from Molten Ventures Plc (isin : GB00BY7QYJ50)
Final Results
Molten Ventures Plc (GROW; GRW) Molten Ventures Plc ("Molten Ventures", “Molten”, “the Group” or the "Company") FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024 Molten Ventures (LSE: GROW, Euronext Dublin: GRW), a leading venture capital firm investing in and developing disruptive, high-growth technology companies, today announces its final results for the year ended 31 March 2024. Financial highlights
*The above figures contain alternative performance measures (“APMs”) - see Note 35 for reconciliation of APMs to IFRS measures in the Annual Report. **EIS and VCT funds are managed by Molten Ventures plc group but are not consolidated. See Accounting Policies on page 116 and Glossary on page 162 for defined terms in the Annual Report.
Performance highlights • Investments of £65m during the year from the Molten Ventures balance sheet, with a further £37m from the managed EIS/VCT funds, alongside cash proceeds from realisations during the year of £39m • Completed share-for-share acquisition of Forward Partners plc (‘Forward Partners’) in March 2024 • Stake acquired in Seedcamp Fund III in February 2024, continuing the strategy of acquiring portfolios with high potential for near-term realisation • Committed to 6 new seed funds via our Fund of Funds programme, bringing the overall Fund of Funds portfolio to 80 funds. • Weighted average revenue growth of Core portfolio forecast to be over 50% for calendar year 2024 • Over 85% of companies in the Core portfolio with at least 18 months of cash runway as at 31 March 2024 (based on existing budgets and growth plans) ESG highlights • Launched inaugural stand-alone Sustainability Report on our website • Delivered tailored climate workshops to portfolio companies with the aim of improving their climate literacy and alignment to the Net Zero transition, in line with the commitments set out in our Climate Strategy • Joined the Steering Group of ESG_VC, became a member of Ventures ESG and continued to report against external standards and frameworks including PRI, CDP, TCFD, Investing in Women Code and SECR • Formally launched the Esprit Foundation (part of the Molten Ventures Group) and awarded its first grants to the Social Mobility Foundation, Included VC and Foundervine Post period-end • On 30 April 2024, Hologic, Inc, a NASDAQ listed entity, signed definitive agreement to acquire Endomagnetics Ltd. (‘Endomag’). The acquisition, which is subject to completion conditions and regulatory approval as well as working capital and other customary closing adjustments, values Endomag at approximately $310 million, which is modestly above NAV Capital Allocation Policy As reported in our announcement on 30 April, we provide an update to our capital allocation policy which outlines how the Company intends to deploy its capital resources across NAV per share accretive opportunities in order to deliver long-term value for its shareholders whilst ensuring the Company has appropriate liquidity headroom. 1. The Company will continue to focus its efforts on deploying capital into exceptional primary and secondary investments 2. The Company manages liquidity risk by maintaining adequate reserves with ongoing monitoring of forecast and actual cash flows. Capital resources are managed to ensure there is sufficient headroom for 18 months’ rolling operating expenses 3. Given the strong realisation pipeline, the Directors likewise believe that the current share price provides an opportunity to deliver accretive benefits to shareholders by purchasing its own shares at the prevailing discount levels. The Company therefore intends to allocate a minimum of 10% of realisation proceeds to buy back its own shares, utilising the existing authority granted to the Board at the AGM The Company will continue to balance the pipeline of new investment opportunities against the ability to drive returns to shareholders through share buy backs whilst maintaining sufficient reserves.
Martin Davis, Chief Executive Officer, Molten Ventures, commented:
“This has been a productive year for Molten. We’ve continued to enhance our innovative platform to capture the exceptional investment opportunities available in backing high growth, disruptive, UK and European technology firms. The underlying performance of our portfolio companies remain strong, with valuations continuing to stabilise as the macroeconomic environment shows signs of improvement.
