Half-year Report

RNS Number : 9615I
TMT Investments PLC
18 August 2021
 

18 August 2021

 

TMT INVESTMENTS PLC

("TMT" or the "Company")

 

Half-year report for the six months to 30 June 2021

 

TMT Investments Plc, the venture capital company investing in high-growth, technology companies across a number of core specialist sectors, is pleased to announce its unaudited interim results for the half-year ended 30 June 2021.

 

The interim report will shortly be available on the Company's website, www.tmtinvestments.com .

 

Highlights :

 

· COVID-19's overall effect on portfolio companies is mostly positive

· NAV per share of US$7.49 (up 22.8% from US$6.10 as of 31 December 2020)

- US$1.6 million from two full profitable exits

- US$3.3 million in proactive (non-transaction based) negative revaluations

· A number of portfolio companies raised fresh equity capital at higher valuations during the period, further validating their business models

· US$14.1 million of investments across 13 new and existing portfolio companies in 6 months to 30 June 2021

· 5-year NAV-based IRR of 34.2% per annum

· Only two portfolio companies (31.4% of the investment portfolio) are valued on multiples

· US$14.3 million in cash reserves as of 17 August 2021

 

Post period end

 

Completed a further 7 investments totalling US$8.3 million in new (Collectly, VertoFX, MetroSpeedy and Academy of Change) and existing (Postoplan, Novakid and Backblaze) companies

 

Collectly, Inc., a tech-enabled patient billing platform ( www.collectly.co )

VertoFX Ltd, a UK-based cross-border payments and foreign exchange solution facilitating commerce for modern businesses, rapidly expanding in Africa ( www.vertofx.com )

Metro Speedy Technologies Inc., a technology based local delivery company providing on-demand, same day or scheduled delivery services ( www.metrospeedy.com )

Academy of Change, a personalised educational service for women on lifestyle topics ( www.akademiaperemen.ru )

 

 

Alexander Selegenev, Executive Director of TMT, commented:

" We are delighted with our portfolio companies' performance since the beginning of the year, which has sustained the trend of positive revaluations and cash realisations. Most of TMT's investee companies are continuing to benefit from the accelerated shift to online consumer habits and remote working, led by outstanding management teams and supportive shareholders.

 

"The US$41m windfall generated by the disposal of our investment in Pipedrive at the end of 2020 placed TMT in an excellent position to actively reinvest the proceeds during the course of 2021 to date into successful existing portfolio as well as new companies. We added to investments in existing portfolio companies that are performing well and invested in new companies that meet our investment criteria in sectors we know well and where we believe we have a competitive advantage. TMT's investment criteria are stringent but fundamental to success given the multitude of opportunities available. Coupled with TMT's global investment horizons they have led TMT to invest early in 3 portfolio companies that have reached unicorn status since TMT's admission to AIM in December 2010 (Wrike, Pipedrive and Bolt). We are strongly encouraged by the propitious environment for technology companies and continue to scour the globe for the most attractive investment opportunities, adding value to shareholders through the construction and management of a diversified portfolio of high-growth technology companies.

 

"We expect a number of positive revaluations across our portfolio in the coming months and will update shareholders on relevant developments as appropriate".

 

 

For further information contact:

 

TMT Investments Plc

Alexander Selegenev

Executive Director

www.tmtinvestments.com

 

+44 (0)1534 281 800

(Computershare - Company Secretary)

 

alexander.selegenev@tmtinvestments.com

 

Strand Hanson Limited

(Nominated Adviser)

James Bellman / James Dance

 

+44 (0)20 7409 3494

Cenkos Securities plc

(Joint Broker)

Ben Jeynes

 

+44 (0)20 7397 8900

Hybridan LLP

(Joint Broker)

Claire Louise Noyce

 

+44 (0)20 3764 2341

Kinlan Communications

David Hothersall

 

+44 (0)20 7638 3435

davidh@kinlan.net

 

This announcement is released by TMT Investments plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

About TMT Investments Plc

 

TMT Investments Plc invests in high-growth technology companies across a number of core specialist sectors and has a significant number of Silicon Valley investments in its portfolio. Founded in 2010, TMT has a current investment portfolio of over 45 companies and net assets of US$218 million as of 30 June 2021.  The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation.  The Company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com .

