Chameleon Technology Ltd

Growth Fund - Loans & Equity Case Study

The Company

North Yorkshire-based Chameleon Technology (UK) Ltd develops in-home energy devices which help customers monitor and reduce their energy consumption.

The firm’s bespoke In-Home Display units (IHDs) communicate wirelessly with new digital or 'smart' meters and measure and analyse use and environmental impact for homes and businesses, allowing consumers to improve their carbon footprint and energy efficiency.

Founded by Directors Gary Martin and Mike Woodhall in 2010, the company is based at its head office in Follifoot, near Harrogate, where its range of in-house displays are designed exclusively by the in-house team, with global operations in Hong Kong and Sydney.

The Challenge

The firm - which employs ten staff at its Yorkshire headquarters and will finish the year with a fourfold increase in turnover – was looking to explore other markets and grow the company and product range further.

The Solution

Chameleon has become one of the region’s first businesses to benefit from a new type of investment from Finance Yorkshire. The product is called ‘Loans with Profit Participation’ and is single drawdown or tranched, can last less than five years, offer a repayment holiday and secured behind existing bank and finance facilities.

A strong professional team was put in place to secure the £750,000 deal including Rosedale Advisory Ltd and Leeds-based boutique commercial law firm 3volution LLP, who acted as lead adviser to Chameleon, and Walker Morris LLP for Finance Yorkshire.

Finance Yorkshire Chief Executive Alex McWhirter said “Loans with Profit Participation offer companies a form of flexible finance whereby minimum costs are fixed and total cost of finance is purely dependent on the level of profit that the company can generate and if the company does better than expected it is nt tied-in and can repay early.”

“The capital holiday and term of loan are both matched to the sector and stage of company, there are no personal guarantees and existing facilities do not have to relinquish security – which in turn enables co-investment on similar terms, if needed.”

The Investment Rationale

Finance Yorkshire Investment Director, Andrew Burton, said: “Chameleon was an ideal choice for this type of investment – an excellent management duo leading a respected technical team who have secured an enviable position in the UK and overseas IHD market, driven by legislative pressure on utility companies to encourage users to monitor and manage energy consumption.

“As one of the leading IHD suppliers, Chameleon is at the forefront of the development of the emerging international standards, with the ability to design and manufacture high quality products.”

Future Expectations

Mike added: “Ours is an exciting and dynamic industry and this investment will help us to achieve our growth and product goals with our existing and potential customers, in the UK and internationally.

“Longer term, we are looking to increase our reach into other international markets for current products, as well as continue to develop our future product range.”

Note: this case study is from Finance Yorkshire’s previous fund. Read more about Finance Yorkshire