Augmentum Fintech Plc - Portfolio and Investment Update
PR Newswire
London, January 31
1 February 2022
Augmentum Fintech plc
Portfolio and Investment Update
Augmentum Fintech plc (LSE: AUGM) (the "Company" or "Augmentum"), the UK's only publicly listed investment company focusing on the fintech sector, is pleased to provide the following portfolio and investment update.
Augmentum's portfolio now comprises 24 companies, diversified across fintech verticals, stages of maturity and geographies. Despite the current public markets volatility, the Portfolio Manager believes the portfolio continues to provide significant growth potential for shareholders. The unrealised IRR on invested capital from inception to 30 September 2021 is 21.5% p.a.1,2 and companies representing all stages of maturity are experiencing attractive growth.
The Portfolio Manager believes Augmentum's portfolio companies are attractively valued on a revenue multiple basis compared to the overall fintech market. The average fair value to next twelve months revenue multiple of the global listed high growth fintech cohort declined from c.15.2x in H2 2021 to c.9.2x today3, consistent with valuations decreasing. This is in contrast to that of Augmentum's top 10 holdings, which stayed at c.4.2x over the period.
The Portfolio Manager strongly believes that the fintech industry is still nascent, with enormous potential in terms of total addressable market in both new fintech propositions as well as incumbent financial institutions going through full digitisation transformation, and should continue to deliver strong returns. The Portfolio Manager continues to adhere to the principle that not every good business is a good investment, and routinely passes on opportunities where it believes valuations are inflated beyond the level that could result in compelling returns, a result of significant demand for access to private fintech businesses.
Investment Update
From July 2021 to date, the Company has invested a further £38.0 million. Of this, £22.3 million is in four new investments (Anyfin, Gemini, Sfermion, Wematch) and £15.7 million is follow-on investment in four existing portfolio companies (Artesian, Cushon, Habito, Zopa).
Most recently, the Company has made a £5 million follow-on investment into Cushon, the London-headquartered workplace pensions and savings provider, as part of a funding round totalling £35 million. Alongside this funding round, Cushon announced its acquisition of the Creative Pension Trust, Cushon's second acquisition since Augmentum's original investment in June 2021, which doubles its assets under management to £1.7 billion.
The new additions to the portfolio increase the Company's coverage of key areas where the Portfolio Manager holds a strong thesis but previously had limited exposure, including pensions and savings (Cushon), digital assets (Gemini and Sfermion), credit refinancing (Anyfin) and capital markets (Wematch). The Portfolio Manager's pipeline continues to be strong with £301 million of additional investment opportunities in active development. Opportunities are diversified by geography, round and vertical.
Portfolio Summary
Top 10 holdings (£177.5 million, 74.6% of portfolio)1
interactive investor (£36.7 million, 15.4% of portfolio)
- abrdn, the FTSE 100 asset manager, announced its intention to acquire interactive investor, the UK's number 1 direct-to-consumer fixed fee investment platform, for £1.49 billion in December 2021. The transaction is expected to complete in Q2 2022 and is subject to regulatory approval. Augmentum expects to receive £42.4 million on completion of the transaction.
Tide (£26.3 million, 11.1% of portfolio)
- Tide, the SME business bank, announced it had built a 7% share of the UK SME banking market in January 2022, compared to 4.8% in December 2020.
- Over 1 million invoices have now been created by members, with Tide members invoicing clients and customers for over £500m.
Zopa (£25.2 million, 10.6% of portfolio)
- Zopa, the digital bank, raised £220 million in a self-described "pre-IPO" round led by SoftBank Vision Fund 2 in October 2021, in which Augmentum contributed £10 million.
- Just 18 months after launching the bank, Zopa had more than £1 billion worth of loans on its balance sheet, had issued more than 200,000 credit cards, and tripled its revenue per customer.
Grover (£18.6 million, 7.8% of portfolio)
- Grover, the Berlin-headquartered technology rentals platform, secured $1 billion in equity and asset-backed financing in July 2021, the largest ever financing round for a startup in the circular economy space.
- Grover has been using the capital to accelerate growth and global expansion in new and existing markets. The company plans to increase technology circulations from 475,000 in July 2021 to 5 million by 2024.
- Reflecting the continued growth, in January 2022 Grover confirmed they are actively fundraising.