 

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EXECUTIVE DIRECTOR'S STATEMENT

 

The first half of 2021 saw continued growth across the TMT Investments Plc ("TMT" or the "Company") portfolio, with structural business and economic drivers continuing to benefit the Company's global portfolio of high growth technology investee companies as a result of evolving customer trends and the accelerated shift to remote working. The period also saw sustained investor interest in the high-growth potential of business models based on digital, online and remote technologies, resulting in a significant increase in fundraising activities by technology companies around the world.  These two factors resulted in a continued trend of positive revaluations and cash realisations across TMT's portfolio.

 

Following the disposal of our investment in Pipedrive, Inc ("Pipedrive") at the end of 2020 for US$41 million, we have been busy directing those proceeds towards investing in successful existing as well as new portfolio companies that meet our investment criteria of having outstanding management teams, a product or service that can be scaled up globally, fast revenue growth, Series A / Pre-Series A stage and viable exit opportunities.

 

NAV per share

 

The Company's NAV per share in the first half of 2021 increased by 22.8% to US$7.49 (from US$6.10 as of 31 December 2020), mainly as a result of the significant upward revaluation of our investments in Bolt and PandaDoc. If, pursuant to the Company's bonus plan, the bonus attributable to the NAV increase from 1 January 2021 to 30 June 2021 had been accrued during the period, it would have resulted in an additional bonus charge of US$4,108,784, equivalent to approximately US$0.14 per share and reducing the NAV to US$7.35 per share as of 30 June 2021.

 

Operating expenses

 

In the first half of 2021, the Company's administrative expenses of US$802,919 were above the corresponding 2020 levels (US$560,093), reflecting the Company's significantly increased level of investment and business development activities.

 

Previous years' bonus pool adjustment

 

Due to a technical error in the calculation of the bonus pools in the bonus periods from July 2016 to December 2020 (the "Affected Bonus Periods"), the bonus pools in each of the Affected Bonus Periods were calculated on the basis of the opening position being the previous period's "adjusted NAV before bonus". Pursuant to the terms of the Company's bonus plan, each of the Affected Bonus Periods should have seen the calculation assess the annual growth in NAV from an opening position of "adjusted NAV after bonus". As a result, the amount of bonuses actually accrued in the Affected Bonus Periods were understated by an aggregate of US$372,556 (the "Underpaid Bonus"). As the total amount of the Underpaid Bonus is considered immaterial, the error has been corrected, and the Underpaid Bonus has been included in the current financial statements as an additional charge for the current period. The exact allocation of the Underpaid Bonus is expected to be approved and paid to the participants of the Company`s bonus plan shortly after the publication of this interim report.

 

Financial position

 

As of 30 June 2021, the Company had no financial debt and cash reserves of approximately US$22.9 million.  As of 17 August 2021, the Company had cash reserves of approximately US$14.3 million, as a result of the deployment of a significant amount of capital into new investments in the period after 30 June 2021.

 

Outlook

 

TMT has a diversified investment portfolio of over 45 companies, focused primarily on big data/cloud, e-commerce, SaaS (software-as-a-service), marketplaces and EdTech, most of which continue to benefit from the accelerated shift to online consumer habits and remote working.  Indeed, some of the portfolio companies recently added to TMT's portfolio have already raised further funds at significantly higher valuation levels. The general trends in the digital technology sector continue to generate new exciting investment and exit opportunities and the tech venture capital investment space continues to be one of the few beneficiaries of the new market environment caused by COVID-19.