“Looking ahead, we expect to see a step up in realisations, in the region of £100 million of capital back to the balance sheet this financial year, the proceeds of which we expect to deploy towards NAV per share accretive opportunities as outlined in our capital allocation policy today, and in doing so, continuing to maximise value for our shareholders”.
As previously announced, a live webcast presentation including Q&A will be held today at 9.00am for analysts and will be available on https://brrmedia.news/GROW_FY_24. Conference call details for the Q&A are available upon request via Powerscourt. In addition, Molten will provide a further presentation for retail investors via the Investor Meet Company platform on at 10.00 on Friday 14 June. Existing and potential investors can sign up to Investor Meet Company for free via the link below.
https://www.investormeetcompany.com/molten-ventures-plc/register-investor
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About Molten Ventures Molten Ventures is a leading venture capital firm in Europe, developing and investing in disruptive, high growth technology companies. We inject visionary companies with energy to help them to transform and grow. This energy comes in many forms - capital, of course, but also knowledge, experience, and relationships. We believe it is our role to support the entrepreneurs who will invent the future, and that future is being built, today, in Europe. As at 31 March 2024, Molten Ventures had a diverse portfolio with shareholdings in 118 companies, 20 of which represent our Core holdings and account for 62% of the Gross Portfolio Value. Our Core companies include Thought Machine, Coachhub, Aiven, Ledger and Aircall. We invest across four sectors: Enterprise Technology, Hardware and Deeptech, Consumer Technology, and Digital Health and Wellness, with highly experienced partners constantly looking for new opportunities in each. We look for high-growth companies operating in new markets, with high potential for global expansion, strong IP, powerful technology, and strong management teams to deliver success. We also look for businesses with the potential to generate strong margins to ensure rapid, sustainable growth in substantial addressable markets. A member of the London Stock Exchange’s FTSE 250, Molten Ventures provides a unique opportunity for public market investors to access these fast-growing tech businesses, without having to commit to long term investments with limited liquidity. Since our IPO in June 2016, we have deployed over £1bn capital into fast growing tech companies and have realised over £520m to 31 March 2024. For more information, go to https://www.moltenventures.com/ Chairman’s introduction In the years preceding my appointment, Molten developed and built an innovative platform, cementing itself as one of Europe’s leading venture capital firms. We support high-growth, disruptive technology companies, and through our listing on the London Stock Exchange and secondary listing on Euronext Dublin, we provide access to the returns attainable from venture capital to both institutional and retail investors. I am looking forward to helping Molten Ventures build an even more successful business in the coming years. After two years of a very challenging economic and market backdrop, we are beginning to see some signs of increased market stability, helped by improved visibility on global interest rates. Our portfolio remains in good health and the overall underlying performance of our assets has been strong. While reduced M&A activity since the end of the pandemic has resulted in fewer transactions and correspondingly fewer realisations, the coming year shows more promise, highlighted most recently by the announced sales of Perkbox in the period, and Endomag post-period end, both subject to completion conditions and regulatory approval. We anticipate further exits in the course of the current financial year. In the past year, the management team has continued to enhance the platform through the equity capital raise, the all-share acquisition of Forward Partners and the subsequent purchase of a stake in Seedcamp Fund III. These were important initiatives in ensuring that Molten is favourably positioned going forward. We have the firepower to pursue attractive opportunities in a buyer’s market for venture capital investment in our preferred areas of expertise. I was pleased to welcome some of the portfolio companies and colleagues coming across with Forward Partners at Molten’s annual Investor Day in February, which was also my first. I have also begun a programme of meeting many of our major Shareholders, as well as industry bodies and other key stakeholders for the Group. Our AGM in 2025 will be a policy approval year for executive remuneration, and we will be proactively engaging with Shareholders on this matter in the months ahead. In January, the Financial Reporting Council announced the revisions it is making to the UK Corporate Governance Code that enhance the transparency and accountability of UK public companies, as well as help support the growth and competitiveness