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Well at least AI itself in favour of graphcore
come on graphcore do a successful funding round
Yeah it's getting ridiculous now. Comparable small cap US tech stocks like Confluent, UI Path and the likes of Workday have also surged recently.
The moribund UK market is keeping this pinned down.
One of the former core companies Lyst I expected to go under but they seem to be doing better reporting £50m revenue for 2023.
Not a game changer but signs of solidity within the portfolio.
And I think core companies Iceye, Aiven, Coachhub, Thought Machine are close to breaking out.
Iceye are doing promo vids for selling multiple satellites for government contracts and they are about £10m a pop. On top of their most recent £100m revenue. And they are still not officially a unicorn.
There also must be some quality in the Forward portfolio. One of theirs, Robin AI raised last month with Temasek leading. I suppose Molten had to sit it out and got diluted but still a positive sign.
Https://files.pitchbook.com/website/files/pdf/2023_Annual_US_VC_Valuations_Report.pdf
OUr pipeline is odd and oversold Seed and pre seed unaffected by market dip. Mature listed tech at historic highs in spite of 2 hot wars. All the steps in between at low valuations but not low enough to justify our discount to an already significantly discounted NAV. Plus our preference share structure.
Sooner or later we will surge , just can't say when. Hold or add. I’ll add a few in my isa April 6th
Added some more MV shares....
using profits from recently sold US stock.
Somehow felt a good time/place to add.
Https://www.theguardian.com/business/2024/feb/09/sp-500-stock-index-5000?CMP=Share_iOSApp_Other
This would directly help molten ventures obtain a price closer to fair value
https://www.theguardian.com/politics/2024/feb/09/jeremy-hunt-may-launch-british-isa-investing-in-uk-company-shares?CMP=Share_AndroidApp_Other
True but if you have valuable ip in the worlds hottest new economic sector needed funding will find a way. might not be a classic funding round. maybe merger of some description.
ive not heard of recent staff reductions/defections so staff think worth hanging about in spite of extreme personal marketability right now.
You could have the most valuable IP in the world but if you have no funds to exploit it....
Good point, I guess it depends on how much the pre-funding valuation is (i.e. the current IP value) but if low then agree that MV likely to be wiped out!
Steph I have said this before.
Graphcore say they need 1bn to keep going until 2027 as that is when they hope to generate significant revenue.
Molten are unlikely to commit more as to play it would mean stumping up a lot of cash.
So if a raise at that scale took place it would wipe out Molten's position through massive dilution.
That is why Sequoia wrote it down to zero on their books.
I assume he has the funding needed sewn up if he has time for a tour
Yep and he's off on a tour to promote it.
His book has just come out:
https://www.eenewseurope.com/en/how-ai-thinks-brings-ai-to-the-people/
Nigel Toon gave up a while back and has spent the last 18 months writing a book, which he wouldn't have had time to do if he was busy running a successful business.
Steph, please Graphcore is dead. If it has no money their tech will be bought from the administrators.
The article has been generated by AI and offers no reference whatsoever for the claim that Graphcore is in a position to compete with Nvidia.
There are other companies in the portfolio that have much better prospects.
“Also, Nvidia faces more competition from AI chip startups Cerebras, Sambanova and Graphcore”
https://www.investors.com/news/technology/artificial-intelligence-stocks/
At least Graphcore gets a mention as in the ring. Graphcore is down to only 21.3 m on our books from 113m March 2022. From there centre of gravity is almost certainly upside. Only needs to be bought out for it’s IP and staff to be worth more than our 21m. Even remotely as a going concern able to take on NVIDIA and it will be worth many times what we currently have it on our books for.
Sang thanks
“Median seed pre-money valuation up 33% in past two years“
https://files.pitchbook.com/website/files/pdf/2023_Annual_US_VC_Valuations_Report.pdf
Our pre seed and seed funds have not been by necessity written down and yet we have a bigger discount to funds that have no seed. Makes little sense to me.
YOur benchmarking of Aiven with Confluent welcome. We actually sold around 10m pounds worth of Aiven on the market in the last half so our NAV on the reminder (83.1m) on that is recently tested and solid.
I also have a much better feeling about Coachhub. Their strategy was to go for big logo wins and it seems to be paying off with recent client wins like Amazon, Booking.com, easyJet, Virgin Atlantic, Cemex and Schneider Electric.
One of the biggest holdings is Aiven. The most recent NAV of 730 has them written down to a value of about 2.4bn dollars. This could still be a bit high but maybe not by that much.
They have a publicly listed comparator in Confluent. At peak bubble they were valued at close to 30bn but are now down to 8bn. This is on a multiple of about 12 of sales to price.
Both companies deliver data infrastructure services on the cloud, and cloud companies were battered a year or so back but cloud spend has been recovering fairly rapidly and their is an additional use case for their services involving streaming data from Generative AI.
Aiven posted revenue of 67m Euro for 2022 but this was almost double the previous year. So I think it's fair to assume 100m plus dollar revenue for 2023. So a multiple of 12 to that would give value of 1.2bn so contribute to a NAV of 365.
Confluent is still seen as suffering from market lack of confidence in small cap tech stocks. Once they break even they could get back over 10bn, which would again make Aiven's valuation seem a lot more realistic.
As would Aiven getting revenue closer to 200bn
Director buys and no director sells a good thing.
Also means there is no take private or take over in the works or they would not be allowed. I fear either as it would lock in our low price in exchange for a minor SP boost of 50% or so. I am holding all until at least a 500% boost and expect that within 3 years if not sooner.
"Another manager has chucked £50K into the hat."
So is that 'incidental' - or maybe a vote of confidence?!
Another manager has chucked £50K into the hat.
For my money I think the NAV/share is accurate and the market for late round fundraising and IPO’s will in due course confirm. Ambiguity and thus suspicion on valuations without market price discovery is overdone.
As soon as a representative sample of our core portfolio achieves fund raising at NAV’s at or above what they are on the MV books for we will soar fast. All fundraising thus far has been at or above our NAV assumed. There is no evidence of the discount the SP assumes is needed.
Anyhow big gains for the patient investor here. 4x over a 2 year horizon quite doable.
Sangijuelas, I do accept that there are many Investment Trusts (IT) that hold listed equities, however, III, PEY and AUGM, which are among the IT which I hold are principally comprised unlisted companies though at different stage of life. If we accept that investing in seed and fledgling companies need very different resource from those which are at the stage to either be spun off as a quoted company or divest to the needs appropriate to the development of that business.
Some businesses require cash, others need introductions to build sales and some need skilled people for compliance.
As far as I am concerned, my cash investment in GROW would, if the IT were wound up tomorrow probably be completely worthless if bean counters from an insolvency outfit were engaged. On the other hand, GROW has a stake in plenty of companies and perhaps a few will be a runaway success in time. It is a risk that I am prepared to take. As a general rule, I tend to comment publicly where I am worried or find the quality of discussion does not merit engagement. (AFC, EZJ, BEG for instance).
There is still 100% for the share price to fall. My hunch is that the NAV is overstated as far as the broad investing community is concerned. That the managers have dipped into their pockets to buy shares, is incidental.
All similar vehicles are on massive discounts to the valuations of unlisted / listed / cash holdings.
IP group has cash at half its value, listed assets and listed assets probably then at 25%, ARIX until recently had the unlisted elements as a free ride, shellalion was until recently on a 60% plus discount.
Need the ipo market to improve and see assets floated at the values they are in the books. Also biotech needs to rerate.