 

The first half of 2021 further demonstrated increased investor interest in the high-growth potential of business models based on digital, online and remote technologies, leading to a significant increase in fundraising activities by technology companies around the world.  We expect a number of positive revaluations across our portfolio in the coming months and will update shareholders on relevant developments as appropriate.

 

 

 

Alexander Selegenev

Executive Director

17 August 2021

 

 

 

 

 

 

 

PORTFOLIO DEVELOPMENTS

 

We are delighted with our portfolio companies' performance since the beginning of the year, which has sustained the trend of positive revaluations and cash realisations.  A number of portfolio companies received further validation for their business models by raising fresh equity capital at higher valuations during the period.  In tandem, most of our other portfolio companies have continued to grow their businesses quietly in the background.  In addition, the Company continues its policy of seeking to reduce the value of underperforming investees as soon as there is enough evidence to support such decisions.

 

Portfolio performance:

 

The following developments have had an impact on and are reflected in the Company's NAV and/or financial statements as of 30 June 2021 in accordance with applicable accounting standards:

 

Full and partial cash exits, and positive revaluations:

 

· 3S Money Club, a UK-based bank challenger providing corporate clients with multi-currency bank accounts ( www.3s.money ), completed a new equity funding round.  The transaction represented a revaluation uplift of US$1.9 million (or 305%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020 (adjusted for the value of TMT's additional investments made in 3S Money in the first half of 2021).

 

· Klear, an influencer marketing platform ( www.klear.com ), was acquired by Meltwater B.V., a leading global SaaS provider of media intelligence and social analytics, for a total consideration of US$17.8 million, funded by a combination of cash and earn-out.  TMT's total expected cash proceeds from this disposal is US$0.5 million.  The transaction represented a revaluation uplift of US$0.3 million (or 211%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

· PandaDoc, a proposal automation and contract management software provider ( www.pandadoc.com ), completed a new equity funding round.  The transaction represented a revaluation uplift of US$10.4 million (or 286%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

· KitApps, trading as Attendify, a SaaS-based virtual and hybrid event management platform ( www.attendify.com ), was acquired by event management platform Hopin.  TMT's total expected cash proceeds from this disposal is US$1.2 million, with US$1.06 million already received.  The transaction represented a revaluation uplift of US$0.5 million (or 91%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

· Novakid, an online English language school for children ( www.novakidschool.com ), completed a new equity funding round.  The transaction represented a revaluation uplift of US$1.8 million (or 362%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

· eAgronom, a farm management software provider for grain producers ( www.eagronom.com ), completed a new equity funding round.  The transaction represented a revaluation uplift of US$0.2 million (or 55%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

· Bolt, a ride-hailing and food delivery platform ( www.bolt.eu ), completed a new equity funding round.  The transaction represented a revaluation uplift of US$30 million (or 83%) in the fair value of TMT's investment, compared to the previous reported amount as of 31 December 2020.

 

Negative revaluations:

 

The following of the Company's portfolio investments were negatively revalued in the first half of 2021:

 

Portfolio Company

Write-down amount (US$)

Reduction as % of fair value reported as of 31 Dec 2020

Reasons for write-down

Wanelo

1,223,149

67%

Lack of progress in the last 2 years

Anews

670,000

67%

Lack of progress in the last 2 years

Scalarr

1,378,281

50%

Market changes outside of Scalarr's control

 

Key developments for the five largest portfolio holdings in the first half of 2021 (source: TMT's portfolio companies):

 

Backblaze (cloud storage provider):

· Double-digit annualised revenue growth continued

· Cloud-to-cloud migration programme and Object Lock for ransomware protection launched

 

Bolt (ride-hailing and food delivery service):

· Active in over 300 cities globally (up from over 200 cities as of 31 December 2020)

· Proprietary food delivery brand gains pace both in terms of the client base and countries of operation

 

PandaDoc (proposal automation and contract management software):

· Double-digit annualised revenue growth continued

· Over 27,000 paying clients (from over 23,000 as of 31 December 2020)

 

Depositphotos (stock photo and video marketplace):

