Runway Growth Finance Corp. Provides Third Quarter 2022 Portfolio Update
October 06 2022 - 8:30AM
Runway Growth Finance Corp. (“Runway Growth”) (Nasdaq: RWAY), a
leading provider of flexible capital solutions to late- and
growth-stage companies seeking an alternative to raising equity,
today provided an operational and portfolio update for the third
quarter ended September 30, 2022.
“Fueled by prudent deployment of leverage and
further expansion of our investment team, Runway Growth delivered
record third quarter originations, completing nine investments in
new and existing portfolio companies,” said David Spreng, Founder
and CEO of Runway Growth. “Our team has built the strongest
pipeline we have seen to date. Runway Growth has established itself
as a preferred lender for high-quality, innovative companies
seeking minimally dilutive growth capital. Our execution during the
third quarter demonstrates that companies are embracing venture
debt as a strategic vehicle for growth amidst a challenging
valuation backdrop. Runway Growth is well positioned to execute
against our long-term initiatives while creating meaningful
shareholder value.”
Originations
In the third quarter of 2022, Runway Growth
funded nine investments: two investments in new portfolio
companies, and seven new investments in existing portfolio
companies. These include:
- Completion of a
new $75 million senior secured term loan commitment to Kin
Insurance (“Kin”), funding $50 million at close. Kin is a
direct-to-consumer homeowner’s insurance business. The company’s
end-to-end platform handles all aspects of the business in-house,
from lead generation to bind-and-quote/underwriting to claims;
-
Completion of a new $35 million senior secured term loan
commitment to TRACON Pharmaceuticals, Inc. (“Tracon”) (NASDAQ:
TCON), funding $10 million at close. Tracon is a clinical stage
biotech company that acquires, develops and seeks to commercialize
therapeutic drugs for various severe oncology indications with
unmet need;
- Providing a new
$75 million senior secured term loan to existing portfolio company,
CloudPay, Inc. (“CloudPay”), funding $60 million at close, which
refinanced and upsized CloudPay’s previous $45 million senior
secured term loan. CloudPay develops and offers a cloud-based
payroll platform, managed services, and treasury services to
provide end-to-end payroll solutions to multinational
organizations. The company’s platform offers accurate, standardized
payroll processing in over 130 countries, through a single SaaS
platform, which enables organizations to increase efficiency,
streamline compliance, and achieve greater visibility into
payroll;
- Completion of a
$6 million upsize and follow-on investment in existing portfolio
company Fidelis Cybersecurity, Inc. (“Fidelis”). Fidelis is a
cybersecurity company focused on threat detection, hunting, and
targeted response of advanced threats and data breaches. Fidelis
serves a list of blue-chip private sector and government
customers;
- Completion of a
$15 million upsize and funding of $10 million follow-on investments
in two additional advances to existing portfolio company Allurion
Technologies, Inc. (“Allurion”). Allurion was founded in 2009 with
one mission: end obesity. The Allurion program combines medical,
digital, and nutritional approaches and engages an entire team to
jumpstart weight loss and form lifelong healthy habits;
- Completion of
$10 million upsize and funding of $5 million follow-on investments
in two additional advances to existing portfolio company Epic IO
Technologies, Inc. (“Epic IO”). Epic IO is the global technology
holding company for IntelliSite and Broad Sky Networks. Epic IO is
focused on wireless connectivity and solutions powered by AI and
Internet of Things (IoT) that seek to make customers safer,
smarter, and more connected; and
- Funding of a $20
million follow-on investment to existing portfolio company
Gynesonics, Inc. (“Gynesonics”). Gynesonics is a women’s healthcare
company focused on the development of minimally invasive solutions
for symptomatic uterine fibroids. Gynesonics’ treatment system is a
breakthrough alternative to hysterectomy and myomectomy procedures,
and can treat a wide range of fibroid types, sizes, and locations.
The fibroids are treated from inside the uterus, so the Sonata®
Treatment requires no incisions, no tissue is surgically removed,
and the uterus is preserved.
Liquidity Events
During the third quarter ended September 30,
2022, Runway Growth experienced one liquidity event totaling $10.8
million:
- FiscalNote, Inc.
(NYSE: NOTE) made a partial prepayment of $10.8 million to its
outstanding principal balance including interest and associated
fees.
Portfolio Construction and
Management
Runway Growth delivered its third consecutive
quarter of strong originations against continued market volatility,
driven by our selective focus on innovative late-stage companies.
Since inception, Runway has endeavored to strategically construct a
weather-proof portfolio that can perform in all economic cycles.
Runway Growth utilizes its own proprietary risk analytics and
process to evaluate all investment opportunities. We believe this
rigor will be beneficial in future periods as we accelerate
portfolio growth and support passionate entrepreneurs by providing
access to minimally dilutive growth capital.
As of September 30, 2022, our portfolio included
48 debt investments and 50 equity investments (which includes
warrants received in conjunction with debt investments) in 43
portfolio companies, consisting of late and growth-stage businesses
in technology, life sciences, healthcare, information services, and
select consumer services and products industries. Our normal
business operations include ongoing communication with our
portfolio companies, and the Runway Growth team has proactively
increased the frequency of communications given the current dynamic
market landscape.
In summary, Runway Growth is constructing a
portfolio that provides stable yields and attractive returns from
debt investments. That is our commitment to all our stakeholders.
Our borrowers are performing well and carefully navigating an
increasingly uncertain economic environment.
About Runway Growth Finance
Corp.
Runway Growth is a growing specialty finance
company focused on providing flexible capital solutions to late-
and growth-stage companies seeking an alternative to raising
equity. Runway Growth is a closed-end investment fund that has
elected to be regulated as a business development company under the
Investment Company Act of 1940. Runway Growth is externally managed
by Runway Growth Capital LLC, an established registered investment
advisor that was formed in 2015 and led by industry veteran David
Spreng. For more information, please visit
www.runwaygrowth.com.
Forward-Looking Statements
Statements included herein may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements other than
statements of historical facts included in this press release may
constitute forward-looking statements and are not guarantees of
future performance, condition or results and involve a number of
risks and uncertainties, including the impact of COVID-19 and
related changes in base interest rates and significant market
volatility on our business, our portfolio companies, our industry
and the global economy. Actual results may differ materially from
those in the forward-looking statements as a result of a number of
factors, including those described from time to time in Runway
Growth’s filings with the Securities and Exchange Commission.
Runway Growth undertakes no duty to update any forward-looking
statement made herein. All forward-looking statements speak only as
of the date of this press release.
IR Contacts:
Stefan Norbom, Prosek Partners, snorbom@prosek.com
Thomas B. Raterman, Chief Financial Officer and Chief Operating
Officer, tr@runwaygrowth.com
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