Onfido (£16.8 million, 7.0% of portfolio)
- Onfido, the global identity verification and authentication provider, announced another record-breaking quarter in October 2021, with a 93% increase year-to-date in global revenue and 100% annual recurring revenue growth.
- The company also announced its acquisition of biometric innovator, EYN, in October 2021 and their partnership with Italian bank Banca Profilo via fintech partner Tinaba in November 2021.
Monese (£12.1 million, 5.1% of portfolio)
- Monese, the mobile-only current account provider, established a partnership with Investec and launched their Banking-as-a-Service (BaaS) platform in September 2021.
- The company has more than 2 million registered users across 31 countries and in December 2021 expanded their credit and lending capabilities through their acquisition of financial services provider Trezeo.
BullionVault (£11.0 million, 4.6% of portfolio)
- BullionVault, the physical gold and silver market for private investors online, now has $3.8 billion of assets under administration.
- The company sees over $100 million worth of gold and silver traded monthly by over 95k clients.
Farewill (£10.6 million, 4.5% of portfolio)
- Farewill, the digital all-in-one financial and legal services platform for dealing with death and after-death services, is now the largest will writer in the UK.
Gemini (£10.2 million, 4.3% of portfolio)
- Gemini, the US-headquartered cryptocurrency exchange and financial services platform, announced acquisitions of portfolio management services company BITRIA and trading platform Omniex in January 2022.
Cushon (£10.0 million, 4.2% of portfolio)
- Cushon, the London-headquartered workplace pensions and savings provider, successfully closed a £35 million fundraising round in January 2022. Augmentum invested £5 million in the round.
- The company announced its acquisition of the Creative Pension Trust in January 2022. This marks its third acquisition since 2020 and doubles its assets under management to £1.7 billion, making it the fifth largest master trust pension provider in the UK.
Others (14 portfolio companies totalling £60.4 million, 25.4% of portfolio)1
Anyfin
- Anyfin, the Stockholm-based credit refinancer, raised $52 million in October 2021 and expanded their operations into Germany. Augmentum invested £7.3 million into this round.
Artesian Solutions
- DueDil, the business intelligence company, announced their merger with Artesian Solutions in August 2021. The strategic partnership enabled the companies to combine their data and insight platforms with the aim of delivering a better service for banks, insurers and financial services companies.
Volt
- Volt, the open-banking payments company, announced their partnership with Worldline, the European leader in payments and transactional services, in October 2021, giving over 600 enterprise-level merchants globally access to Volt's open payments infrastructure.
Wayhome
- Wayhome, the gradual home ownership company, launched to the public in September 2021, following closure of the initial phase of a £500m pension fund investment.
Notes:
1 Values as at 30 September 2021 (unaudited) with investments after that date held at cost. Total portfolio value of £237.9 million as at 30 September 2021 including investments after that date held at cost. Unaudited NAV (prior to performance fee) of £267.3 million as at 30 September 2021. Values stated are prior to any adjustment for interactive investor
2 This is not a profit forecast and there can be no assurance that any capital growth or distributions will be achieved
3 Source: FT Partners and the Portfolio Manager's analysis. "15.2x in H2 2021" refers to a 5 month average Jul 2021 - Nov 2021 and "c.9.2x today" refers to a 3 month average Nov 2021 - Jan 2022
Contacts:
| Augmentum Fintech Tim Levene, Portfolio Manager Nigel Szembel, Investor Relations | +44 (0)20 3961 5420 +44 (0)7802 362088 nigel@augmentum.vc |
| Peel Hunt LLP Liz Yong, Luke Simpson, Huw Jeremy, Angus Campbell (Investment Banking) | +44 (0)20 7418 8900 |
| Singer Capital Markets Harry Gooden, Robert Peel, James Moat (Investment Banking) | +44 (0)20 7496 3000 |
| Frostrow Capital LLP Paul Griggs, Company Secretary | +44 (0)20 3709 8733 |
About Augmentum Fintech
Augmentum invests in fast growing fintech businesses that are disrupting the financial services sector. Augmentum is the UK's only publicly listed investment company focusing on the fintech sector in the UK and wider Europe, having launched on the main market of the London Stock Exchange in 2018, giving businesses access to patient capital and support, unrestricted by conventional fund timelines and giving public markets investors access to a largely privately held investment sector during its main period of growth.
