Molten Ventures tech portfolio slumps nearly £200m – but it’s not all doom and gloom
Listed venture vehicle Molten said the value of its holdings had slumped by nearly £200m in the year to the end of March as high-growth tech firms are buffeted by an economic downturn.
In a trading update today, the firm said the gross value of its portfolio of high-growth tech companies was expected to be around £1.37bn at the end of March, down from £1.53bn last year.
The slump in value comes after a torrid year for start-ups in which the ripples of war in Ukraine and rising interest rates have forced start-ups into major valuation haircuts.
Molten said its core portfolio remains “well funded” and focused on “capital efficiency”, however, and there are now some signs of the market beginning to settle this year.
“While economic uncertainties persist, we are beginning to see signs of stabilisation,” said chief Martin Davis. “Molten is well positioned to manage through a recovery and capitalise on any opportunities presented and in doing so deliver for shareholders.”
Sharp hikes in interest rates pushed up the cost of money over the past year and brought an end to a funding boom for venture capital firms.
Molten slashed its investment by more than half to £138m in the 12 months to March – down from £311m the previous year – with just £26m invested in the second half.
Shares in Molten jumped, however, as analysts said the dip in the value of its portfolio was well above the wider downturn in the market and the firm’s portfolio remained well capitalised.
“The valuation approach continues to reflect the public market peer movements. On average Enterprise Values have reduced 37 per cent in the Core over the 12-month period, leading to a fair value reduction of 19 per cent,” analysts Berenburg said.
Berenburg described the update as “another positive update from Molten” which demonstrates that net asset value per share is “far higher than the market is giving them credit for”.
Venture capital investment slumped again in the UK in the first three months of the year, according to new data from KPMG this week.
A total of £2.9bn was invested into UK firms in the opening three months of the year, the lowest amount of cash raised in the opening quarter of a year since 2020, according to data from big four firm KPMG.