TIDMWWW
RNS Number : 4223J
SuperSeed Capital Limited
16 August 2023
SUPERSEED CAPITAL LIMITED
(the "Company")
INTERIM RESULTS FOR Q2 AND THE HALF YEARING 30 JUNE 2023
Continued delivery with a 436% increase in total income and 648%
rise in operating profit(1) over H1'22,
with a confident outlook for FY23
(1) Operating profit is the o perating profit excluding
establishment costs for the period.
SuperSeed Capital, a company established as a venture capital
fund of funds for early-stage AI/SaaS companies, announces results
for the Q2 and the six months ending 30 June 2023. The Company
invests in technology-led innovation, primarily through funds
managed by SuperSeed Ventures LLP (the "Investment Manager"). The
Company's principal investment to date is in SuperSeed II LP (the
"Fund").
Financial Highlights for Q2 2023:
-- NAV per share has grown by 21.7% in H1 2023 and, within this,
Q2 was up by 12.6% on Q1 to GBP1.18.
-- IRR on portfolio investments since IPO has increased to 35%.
-- Available cash and prepaid investment commitments of GBP270,546 at 30 June 2023 .
Portfolio and Investment Highlights:
-- Transaction to sell Techsembly to Sabre was completed on June
30(th) contributing to H1 NAV growth, with cash of GBP96,542
received shortly after H1 end. IRR on investment was in excess of
40%.
-- Offer for the purchase of another portfolio company received
in quarter, with expectations that the transaction will close in
Q3. Expected profit from this transaction has been included in the
Q2 results.
-- Portfolio SAAS revenue growth continued in Q2 2023, with
quarter-on-quarter Annual Recurring Revenue ("ARR") growth across
the portfolio of the Fund up by 21% over the previous quarter (Q1
2023) and overall SaaS ARR growth in H1 2023 up 37% on the previous
financial year-end. This level of growth is expected to continue
for the remainder of the year.
-- Two new AI/SaaS companies added to the portfolio - Ankra and Octaipipe.
Outlook for Q3 2023:
-- Portfolio sales forecast for the Fund in Q3 2023 remains
strong, and the expectation is sales growth will land in the 15-25%
range (quarter-on-quarter growth).
-- On the back of the performance of the underlying Fund
portfolio and given the uncertain market environment, the Company
expects third-quarter profit to be in the GBP200,000 to GBP300,000
range (8-13p/share).
-- Continued strong investment activity, with the Fund expecting
to make a further two investments in the AI/SaaS space in Q3
2023.
Mads Jensen, Managing Partner of the Investment Manager
commented:
"The Fund's underlying portfolio has continued to perform
strongly and is well-positioned for further growth in the remainder
of 2023. Due to the high quality of our portfolio we continue to
have strong M&A interest, recently evidenced by the exit of
Techsembly less than a year from our investment."
For more information, please contact:
SuperSeed Capital Limited +44(0) 203 405 3060
Mads Jensen, Investment Manager
VSA Capital - AQSE Corporate Adviser and
Broker +44(0) 203 005 5000
Corporate Finance: Andrew Raca
------------------------------------------ ----------------------
About SuperSeed Capital Limited
SuperSeed exists to back Europe's best B2B SaaS founders at the
earliest stages, and to help them build great companies. In the
short term, our portfolio companies enable their customers to drive
revenue growth and efficiency savings using next-generation
software and AI. In the long-term, they have an opportunity to
create category defining global technology companies. SuperSeed
focuses on the fundamentals by helping founders build good
companies with strong unit economics and sensible distribution
models.
Investment Manager's Review:
In 2022 we saw a big shift in how public markets value tech
companies. Last year, markets shifted from valuing companies
primarily on growth to valuing them mainly on sales efficiency.
We saw that development as a positive evolution. It meant that
we shifted from a "grow at all costs" paradigm to "grow when it
makes financial sense". So what's happened over the past quarter?