of the UK, and preparation is well under way to ensure that Molten continues to be fully compliant. In my role as Chairman, ensuring Molten has best-practice governance is an important priority. We commenced our first externally facilitated Board evaluation in February, and more can be found on this in the Governance section of this report. We will continue to address such issues as Board diversity, mindful of the Parker Review’s recommendations. Ensuring that Molten’s culture, ethos and mission is carried across future key employees is critical, and succession planning both for the Board and executive management is underway. We refer to this in more detail in the Nomination Committee report. We appointed Lara Naqushbandi as a Non-Executive Director in September. Lara brings with her a wealth of global commercial, strategic, and investment experience. Gervaise Slowey has succeeded Richard Pelly as the designated Non-Executive Director for employee engagement. ESG issues are important to us, and as we have stated in the past, Molten’s contribution to sustainability is two-fold, both through our consideration of ESG in investment decision-making and our excitement about investment opportunities in the climate tech space in particular. We also continue to develop our reporting and remuneration structure in alignment to ESG and wider sustainability best practice. More information can be found in the ESG pages of our Annual Report, and in our inaugural stand alone Sustainability Report which has also been released today. I am conscious that Karen Slatford and Grahame Cook (who adeptly covered her role as Interim Chair) will be hard acts to follow. They have served Molten with distinction over several years – Grahame continues to do so as Senior Independent Director and Chairman of the Audit, Risk and Valuations Committee – and have helped to develop the firm into the innovative venture capital investor it is today. I would like to thank them both for their leadership of the Board, and in particular Grahame for an informed and seamless handover. I look forward to supporting management and the wider team in continuing to develop a platform that provides inspirational founders with long-term capital, access to international networks and decades of experience building businesses. Finally, I would like to thank our Shareholders for their support during the past year as well as our Executive Directors, and, importantly, each of our employees who are so vital in ensuring the continued growth of Molten Ventures plc. Laurence Hollingworth Chairman
CEO’s statement Overview It has been a busy and productive year for Molten Ventures, marked with significant achievements amid an economic backdrop that has been challenging for most technology companies and those who invest in them. We continued to develop our platform, operating model, and acquisition strategy while simultaneously navigating ‘higher-for-longer’ interest rates, inflationary pressures and the ongoing geopolitical tensions which have cast a cautionary shadow over some notable signs of stabilisation in the second half of the year. Our focus within this context has been on what we can control. We have maintained discipline around our own investment process and worked closely with our portfolio companies to extend cash runways, control costs, and retain talent. Our business performance and the revenue growth of our portfolio companies has remained strong, and the disruptive entrepreneurs we have backed across UK and Europe continue to transform the industries in which they operate. Our adaptable model allowed us to act quickly to identify opportunities at attractive valuations in the year, with a focus on providing value for our Shareholders. Data from previous downturns suggests that investments made in periods of economic decline have yielded some of the greatest returns of all vintages for technology investors. We continued to support innovation through our fundraising activity, and by offering exposure to investors of privately owned technology assets in the year. Forward Partners acquisition In November 2023, we announced a share-for-share acquisition of Forward Partners, adding a portfolio of over 40 companies. The acquisition, completed in March 2024, blends the maturity of our assets with a more diverse pipeline of earlier-stage companies for follow-on investment. Forward Partners was founded in 2013 by Nic Brisbourne, a former Molten Partner. Forward Partners investment strategy has been focused on earlier-stage businesses than Molten has traditionally invested in previously. We see significant opportunity for continued growth in these portfolio companies and to accelerate value creation. The Molten platform can provide the winners with the additional support and resource to reach their potential and generate returns. We extended an official welcome to Nic Brisbourne and the rest of the Forward Partners team in March, with the history between Molten and Forward allowing for a smooth integration which can be attributed in part to a similar set of experiences, investment ethos and cultural affinity. Several of