Adrian Hargrave, CEO of SEEEN, explains how the new funds will accelerate customer growth Watch the video here.
Thanks
Good evidence that 3 quarter falls in late stage tech start ups has stabilized or reversed itself. No justification for our SP which assumes it will keep falling.
SP will recover slowly and jump suddenly if one or two of our core portfolio go for a funding round and get an increased valuation to what is on our books. Graphcore the obvious candidate to go for a funding round in the improved AI environment we now have.
Tech vc private pipeline getting repaired all along it’s length.
https://pitchbook.com/items/files?eu=yQk2%2BlrYNIMauZa%2FSzm5A%2BrDx4RdHOKwIWgi8zyQMN%2B2JkAjRs2E%2Bs9rzu6N%2Fb6l1mrnqGUz6NZPoszdpYeXeDBptvaXS4z9cnQpG67U6Ko%2B7SRnsbCUz2ko6MquvkQ4
Back to levels of June 2021 the beginning of the covid surge. And nearly 40% above the October 2022 trough. The sector just wants to go up -GROW excepted for now. This is not the dot com boom and bust when good ideas with no sales were funded indiscriminately. Our dip is an overreaction to news that is bad but nowhere near as bad as our dip implies it is.
Money flowing back into listed tech especially AI listed tech bound to eventually flow upstream to unlisted funding round tech and especially ai tech such as the core portfolio companies we have. As we approach our final results and with that more reassuring valuation detail we should rise quickly from here.
Shortcut to us getting back our mojo (sp above 10 quid) is for the late round unlisted tech funding for the funding round market to come back to 2019 levels and sales multiples. That might occur this year. Fear of the late funding round market collapsing (no evidence of that just a theory it might) is what is holding our SP below 5 quid. Fear is if late funding round market is frozen than our core companies that have exhausted their runway, cut back on expenses as much as they can and need to go to market will get a humiliating share diluting down round well beyond the implied theoretical down round currently on our GROW books. No evidence that is happening (some who went to market got a valuation in line with previous valuations) but a theoretical possibility if the late round market deteriorate further. Evidence it will deteriorate further is surely the health or not of the market for listed tech. At least at the top end listed tech is now in line with 10 year trends and 2021 just a blip upwards that has corrected itself.
2021 and the first half of 202 was out of trend but not massively out of trend for our GROW valuations. Not all of our companies went to market in that period and those that did we discounted a bit, plus GROW’s preference share effects not properly priced in and the conservatism of our valuations relative to what they might have been in September 2021 at the peak mean we were never that far “overvalued”’ in 2021 and with organic growth of the portfolio we should be OK on our valuations as they stand even in this market with more chance of an upside correction than a downside correction.
Kudus to you for calling out cazoo’s overvaluation when it was still riding high.
even you did not predict what a load of bs it always was. reputational damage to grow we hold that one. we should sell just go get that embarrassment off the books.
Disappointing but still have the larger eu licence through Lithuania.
all mainstream large tec now well off November but we are close to our November lows.
both parts of tech value chain hit primarily by changed interest rates. Ángel and seed unaffected but late stage tech vc quite a bit.
however the 66% discount to an already discounted nav is an overshoot that will at some point correct itself. wish i knee precisely when
Https://files.pitchbook.com/website/files/pdf/Q1_2023_European_VC_Valuations_Report.pdf
In Q1 2023, the proportion of down rounds ticked upwards
to 18.8%, having finished 2022 at a decade low of 15.3%. Although the proportion is trending upwards, it is worth noting that investors and startups are not required to disclose valuations when announcing a round. Therefore, several recently completed rounds could be flat or down rounds.
VC down rounds as a share of all VC deals
2021 2022* 2023* Median Bottom decile Average
Source: PitchBook • Geography: Europe *As of March 31, 2023
Moreover, the lack of valuation disclosure could be artificially inflating valuations based on the higher valuations tied to large rounds that have closed in recent years. VC is an illiquid strategy, and valuations are linked to static VC rounds. Therefore, the further we progress through the downturn and more companies are forced to secure capital and potentially announce haircuts, the more accurate
The median venture-growth valuation fell to €25.3 million in Q1 2023, representing a 40.9% decline from Q1 2022. In contrast, the median venture-growth deal value rose to €9.9 million, a 19.9% increase from Q1 2022. Record- breaking valuations figures are unlikely in 2023. However, robust deals are still happening, as evidenced by the strong median venture-growth deal value showing. Venture-growth companies will typically have larger capital requirements given their age and size, which will drive up deal sizes. However, with growth rates and capital availability declining, valuations and deal sizes may come down further in 2023.
Through Q1 2023, the median early-stage deal value is painting a more positive picture, pacing in line with 2022’s €1.8 million. Early-stage capital deployment has benefited from larger VC funds, nontraditional investors, and international backers in recent years. However, deal sizes could constrict as portfolios are managed during the current downturn. Instead of chasing new deals, investors with existing exposure to several VC-backed companies may have to focus inwards on their existing portfolio companies to ensure that they have sufficient runway.
In Q1 2023, the median late-stage valuation increased 26.9% QoQ to €13.4 million. One major deal that helped boost
the figure involved Germany-based Enpal obtaining €215.0 million at a €2.2 billion pre-money valuation. Enpal offers a subscription-based model that supplies and installs solar panels. Near-term uncertainty is slowing investment levels, but long-term investment opportunities are helping sustain activity. Nonetheless, outlier companies can skew figures, and we expect late-stage valuations to flatten in the near future
“During Q1 2023, median early-stage valuations dipped to €5.5 million, a 15.4% QoQ drop and the third consecutive quarterly decline. Lower valuations have fed into the ecosystem in Q1 to ensure that they are closer to market expectations, comparable revenue multiples, and achievable growth rates. VC-backed companies have been able to command a premium in recent years and have enjoyed a lengthy period of abundant capital. But 2022 started a shift in capital availability and growth prospects, which has penetrated early-stage businesses into 2023. The median early-stage valuation step-up is pacing at 1.4x in Q1 2023, significantly down from its 2.0x reading in 2022; this further indicates the tricky valuation market”
The median seed valuation was flat at €5.5 million in Q1 2023, while the median deal value ticked upward marginally to €1.7 million, up from the €1.5 million full-year figure logged in 2022. Startups that receive seed funding are years away from an exit, and capital is typically used to establish product-market fit and a go-to-market strategy. Thus, startups tend to be lean and less affected by near- term uncertainty from poor growth rates.
“ In Q1 2023, angel valuations were robust, with the median pacing at €3.7 million—above the €3.0 million figure registered in 2022. With fewer deals taking place in the quarter, the uptick in the median valuation could be a result of larger, publicised rounds skewing the figure upwards. Angel-backed companies could still be in “stealth mode”
or have minimal financial information, and therefore, we expect figures to be detached from broader trends witnessed at mature stages of the VC ecosystem.
Angel investors with sufficient capital may find that investing in a brand-new idea linked to downward pressure on VC valuations could work in their favour as they could get more bang for their buck. Moreover, several previously VC-backed companies have launched in market downturns, such as Uber and Airbnb, which could give confidence to founders seeking capital for their ideas”
Of course sage but matters not if regulatory fine or private lawsuit it is a no no to knowingly overstate justification for an SP. Has toe be reasonable and evidence based opinion.
RNS is interesting. American fund selling down 0.6% of shares would act as a deflater of our SP in light traiding. Registered in Baltimore so no knowing the actual ownership as Baltimore is a global black hole of shell companies -much worse than UK offshore. Could be as unrelated to actual GROW news and prospects as Russian money needing to move fast regardless of strategy.