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Draper Esprit PLC (GROW)

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Thursday 08 April, 2021

Draper Esprit PLC

Investment and exit update

RNS Number : 7528U
Draper Esprit PLC
08 April 2021
 

8th April 2021

 

Draper Esprit plc

 

("Draper Esprit", "the Group" or the "Company")

 

Investment and exit update

 

Draper Esprit (LSE: GROW, Euronext Growth: GRW), a leading venture capital firm investing in and developing high growth digital technology businesses, today provides an update on recent developments in its portfolio in advance of full year reporting for the year ended 31 March 2021. The Company will provide a full year trading update on 26 April 2021 and will announce full year results on 14 June 2021.

 

Key highlights are as follows:

· Strong momentum continues, investing in new portfolio companies across a broad array of technology applications and several follow-on rounds in existing portfolio companies

· Invested £162 million in year ended 31 March 2021

· Increased investment cadence with £96 million invested in the second half of the year, bringing the full year total to £128 million, with a further £34 million from EIS and VCT co-investment

· Earlybird partnership delivering good uplifts with Series C and D rounds from Aiven and Sennder respectively

· Realisations for the year total over £200 million with full recent exit from Decibel by way of a trade sale to Medallia, and recent partial realisation of Trustpilot adding to first half realisations of £106 million

· Strong deal pipeline with over £50 million of investment committee approved deals

 

 

In addition to the recent announcements in relation to Trustpilot's successful IPO and Ui Path's significant funding round, recent portfolio developments include the following:

 

M-FILES

 

In January, the Company participated in an $80 million investment round in portfolio company M-Files. The round was led by Bregal Milestone, a European growth capital firm, with current investors Partech, and Tesi also participating. Draper Esprit first invested in M-Files in 2013 and has participated in multiple funding rounds supporting the company's continued strong growth.

 

M-Files is an intelligent information management company that is using AI technologies in its unique Intelligent Metadata Layer. Thousands of organisations in more than 100 countries use M-Files for managing their business information and processes, including NBC Universal, OMV, Valmet, SAS Institute and thyssenkrupp.

 

SENNDER

 

In January, Sennder announced a $160m Series D round with investors including Accel, Lakestar, HV Capital, Project A and Scania. Sennder is an Earlybird VI portfolio company.

 

Sennder is Europe's leading freight forwarder, offering shippers access to a connected fleet of thousands of trucks. It focuses on the digitisation and automation of all road logistics processes. By leveraging its proprietary technology, it has built an ecosystem that leads the industry with a new degree of transparency, efficiency and flexibility.

 

AIVEN

 

In March Aiven, an Earlybird VI portfolio company and part of Draper Esprit's core portfolio, announced that it had successfully raised $100 million in a Series C round valuing the company at more than $800 million. The round was led by Atomico, with Salesforce Ventures and World Innovation Lab joining as new investors alongside participation from existing investors including Earlybird.

 

Aiven will use the proceeds to bring new products to market, increase contributions to developing open source technologies and continue the company's international expansion.

 

Headquartered in Helsinki with offices in Berlin, Sydney, Toronto and Boston, Aiven provides managed open source data technologies, like PostgreSQL, Kafka, and M3, on all major clouds. With Aiven, companies of all sizes, from innovative startups to global leaders like Comcast, Fiverr, Vidio, Wolt and more, can have a modern, fully-functional open source data infrastructure from different regions in the world in minutes based on their needs with end-to-end security, set-up, maintenance and 24/7 monitoring across all major public cloud platforms.

 

Draper Esprit's gross fair value holding in Aiven increased by approximately £32 million as a result of the fundraising round to approximately £44 million (including new capital).

 

FREETRADE

 

In March Draper Esprit participated in a $69 million Series B fundraising round for existing portfolio company Freetrade. The round was led by Lane Capital and the funds will help to accelerate Freetrade's growth in international markets and allow the team to scale their product and technology.

 

Freetrade is a commission-free investment platform, founded by CEO Adam Dodds, and CMO Viktor Nebehaj. The app launched in the UK in 2018 and has scaled up to serve over 600,000 customers (as of 1 March 2021). Prior to this Series B funding round, Freetrade has raised approximately $42 million (£30 million) in seven crowdfunding rounds and a Series A led by Draper Esprit. Unlike traditional DIY brokers in the UK, Freetrade does not charge commission on individual trades, instead operating a 'freemium' business model whereby the company charges monthly subscriptions for a premium account, a stocks and shares ISA, and a SIPP.

 

Draper Esprit's gross fair value holding in Freetrade increased by approximately £5 million as a result of the fundraising round to approximately £20 million (including new capital). It is anticipated that Freetrade will join the core portfolio when we report our results for the year ended 31   March 2021.

 

DECIBEL

 

In March, Medallia announced that it had agreed to acquire Decibel, an existing portfolio company, for $160 million in an all cash deal. This acquisition represents a fair value uplift of £4 million, resulting in a return of approximately £14 million, with a 1.4x multiple on invested capital.