our Forward Partners colleagues have now joined our investment and finance teams, leading to cost synergies and alignment across operational functions. Alongside the Forward Partners transaction we successfully completed an oversubscribed fundraise of £55 million (net of fees) by way of issuance of new shares on the London Stock Exchange, and the Euronext Dublin, to capitalise on attractive primary and secondary investment opportunities during a period of market dislocation. Seedcamp III acquisition Our acquisition of a stake in Seedcamp III in February 2024, builds on Molten’s strategy to access exceptional Secondary investments at attractive valuations. Our Secondaries acquisition strategy acts to leverage our network in the venture capital market to provide liquidity to Limited Partners in later life funds, with a focus on acquiring portfolios of high-quality assets with nearer-term visibility on realisation opportunities. To date, the Secondaries strategy has delivered 2.5x returns (as a multiple on invested capital). The Seedcamp acquisition is an illustration of our strategy in action and comes on the back of a strong track record of Secondary investments; including Seedcamp Funds I & II, Earlybird DWES Funds IV and Earlybird Digital East Fund I. Third-party asset activity Elsewhere, we continued to make progress with our third-party assets strategy through the launch of our Irish-focused fund in July 2023, which continues our long-standing relationship with the Ireland Strategic Investment Fund as a strategic partner – as we continue to back promising Irish technology companies and founders, in a key European centre for the global tech industry. We are pleased to welcome Isabel (‘Izzy’) Fox as the Head of Third-Party Funds, a new strategic role aimed at expanding the firm’s impact through various targeted investment funds complementing its publicly listed core model, EIS and VCT investment vehicles. With Izzy’s appointment, Molten intends to make further progress in building its third-party assets under management and associated income, including via its syndicated Fund of Funds programme and other third party private funds strategies. Venture capital as an asset class has typically generated equal or better returns compared with listed equities or other alternative asset classes, and the UK Government is keen that Defined Contribution (‘DC’) pension schemes are able to invest in these types of assets. This has the full support of the British Private Equity & Venture Capital Associations (‘BVCA’), and is something we at Molten are supporting wholeheartedly. Facilitating access to venture capital for high-growth companies remains a priority for UK and European governments, and forms part of the UK’s proposed pension system reforms. Molten Ventures is among the 20 signatories to the BVCA’s Venture Capital Compact, supporting the UK government’s Mansion House initiative to improve DC pension schemes’ access to venture capital investments. Molten Board Our most valuable asset is our people, and we continue to bolster our strength and expertise year-on-year. We appointed Lara Naqushbandi as a Non-Executive Director in September 2023, followed by the appointment of Laurence Hollingworth in January 2024 as Chair of the Board. Lara brings a wealth of experience from previously held roles in both finance and sustainability, and Laurence brings significant capital markets, investment banking and leadership experience to Molten. Integrating ESG We continue to develop our ESG agenda as part of our commitment to being a responsible investor. The integration of ESG across our portfolio is a business priority throughout the full investment cycle, and through our portfolio management we continue to fulfil our broader corporate purpose of advancing society through technological innovation. We aim to invest in businesses and entrepreneurs who recognise and embrace the need for more sustainable practices, and strive to improve their ESG performance to contribute towards a more sustainable and prosperous future for all. You can read more about these efforts in our Sustainability Report, also published today. During the year, we have made significant progress against the commitments set out in our Climate Strategy, particularly with regards to our portfolio engagement programme. We have also continued to disclose against PRI, CDP, TCFD and the Investing in Women Code. Finally, The Esprit Foundation awarded its first four grants to charities and organisations, whose objectives focus on the advancement of education for the public benefit (especially those aged under 30), with particular emphasis on the fields of technology, business and entrepreneurship. Market environment and the Molten model The cost of capital remains a significant factor for investors, and we have adapted to an environment of higher-for-longer interest rates. More recently, we have seen forecasts for interest rates stabilising, which is set to allow greater visibility of the cost of capital over the next 12 to 24 months. We have seen early shifts towards fresh capital raising, with a much higher proportion