Most public tech company valuations are still connected to business
fundamentals. But we've seen valuations for the best-performing
companies shift back to more of a pure-play growth focus. And with
that, the Nasdaq-100 has rallied +40% YTD (largely driven by the
"Magnificent 7" - Microsoft, Apple, Nvidia, Google/Alphabet,
Amazon, Tesla and Facebook/Meta). The BVP Nasdaq Emerging Cloud
Index (listed as EMCLOUD) designed to track the performance of
emerging public SaaS companies primarily involved in providing
cloud software to their customers, saw, valuations also up, with
multiples growing to over 7x revenue.
The context
When asking why, the answer still seems to be "the Fed, stupid".
Markets generally expected a hard-ish landing for the US economy in
2023. We started the year with US inflation of 6.4%. That's high,
and the Fed has been raising rates aggressively to fight inflation.
Most investors thought that the rate increases would lead to a
recession. But so far, things have been looking benign. US growth
is above 2%. And at the same time, inflation is down to 3%. It
looks like a soft landing is within reach.
The major warning sign? The yield curve is still decidedly
inverted. 3-month treasury bills yield 5.5%, and 10-year bills
yield 4%. However, headline growth and inflation numbers look like
they are heading in the right direction. But on the other, bond
investors still seem to be betting on recession. It's a noteworthy
conundrum.
Back to tech stocks
So why have high-growth tech stocks rallied? If inflation is
under control, markets expect lower rates in the future. And with
lower rates, future growth becomes more valuable. Once again, it's
the Fed (and benign inflation numbers).
SuperSeed progress in Q2
New Investments
We added two exciting new companies to the portfolio in Q2.
Ankra - SaaS / Cloud Infrastructure Management
Since Amazon launched AWS in 2006, cloud computing has grown
rapidly to a $100bn industry. Cloud servers are faster to provision
and easier to maintain than traditional in-house data centres. This
allows companies to reduce both capex and time to market.
Cloud infrastructure might be easier to provision and maintain
than buying your own servers. But it's not an "automatic
experience". This is especially felt by fintech companies with
large and complex cloud infrastructures. Today, these companies
spend billions on cloud infrastructure management or "devops".
Ankra's platform enables large enterprises to leverage AI to
automate cloud configuration, deployment and management. The
platform also increases cloud security and time to market. As such,
Ankra offers customers strong ROI and rapid payback. Founders
Mattias Åsell, Benjamin Klingsbo and Mark Shine are building an
exciting business, and we look forward to partnering with them in
the years ahead.
OctaiPipe - SaaS / Distributed AI for Autonomous Devices
Autonomous machines are devices that can carry out tasks without
human direction. Think self-driving cars, drones and farming
equipment. "Robots" in popular parlance. Today, this space is still
in its infancy, but it is rapidly gaining pace.
OctaiPipe's platform enables device manufacturers to manage the
AI models that sit on autonomous devices. Essentially, it pushes
the machine learning intelligence to the devices, rather than
expecting all the data to be sent back to the cloud for processing.
It does this by combining distributed Machine Learning Operations
and federated learning. Benefits include reduced costs, improved
response times and better management of data privacy.
Founders Eric Topham and Ivan Scattergood have deep experience
in the field of distributed AI. With OctaiPipe, they have built a
platform that delivers on the promise of device autonomy. It helps
device manufacturers leverage the same approaches used by leading
firms like Tesla, but with vastly reduced cost to building these
capabilities in-house.
Exit
On 30th June, we closed the sale of Techsembly to global travel
tech company Sabre.
When we first met Amy Read , the CEO and Co-Founder of
Techsembly, we were impressed by her tenacity and vision for how to
transform the world of luxury hospitality. Amy and the team were
still working out their model, but we knew we had to back them to
help build their company. Since then, the Techsembly team has done
well, securing an almost 50% market share in their initial target
market.
On the back of that strong commercial success, the Techsembly
team has landed a successful exit and will partner with Sabre for
the next phase of the journey. The sale came much faster than
expected, only 9 months after our investment, but still delivered a
>30% return to the fund (>40% on an IRR basis).
Sabre was founded by American Airlines to handle airline
reservations in 1960. Today the company delivers more than $2bn in
annual revenue.