 

Headquartered in London, Decibel is a SaaS business set up for the future of retail. Its unique smart machine learning software tracks customer interactions, collects +100 data points, locates opportunities for improvement, prioritises them, and can even trigger real-time responses to rectify issues. The software is already being utilized by 250 major brands names including Lego, British Airways, and Tesco.

 

 

New portfolio Investments:

 

RIVERLANE

 

In January, Draper Esprit led a $20 million Series A investment round in Riverlane with a $12 million investment (including $7 million from plc), the ground-breaking quantum computing software specialist.

 

This is an exciting new investment for Draper Esprit and is in line with a heritage of supporting world-changing technologies as they scale. Spun out of Cambridge University, the company develops software that transforms quantum computers from experimental technology into commercial products.

 

Quantum computers are designed to solve problems that are not possible to solve on classical computers. This step change in computing power will impact a variety of industries - from pharmaceuticals to logistics - and as the quantum industry develops it's vital that software is built on a solid foundation. Deltaflow, the quantum operating system developed by Riverlane, creates a thriving quantum ecosystem, offering software developers access to a range of quantum computers to best meet their needs. Providing a shared language for applications and quantum hardware development, Deltaflow is the infrastructure for great engineering and collaboration across the industry.

 

FOCALPOINT

 

In March, Draper Esprit, as sole investor, invested £6 million in FocalPoint, the deep-tech company revolutionising the accuracy of GPS and other global satellite positioning systems (GNSS).

 

FocalPoint operates out of Cambridge and Bristol, with founders drawn from Cambridge University's Experimental and Theoretical Physics department, BAE Systems and the European Space Agency. Its world-leading IP solves the fundamental limitations of satellite positioning systems such as GPS, Galileo, GLONASS and BeiDou. Its technology can measure the direction of arrival of satellite signals on consumer grade technology for the very first time and delivers 10x improvement in accuracy, sensitivity and integrity of satellite positioning for any device.

 

The company plans to use the funds raised to accelerate deployment of next-generation positioning technology into chipsets and devices across mobiles, wearables, vehicles and IoT.

 

 

Martin Davis, Chief Executive Officer of Draper Esprit, commented:

 

"Over the last few months, we have continued with the application of our strategy of accelerating our capital deployment to invest in high growth opportunities in our existing portfolio and to secure exciting new investment opportunities. In the year ended 31 March 2021 we have invested over 40% more than in the prior year, with a notable acceleration even in the second half on the first. We continue to be disciplined in our investment criteria and also in managing the balance of the portfolio. The recent activity just goes to show how much opportunity there is in the European technology sector, making it a very exciting time for us as an investor, as reflected in our strong deal pipeline. We have helped 10 unicorns on their growth journeys to date and have confidence that we will see many more."

 

 

-ENDS-

 

Enquiries:

Draper Esprit plc

Martin Davis (Chief Executive Officer)

Ben Wilkinson (Chief Financial Officer)

+44 (0)20 7931 8800

Numis Securities

Nominated Adviser & Joint Broker

Simon Willis

Richard Thomas

Jamie Loughborough

+44 (0)20 7260 1000

Goodbody Stockbrokers

Euronext Growth Adviser & Joint Broker

Don Harrington

Charlotte Craigie

Linda Clarke

+44 (0) 20 3841 6202

Powerscourt

Public relations

Elly Williamson

Donjeta Miftari

+44 (0)7970 246 725 /

+44 (0)7961 628 862

 

About Draper Esprit

 

Draper Esprit is one of the most active venture capital firms in Europe, investing in disruptive, high growth technology companies. We believe the best entrepreneurs in Europe are capable of building the global businesses of the future. We fuel their growth with long-term capital, access to international networks and decades of experience building businesses.

 

Currently, Draper Esprit is a shareholder in a diverse portfolio of 67 companies with 15 of those part of our core portfolio which accounts for over 60% of our holdings. Our core companies include UiPath, Aircall, Graphcore and Revolut. We invest across four sectors: Consumer Technology, Enterprise Technology, Hardware and Deeptech, and Digital Health and Wellness, with highly experienced partners constantly looking for new opportunities in each. We look for high-growth companies with strong IP, powerful technology, and the management teams to deliver success. They operate in new markets, with serious potential for global expansion. We also look for businesses with the potential to generate strong margins to ensure rapid, sustainable growth in substantial addressable markets.

 

Draper Esprit provides an opportunity for public market investors to access these fast-growing tech businesses, without having to commit to long term investments with limited liquidity. Since IPO in June 2016, we have deployed circa £500m+ capital into fast growing technology companies and have realised over £300m. In October 2020 we raised gross proceeds of circa £110m to help us capitalise on a European VC market which is expanding rapidly but is still less than one quarter of the combined size of the US and European market by value. It will also allow us to capitalise on the transition to a digital future that has been given added impetus as a result of the recent pandemic.

 

For more information, go to https://draperesprit.com/

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