of ‘flat rounds’, and in some cases small up-rounds, compared to last year. General Partners are typically raising less and taking longer to close funds due to a more restricted liquidity environment. We believe the visibility over the interest rates provides further confidence across the private market valuations. Although public and private markets are interconnected, any anticipated rise in confidence among public investors will take time to reflect in private market valuations. We remain confident that our unique and flexible model will lead to significant returns for our investors. Financial position and our portfolio We have retained the discipline of preserving our balance sheet, and raised funds, which has provided us with a sufficient cash position of £57 million, along with the £60 million additional headroom that our undrawn revolving credit facility provides. I am pleased to say that these measures have provided us with the ability to support our existing portfolio and to invest in high-quality opportunities where identified. Our portfolio has remained resilient and well-funded, and we have continued to realise investments which provides capital back for reinvestment in a period of muted liquidity. The Gross Portfolio Value at 31 March 2024 was £1,379 million, which is marginally up from £1,371 million at 30 September 2023, predominantly resulting from investments in Seedcamp III and Forward Partners. We have generated realisations of £39 million and a fair value uplift (excluding the impact of FX) of £6 million. We are rightly proud of our strong track record, having deployed more than £1 billion of capital and realised over £520 million since our IPO in 2016, achieving a 16% average return per year for our Shareholders. Realisations and exits During the period, realisations remained fairly low relative to previous years as a consequence of uncertain global macroeconomic conditions and the resulting downturn in corporate transactions across almost all industries and markets. While we do not anticipate the IPO market for high-growth technology companies to return to pre-downturn levels immediately, there is evidence that some high-tech companies are publicly considering an IPO. Historically, most of our exits have been through trade sales, and we have seen an uptick in M&A enquiries, alongside the exits of Perkbox and Endomag, subject to completion conditions and regulatory approvals (both due to take place above our holding NAV). Capital allocation With a number of realisation processes either underway or planned across the portfolio, we expect to be able to deliver in the region of £100 million in realisations this upcoming financial year alongside our existing meaningful cash resources. As reported in our announcement on 30 April, we provide an update to our capital allocation policy which outlines how the Company intends to deploy its capital resources across NAV per share accretive opportunities in order to deliver long-term value for its shareholders whilst ensuring the Company has appropriate liquidity headroom. 1. The Company will continue to focus its efforts on deploying capital into exceptional primary and secondary investments. 2. The Company manages liquidity risk by maintaining adequate reserves with ongoing monitoring of forecast and actual cash flows. Capital resources are managed to ensure there is sufficient headroom for 18 months’ rolling operating expenses. 3. Given the strong realisation pipeline, the Directors likewise believe that the current share price provides an opportunity to deliver accretive benefits to shareholders by purchasing its own shares at the prevailing discount levels. The Company therefore intends to allocate a minimum of 10% of realisation proceeds to buy back its own shares, utilising the existing authority granted to the Board at the AGM. The Company will continue to balance the pipeline of new investment opportunities against the ability to drive returns to shareholders through share buy backs whilst maintaining sufficient reserves. Outlook Our flexible investment model has consistently demonstrated its resilience and ability to generate significant returns. We have implemented a capital allocation policy that aligns with our current share price discount to NAV and the anticipated timeline for realisations. This policy ensures that we are well-positioned to maximise value for our Shareholders while maintaining a prudent approach to capital management. We remain cautiously optimistic on the stabilisation of interest rates, and the early signs of renewed capital raising activity indicating a potential shift towards a more favourable investment climate. The strength of our business model stands us in good stead. I extend my thanks to the Molten team and look forward to delivering on our strategy in the year to come. Martin Davis Chief Executive Officer
