Forward Partners’ portfolio value swells in maiden results
Early stage venture capital firm Forward Partners today reported a jump in its portfolio value in the first half of the year, in the first results since its listing on London’s Aim market in July.
Ventures portfolio value increased by £22m to £108m in the six months to 30 June, including £3.5m new investments during the period – one of which was a £700,000 investment in SaaS startup Clustermarket’s seed round at the end of June.
Excluding these new investments, Forward Partner’s portfolio grew 21.5 per cent in the period, weighted towards the first quarter when it jumped 15.5 per cent, fuelled by its investment Ably’s £9.8m external funding round.
Growth was slightly slower in the second quarter, at 6 per cent, but was largely driven by a £3.7m uplift from Cazoo’s IPO.
Net asset value per share stood at 104.1 pence at the end of the first half, up from 83.3 pence at the end of December 2020.
The firm’s “Forward Advances” division, which provides revenue-based finance to startups for their marketing efforts, posted a 39.6 per cent gross rate of return on full repaid loans.
Forward Partners also said it had sourced deals amounting to £3.6m for its Advances business in the first half of the year, surging 177 per cent from the first to the second quarter.
CEO Nic Brisbourne said the company was “particularly pleased” with the growth of its Advances arm, which it attributed to “the appeal of revenue based financing accelerat[ing] for fast growing British SMEs.”
Yet the firm noted the high gross IRR on fully repaid advances in the period was high due to faster than expected repayments and low levels of defaults amongst its first customers since the division was launched in April 2020, and said it expects the gross IRR on fully repaid advances to taper over time, trending down to an expected 25 per cent.
It comes after Forward Partners joined the handful of public VC firms in the UK with an Aim market IPO on 19 July, in which it raised £36.5m and was valued at around £134.6m on admission.
The listing was oversubscribed, following in the footsteps of Draper Espirit, which went public in 2016 and upgraded to London’s FTSE 250 main market in July.
Although on the day of the IPO in July, Forward Partners’ pre-trading gains were eroded by almost 13 per cent, and they remained fairly lacklustre for the remainder of the month, the firm’s shares have been steadily climbing since.
Forward Partners’ shares were down 2 per cent at lunchtime today following their maiden results, trading at 119 pence per share.
Outside of the period, the firm said that during its first post-admission quarter to the end of September it had clocked three exits totalling 11.7m, including two £5m exits from startups Heights and Wonderbly and one via Cazoo’s SPAC merger, valued at £6.7m.
Looking forward, Brisbourne said the firm was “focused on putting in place all the elements required to increase shareholder value” through both growing its own team and increasing its pipeline of deals – as well as placing a renewed focus on the types of startups it backs.
“We have always favoured diversity of leadership within the firms we invest in, but we will be placing extra emphasis on this dynamic going forward,” Brisbourne said.
“Not only is this the right thing to do, but we believe diversity delivers more resilient and creative companies, and ultimately superior long term returns for the Group and its shareholders.”