Accountancy services provider Mazuma is set for significant growth after becoming the second company to secure backing from the Cardiff Capital Region’s £50m equity fund.
The Bridgend-based business, set up by its founders Lucy Cohen and Sophie Hughes back in 2006 while both in their early twenties, has established itself as a UK leading provider of accountancy services to micro-businesses - initially with firms sending in data like receipts in purple envelopes before developing its own proprietary technology platform, MazApp.
The founders, who together maintain a majority ownership stake in the company, said the multi-million-pound investment - the exact value of which is not disclosed - will support a scaling-up of the business in terms of its offer with new accountancy technology solutions, as well as subscriber and employee numbers. Mazuma currently employs around 40. With a UK-wide issue around a lack of equity investment into female-owned firms, the Mazuma founders say they hope their example, while not shattering, will tap away at the glass ceiling.
Funded from the £1.2bn City Deal for the Cardiff Capital Region, made up of the ten local authorities of south-east Wales, the Innovation Investment Capital (IIC) fund is managed by Capricorn Fund Managers with PwC providing advisory support including investment research and sourcing.
The fund, which has a per deal investment remit of between £2m to £5m, confirmed its maiden investment into generative AI and Cardiff-based firm, Amplyfi, last September.
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Ms Cohen said: “We started off with just myself and Sophie, when we were 23 from my spare bedroom, and now we have a workforce of 40 serving clients across the whole of the UK. With this investment we will are looking to accelerate the development of our proprietary technology, expand our clients and staff, to become one of the largest providers of this sort in the UK, if not beyond.”
“One of the important things for us is that we are based in Bridgend, an area where we have always been keen to build local ties and links. It is important to have companies and employers that can scale-up outside of Cardiff and we are looking to significantly increase our headcount there.”
Asked why she and Ms Hughes opted for equity and not debt, Ms Cohen said: “When you grow up running a business, which we essentially have, you don’t know what you don’t know. As you experience more you realise that having other people around the table and other experts that understand your market is really important. So, part of going down the equity route, is that it naturally brings those partners with it, and you get other people around the table with that wealth of experience in different industries and sectors and who have been through the trials and tribulations that are bound to come down the road from scaling a business.
“Importantly, and on a personal level for myself and Sophie, we are two women that have worked in a very male dominated space for a long time and equity investment in female-led businesses is still statistically rare.
"We were very keen, if not shattering it, to tap through a bit of that glass ceiling to demonstrate that this is something that female-led businesses can and should look to take as a step in order to scale. There are a lot of reasons why female-led businesses don’t go after equity investment and it was important to us to set an example.”
On an exit for the IIC’s investment, and whether a flotation of the business is an option, Ms Cohen, said: “What we are really focused on doing is building a business that is self-sufficient, profitable and scalable and I am very confident that is going to prove attractive to someone, or thing, in the future. So, we have our growth plans and the exit or next stage of that will naturally follow, depending on what the world looks like in five years.”
On the threat from artificial intelligence, she said: “When you talk about AI it is really easy to say the first things that are going to be replaced are lawyers and accountants... or that huge rule books are going to be read by a computer. I am pretty sure anyone who has dealt with HMRC knows how nuanced stuff is and even three sets of humans in the same room interpret something differently. AI for us is very much an exciting tool and will enable the quality of the jobs that we have to be so much better. It’s about repetitive and monotonous tasks being replaced and enabling an even richer employment experience so our staff don’t have to do boring, but exciting things.”
Lynda Stoelker, Capricorn Fund Managers’ chief operating officer and chair of the IIC investment committee said: “This investment will allow Mazuma to build on its success and accelerate growth through strategic hires and innovative technological development. It also highlights the fund’s appetite to support businesses from across a variety of different sectors and across different areas of the region.”
Rob Asplin, PwC partner said: “Ever since our first conversations with Lucy and Sophie in April 2023, what has always stood out has been their passion, focus and vision to innovate and disrupt the accountancy sector.” Based on our discussions, we believe that Mazuma has an exciting future ahead of it.”
Mr Asplin confirmed the fund is close to signing off on a third investment, which would be its first co-investment deal with other funders.
Rhys Thomas, chief operating officer of the Cardiff Capital Region’s City Deal, said: “Mazuma is a really exciting business for us to support. It is a tech enabled business with a long history of looking to go to the next stage and being disruptive. It is based in Bridgend which is important as this fund is not just about Cardiff, but the whole of the region. While you invest in your best opportunities out there, it is also fantastic to see it being led by two excellent female founders.”
Huw David, leader of Bridgend County Borough Council, said: “We’re immensely proud of the ambition and reach of Bridgend-based companies like Mazuma whose achievements will resonate across the UK. Cardiff Capital Region’s funding of innovative companies such as Mazuma helps to accelerate the growth in our Region and especially in Bridgend.”
Legal advice was provided by Hugh James and financial & tax due diligence was provided by Hazlewoods. Bruce & Butler provided data protection and cyber security advice.
To date the IIC fund has received more than 160 funding applications from potential investee companies across the city region.