Market overview Venture capital: an overview We believe that venture capital works best when VCs give their energy to help companies succeed. At Molten, this ‘energy’ can come in the form of capital, experience or knowledge, as well as building relationships with our portfolio companies that demonstrate our commitment for the long term. In its most basic form, venture capital (VC) is a form of financing where capital is invested into a company—a privately held start-up or small business—in exchange for equity or convertible debt in the company. While investing in early-stage technology companies comes with a degree of risk, VCs are driven by a conviction that tomorrow’s problems won’t be solved by today’s conventions, and that the process of rapid technological innovation and transformation is set to continue. As well as generating returns for investors, VC is about empowering start-up businesses with capital, mentorship, and advice to help them succeed in their endeavours, and in doing so, helping them create products and services that improve the human experience. Sometime these endeavours are connected to some of the world’s largest and most complex challenges, and at other times they could involve entirely new problem sets which are yet to be clearly defined. Starting a new business is always a daunting experience, and entrepreneurs often find themselves having to educate investors, customers, and the broader market as to why they exist at all. Companies raise money from VC investors to: 1. help build their business and products 2. recruit and retain a good pipeline of talent 3. make acquisitions and invest further into intellectual property 4. acquire access to relevant networks and relationships, and 5. gain advice and guidance from seasoned operators VC investors take the opportunity to assess companies, and invest in those they believe to have highly credible management teams, a unique product offering, and a framework to execute a business plan to become a prominent competitor in their respective market niche. There are three major VC markets globally which are the US, Europe, and Asia, and in 2023, over $300bn was invested between those regions in start-up businesses. While the US and Asia are larger than the European VC market, Europe is growing at a faster rate, and the capital sought to support that market growth is failing to keep pace. For this reason, Molten continues to see great opportunities to invest in the category-defining businesses of tomorrow, with a focus on investing in the best venture-stage opportunities throughout Europe. Who are Molten and how do they fit in the VC sphere? Molten disrupted the conventional venture capital model, recognising the limitations of traditional approaches in driving sustainable, transformative growth by pursuing an IPO in 2016. Our focus is to collaborate with entrepreneurs who share in our conviction that disruptive innovation is imperative for building enduring, category-defining businesses. Molten’s legacy traces back to 2006 when Esprit Capital Partners was established as a spin-off from a larger asset manager. Since then, we have scaled into a well-established VC platform, supported by a team of over 60 professionals dedicated to investing in promising start up and growth-stage businesses. While headquartered in London and Dublin, Molten’s investment platform has a pan-European mandate, spanning the entire lifecycle from seed stage (typically as a limited partner) to later stages (typically as a direct investor) through to IPO or acquisition. Our adaptable platform is designed to facilitate long-term investments and support companies throughout economic cycles, with a focus on businesses capable of fundamentally disrupting the status quo and becoming category leaders. As a minority equity investor, Molten fosters early relationships with portfolio companies, and adds value through active Board participation. Beyond capital, we provide entrepreneurs and management teams with strategic advice, mentorship, and access to a global network, which creates outcomes for all stakeholders, including our Shareholders. Molten operates a unified strategy across three vehicles: the plc, and the managed EIS and VCT funds. Where investments qualify, this structure enables us to combine three capital pools to invest in the UK and Europe’s most promising technology companies in a risk-adjusted and tax-efficient manner for our respective investors. Additionally, our Fund of Funds programme, established in 2017, enables us to gain exposure and invest in the most promising seed and early-stage venture capital funds across the UK and Europe. Seed and early-stage investing is a highly localised endeavour, requiring deep networks within local ecosystems of angel investors, incubators, and technology entrepreneurs. We believe that nascent businesses are best funded by investors who can engage founders locally or within specific verticals, and our Fund of Funds programme (complemented by the acquisition of Forward Partners) allows us to effectively leverage this expertise. Our decision in 2016 to IPO on the AlM growth market of the London Stock Exchange, and Euronext Dublin, thereby adapting beyond the traditional GP/LP model to become one of the largest public venture capital firms in Europe, was partly driven by our commitment to ‘democratise’ the returns available from