We congratulate Amy and her team on the exit, and wish them all
possible success in the years ahead.
Portfolio revenue
The portfolio continued solid revenue growth in Q2. Sales were
strong, with contracted ARR up 21% for the quarter from Q1 2023.
Based on the forecasts from portfolio companies, we expect this
level of growth to continue in the coming quarters.
Outlook for the rest of 2023
The macro picture is that US inflation and recession fears are
receding. In tech, AI continues to dominate the agenda. Both our
investments in Q2 had strong AI angles, and we see this being the
core theme for the remaining quarters of 2023.
Although we've seen the initial wave of excitement about
foundational generative AI Models (like GPT from OpenAI and LaMDA
from Google), we are still in the early days of the AI journey. And
just like cloud computing was a foundation for the explosion of the
SaaS industry, the generative AI models will enable the next wave
of SaaS innovation. We expect to see many founders build exciting
companies using this technology in the years ahead. It continues to
be our mission to find and back the very best teams among them, and
this continues to be our main focus for the second half of
2023.
Forward looking statements
This announcement contains statements that are or may be
forward-looking statements. All statements other than statements of
historical facts included in this announcement may be
forward-looking statements, including statements that relate to the
Company's future prospects, developments and strategies. The
Company does not accept any responsibility for the accuracy or
completeness of any information reported by the press or other
media, nor the fairness or appropriateness of any forecasts, views
or opinions express by the press or other media regarding the
Group. The Company makes no representation as to the
appropriateness, accuracy, completeness or reliability of any such
information or publication.
Forward-looking statements are identified by their use of terms
and phrases such as "believe", "targets", "expects", "aim",
"anticipate", "projects", "would", "could", "envisage", "estimate",
"intend", "may", "plan", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. The forward-looking statements in this announcement
are based on current expectations and are subject to known and
unknown risks and uncertainties that could cause actual results,
performance and achievements to differ materially from any results,
performance or achievements expressed or implied by such
forward-looking statements. Factors that may cause actual results
to differ materially from those expressed or implied by such
forward looking statements include, but are not limited to, those
described in the Risk Management Framework section of the Company's
most recent Annual Report. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of the Group and the environment in which it is
and will operate in the future. All subsequent oral or written
forward-looking statements attributed to the Company or any persons
acting on its behalf are expressly qualified in their entirety by
the cautionary statement above. Each forward-looking statement
speaks only as at the date of this announcement. Except as required
by law, regulatory requirement, the Listing Rules and the
Disclosure Guidance and Transparency Rules, neither the Company nor
any other party intends to update or revise these forward-looking
statements, whether as a result of new information, future events
or otherwise.
SuperSeed Capital Limited
Condensed Statement of Comprehensive Income
for the period 1 January 2023 to 30 June 2023
1 April 1 January 1 January 1 January
2023 2023 2023 2022
to to To to
30 June 31 March 30 June 30 June
2023 2023 2023 2022
GBP GBP GBP GBP
Income
Investment income - 328 328 7
Realised gain on investments held at fair value
through profit or loss - 33,052 33,052 -
Unrealised gain on investments held at fair
value through profit or loss 353,051 180,555 533,606 129,162
Other income 1 1 2 951
Total income 353,052 213,936 566,988 130,120
--------- ---------- ---------- -----------
Expenses
Establishment costs - - - 153,028
Administration fees 7,613 7,611 15,224 12,432
Audit fees 5,734 5,671 11,405 10,414
Directors' fees 4,500 4,500 9,000 9,000
Legal & professional fees 16,142 12,183 28,325 14,036
Loan interest - 134 134 -
Regulatory fees 3,836 5,351 9,187 7,315
