Woodford loses touch with Ultrahaptics

Distressed fund manager Woodford Investment Management has offloaded its 20% stake in University of Bristol-founded mid-air haptics technology developer Ultrahaptics to Mayfair Equity Partners, the Telegraph reported yesterday.
Woodford was reportedly closing in on £20m ($24.1m) for the stake during negotiations, and while Ultrahaptics refused to confirm the final price, it did say the firm had managed to generate a profit.
Woodford’s fund management business has hit the rocks with the ongoing suspension of its flagship Equity Income fund and a degree of public ignominy for its founder Neil Woodford.
A slew of failed bets means the firm is struggling to maintain balance sheet liquidity, leaving little option but exits en masse to begin eventuating some form of tangible return for its investors.
Among other criticisms, Woodford has been slammed for the high proportion of unquoted stakes such as venture capital contained within Equity Income’s portfolio, which he has struggled to keep within the 10% regulatory threshold.
Founded in 2013, Ultrahaptics has created an ultrasound-powered haptics interface intended to give the impression of touching virtual objects in mid-air, serving potential interactive media applications such as VR in addition to hands-free controls for devices including in-car dashboards and medical interfaces.
The spinout is set to merge with US-based virtual reality platform creator Leap Motion in a deal reportedly worth about $30m announced in May 2019.
Christopher Olds, chief financial officer at Ultrahaptics, called Woodford’s exit “a pity” but said he understood the economics, noting the transaction represented good value for both Woodford and the incoming investor.
Mayfair Equity Partners led a $44.8m round for Ultrahaptics closed in December 2018 at a reported $191m post-money valuation, investing alongside Woodford, commercialisation firm IP Group and the latter’s Venture Fund II as well as Australian superannuation fund Hostplus, electronic products importer Cornes Technology and Dolby Family Ventures.
Woodford Investment had previously backed the spinout’s $23m series B round in 2017 with IP Group, Cornes and Dolby Family, after leading a $15.6m series A two years previously where Olds credited the firm with having convinced Ultrahaptics to pursue more than its original target.
IP Group also contributed series A funding having previously co-led a $940,000 seed round for Ultrahaptics in 2014 with one of its managed funds.