venture capital as an asset class, and make the rewards of our investments accessible to public market investors, not just a small group of Limited Partners. Our innovative structure as a public company allows us to direct capital from institutional and retail investors towards our portfolio companies. We benefit from an evergreen balance sheet strategy that offers flexible investment terms, and allows Molten to focus on helping portfolio companies grow, while evaluating the market for optimal exit conditions, which we aim to achieve above NAV to maximise value for our Shareholders. This structure also provides us with the flexibility to raise capital from public market investors, including retail investors via the PrimaryBid platform, giving us the ‘firepower’ to pursue investment opportunities. Our direct investment strategy primarily focuses on early and growth-stage opportunities. We maintain a balanced portfolio that is diversified across four key sectors of consumer tech, enterprise tech, digital health and wellness, hardware and deeptech. Our market at a glance 17% European VC market CAGR (2015-2023) $66bn European VC market valuation (2023) 189 No. of active unicorns in Europe combined value over $500bn (2023)
Market events that have occurred in VC in the past year Over the past 12 months the global economy has experienced stabilised high interest rates across most major currencies, including the USD, EUR and GBP. Towards the end of 2022 (and into the beginning of 2023) asset prices were volatile which seeped into the private markets. Across 2023 and early 2024, both valuations and volatility began to stabilise, with recent new heights on the S&P 500, STOXX 600, and the FTSE 100. Going forward, the consensus for global monetary policy appears to favour dovish sentiment which historically has supported upside potential for equity prices. As these market dynamics filter into the VC market there is a sense of cautious optimism for new compelling investment opportunities. In September 2023 we saw the highly anticipated Tech IPO for ARM Holdings which was widely regarded as a barometer for the IPO market. ARM successfully raised nearly $5 billion and has shown promising after-market performance. This is evidencing that ‘good deals can get done’ and that the public market is ready to support outstanding high growth technology businesses. The market is showing signs of improvement, and technology businesses are coming back into focus to drive performance through innovation. Much of the tailwind experienced in the technology market over the past 12 months has been driven by the potential productivity gains through rapid adoption of artificial intelligence. Microsoft’s most recent investment in Open AI valued the business at $80 billion, NVIDIA’s market cap had crossed $2 trillion, surpassing Google and closing in on Apple and Microsoft. At the earlier stages of the business lifecycle, Molten is seeing companies take the next step in this market and focusing more closely on real-world applications to drive productivity gains. Private markets typically lag public markets and 2023 displayed the largest contraction in European VC within the last ten years. 2023 saw $66 billion invested in European VC deals which was down 42% from the previous year. Much of that contraction was due to liquidity restrictions in a challenging fundraising environment coupled with repricing dynamics as a result of a higher interest-rate environment. Given the public sphere showed more promising returns than anticipated over the last 12 months to March 2024, we anticipate seeing improvements in the private market over the next 12 months due to that lag effect. Currently in 2024, we are witnessing more capital invested in European VC than in 2023. Since 2015 that continues to follow a growth trajectory for the market which is scaling more rapidly than the US or Asia. Looking closely at the quarterly investment data for European VC (see charts on bottom of this page), it was the larger rounds in excess of $100 million that saw the biggest contractions throughout 2023, while investment in smaller/earlier rounds continued to persist at more modest valuations. Q1 2024 saw some larger deals (in excess of $250 million) come to market, raising over $7 billion in aggregate in the first quarter. Comparatively, the total investment in rounds at or above $250 million over all four quarters in 2023 was only $11 billion. Heading into the remainder of 2024, Molten sees value opportunities in the market. With the recent acquisition of Forward Partners, and having acquired a stake in Seedcamp III, we have an expanded portfolio of assets, combined with those in our Fund of Funds programme, which continue to present us with unique investment opportunities. With this in mind, Molten is well positioned to invest in the most interesting and competitive deals in the market throughout the next 12 months.
Our strategy Our strategy consists of six clear objectives, underpinned by our corporate purpose ‘to advance society through technology and innovation’.
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