Sundry expenses 295 703 998 830
Total expenses 38,120 36,153 74,273 207,055
--------- ---------- ---------- -----------
Total gain/(loss) and comprehensive income
for the period 314,932 177,783 492,715 (76,935)
========= ========== ========== ===========
Basic earnings per share 0.132897 0.086776 0.021873 (0.045245)
Diluted earnings per share 0.120480 0.069795 0.202219 (0.045245)
Operating profit/(loss) excluding establishment
costs for the period 314,932 177,783 492,715 76,093
========= ========== ========== ===========
Basic operating profit excl. establishment
costs per share 0.132897 0.086776 0.210873 0.044750
Diluted operating profit excl. establishment
costs per share 0.120480 0.069795 0.202219 0.044750
SuperSeed Capital Limited
Condensed Statement of Financial Position
As at 30 June 2023
31 March 31 December
30 June 2023 2023 2022
GBP GBP GBP
Non-current assets
Investments 2,542,338 2,189,288 1,799,616
----------
Total non-current assets 2,542,338 2,189,288 1,799,616
------------- ---------- ------------
Current assets
Trade and other receivables 255,550 254,895 11,025
Cash and cash equivalents 20,546 64,006 235,089
----------
Total current assets 276,096 318,901 246,114
------------- ---------- ------------
Total assets 2,818,434 2,508,189 2,045,730
============= ========== ============
Current liabilities
Trade and other payables 11,991 16,678 21,745
------------- ========== ------------
Total current liabilities 11,991 16,678 21,745
------------- ========== ------------
Total liabilities 11,991 16,678 21,745
============= ========== ============
Net assets 2,806,443 2,491,511 2,023,985
============= ========== ============
Equity
Share capital 2,369,743 2,369,743 2,080,000
Retained earnings 436,700 121,768 (56,015)
----------
Total equity 2,806,443 2,491,511 2,023,985
------------- ---------- ------------
Net asset value per ordinary
share 1.184282 1.051384 0.973070
SuperSeed Capital Limited
Condensed Statement of Changes in Equity
for the period 1 January 2023 to 30 June 2023
Share Capital Retained Total
Earnings
GBP GBP GBP
Ordinary Shares issued on incorporation 1 - 1
Issue of Ordinary Shares 1,999,999 - 1,999,999
Total comprehensive loss for the
period - (119,977) (119,977)
Balance as at 30 June 2022 2,000,000 (119,977) 1,880,023
-------------- ---------- ----------
Share Capital Retained Total
Earnings
GBP GBP GBP
Balance as at 1 January 2023 2,080,000 (56,015) 2,023,985
Issue of Ordinary Shares 289,743 - 289,743
Total comprehensive profit for
the period - 492,715 492,715
Balance as at 30 June 2023 2,369,743 436,700 2,806,443
-------------- ---------- ----------
SuperSeed Capital Limited
Condensed Statement of Cash Flows
for the period 1 January 2023 to 30 June 2023
1 January 6 October
2023 2021
to to
30 June 30 June 2022
2023
GBP GBP
Cash flows used in operating activities
Net cash flow used in operating activities (86,750) (246,423)
Cash flows used in investing activities
Net cash flow used in investing activities (127,659) (777,870)
Cash flows from financing activities
Net cash flow from financing activities (134) 2,000,000
Net movement in cash and cash equivalents
during the period (214,543) 975,707
Cash and cash equivalents at the beginning
of the period 235,089 -
Cash and cash equivalents at the end of
the period 20,546 975,707
========== =============
SuperSeed Capital Limited
Investment Analysis
for the period 1 January 2023 to 30 June 2023
31 December
30 June 2023 2022
GBP GBP
Cost 1,748,152 1,539,035
Cumulative movement in value 794,187 260,581
Fair value 2,542,338 1,799,616
=============== ===============
Investment fair value can be further analysed
as follows:
1 January 2023 6 October 2021
to to
31 December
30 June 2023 2022
GBP GBP
Cost
Cost at beginning of the period 1,539,035 -
Cost of investment - settled 515,017 1,539,035
Cost of investment - sold (305,901) -
Total cost of investment 1,748,152 1,539,035
=============== ===============
Fair value movement
Fair value adjustment at beginning of the period 260,581 -
Revaluation of underlying investments 533,606 260,581
SuperSeed II LP management fee and other net
movements in NAV - -
794,187 260,581
=============== ===============
Fair value of investments 2,542,338 1,799,616
=============== ===============
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END
NEXGPUWGRUPWGMA
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