise valued the company at £10.6m.
  • Offer: Details tbc and a large proportion expected to be EIS qualifying.
  • Exit Strategy: The aim is to attract interest in 2-4 years: if the portfolio can show good progress then the most likely option is a sale to an established company.

Specific Issues

  • Industry mergers: The background in the industry is very supportive for Redag. The current mergers/takeovers between four of the largest six companies has led to short term disruption, but the worst of this is probably past.
  • Advance Assurance: Not yet applied for, but has been granted for their three previous fundraisings.

Risks

  • Timing: There is some inevitable uncertainty about if or when licenses for any compounds will be agreed.
  • Finance: The aim is for this finance round to fund the company until it is self sustaining. While the company’s projections give around one year of additional headroom in cash use beyond their target break even date, delays longer than this may lead to further funding needs.