Newcastle-headquartered Watson Burton advised AI specialist Wordnerds on an equity investment of £650,000 to support its plans for expansion.
Wordnerds received the funding from the North East Innovation Fund, supported by the European Regional Development Fund (ERDF) and managed by Northstar Ventures, as well as from angel investors Paul and Gerard Callaghan, founders of The Leighton Group, Kevin Beales, founder and CEO of Refract, and Maurice Whittle.
Wordnerds, which is based in Gateshead, combines cutting-edge AI and advanced linguistics to train computers to understand the huge volume of unstructured text that is currently invisible to most companies.
Wordnerds’ technology is designed to make sense of the millions of tweets, emails, web chats, online reviews, CRM-entries and survey results written about – and within – brands or their competitors, and helps companies to understand and act on this information.
Watson Burton’s corporate team advised upon and negotiated the terms of the investment.
Pete Daykin, CEO of Wordnerds, said: “A deal as complex as this could have been fractious and time-consuming. That it was agreed so quickly, effortlessly and constructively was in no small part down to the team at Watson Burton and we remain extremely grateful for their patience, good humour and measured advice.
“Wordnerds was happily trading, liquid and growing fast. The support we received – and continue to receive – from organisations like Sunderland Software City, Gateshead Council and Proto was pivotal both in developing a class product and in winning some big-ticket clients.
“But when customers started telling us that what we had was well ahead of our competition, we realised we didn’t have long to press home our advantage. To grow quickly we need two things: lots of cash and excellent people around us. People who know more about growing a software business.
“Northstar and Richard Charnley have been utterly unbelievable in helping us to access both. Not only have they shown faith in our ideas, capabilities and team, they have been open-minded, flexible and collegiate.
“It was they who suggested we include a few well-chosen angels in the round and who made significant sacrifices to ensure we were able to access the buy-in and expertise of some of the industry’s best and most experienced people.”
Paul Wigham, partner at Watson Burton, said: “We were delighted to advise Wordnerds on an investment which will have a major impact on the company’s growth.
“Pete and his team have developed a highly exciting, innovative technology that is really making waves in the market and it’s the perfect time for them to take another step forward. Thanks to this investment, they are able to do so.”
Nick Gray, solicitor at Watson Burton, added: “We combined our extensive expertise in the technology sector with our great depth of experience in advising on equity investment deals to help this deal reach a successful conclusion.
“It was a pleasure to have played our part in supporting a visionary North East-based business: Wordnerds is yet another example of the exceptional talent that can be found in the region’s tech sector.”
Richard Charnley, investment manager at Northstar Ventures said: “As a leading early stage investor, Northstar look for ambition and innovation. The team at Wordnerds impressed us from our first conversation with them. They have all the building blocks in place: the right team, market, product, and they complement that with a level of ambition and passion that we are excited to support.
“We were also very pleased to welcome a strong group of angel investors to the round that add significant business model experience.”
Paul Callaghan added: “I decided to invest in Wordnerds for three reasons: this is an exciting new application of innovative technology that is set to be a market leader; the company has a strong and credible management team capable of growing the business; and the product has global market potential. Clearly this could be another North East England technology success story.”