· Stable revenue growth continued

· New graphic design software product Crello continued growing at faster rate

 

Scentbird (Perfume, wellness and beauty product subscription service):

· Double-digit annualised revenue growth continued

· The company continues to launch new products

 

New investments:

 

TMT continued its intensive investing mode and made the following investments in the first half of the year:

 

· Additional £1,971,825 (via acquisition of new and existing shares) in 3S Money Club Limited, a UK-based online banking service focusing on international trade ( www.3s.money );

· Additional US$228,933 (via acquisition of existing shares) in Workiz, a SaaS solution for the field service industry ( www.workiz.com );

· Additional US$2,000,000 in Affise, a performance marketing SaaS solution ( https://affise.com/en/ );

· Additional £399,997 in Qumata (previously HealthyHealth), an InsurTech and HealthTech company ( www.healthyhealth.com );

· US$1,000,000 in 3DLook Inc., a body scanning and measuring technology solution for the online retail industry ( www.3dlook.me );

· Additional €575,000 in Postoplan OÜ, a social network marketing platform, which helps create, schedule, and promote content ( www.postoplan.app );

· £200,000 in Balanced Ventures Limited, trading as FemTech Lab, Europe's first tech accelerator focused on female founders ( www.femtechlab.com );

· US$300,000 in Agendapro, Inc., a SaaS-based scheduling, payment and marketing solution for the beauty and wellness industry in Latin America ( www.agendapro.com );

· US$2,000,000 in Muncher Inc., a dark kitchen and virtual food brand operator in Latin America ( www.muncher.com.co );

· US$1,000,000 in Aurabeat Technology International Limited, the producer of air purifiers that are FDA-certified to destroy viruses and bacteria ( www.aurabeat-tech.com );

· US$500,000 in Cyberwrite Inc., a platform offering third-party cyber risk quantification and proactive mitigation ( www.cyberwrite.com );

· US$2,000,000 in CloudBusiness Inc., trading as Synder, an accounting solution for e-commerce businesses ( www.synderapp.com ); and

· €500,000 in Outvio, a fulfilment and delivery platform for the e-commerce industry ( www.outvio.com ).

 

Events after the reporting period:

 

In July 2021, the Company invested an additional €400,000 in Postoplan OÜ, a social network marketing platform, which helps create, schedule, and promote content ( www.postoplan.app ).

 

In July 2021, the Company invested an additional US$640,000 in Novakid, an online English language school for children ( www.novakidschool.com ).

 

In July 2021, the Company invested US$2,000,000 in Collectly, Inc., a tech-enabled patient billing platform ( www.collectly.co ).

 

In July 2021, the Company invested US$1,099,999 in VertoFX Ltd, a UK-based cross-border payments and foreign exchange solution facilitating commerce for modern businesses, rapidly expanding in Africa ( www.vertofx.com ).

 

In July 2021, the Company invested US$1,000,000 in Metro Speedy Technologies Inc., a technology based local delivery company providing on-demand, same day or scheduled delivery services ( www.metrospeedy.com ).

 

In August 2021, the Company invested US$1,000,000 in Academy of Change, a personalised educational service for women on lifestyle topics ( www.akademiaperemen.ru ).

 

In August 2021, the Company invested an additional US$2,000,000 in cloud storage provider Backblaze ( www.backblaze.com ).

 

These events after the reporting period are not reflected in the NAV and/or the financial statements as of 30 June 2021.

 

 

 

FINANCIAL STATEMENTS

 

Statement of Comprehensive Income (unaudited)

 

 

 

For the six months ended 30/06/2021

 

For the six months ended 30/06/2020

 

 

Notes

USD

 

USD

 

 

 

 

 

 

 

Gains/(Losses) on investments

2

41,971,813

 

(1,264,916)

 

Dividend income

 

-

 

70,868

 

Total investment income/(loss)

 

41,971,813

 

(1,194,048)

 

Expenses

 

 

 

 

 

Bonus scheme payment charge

6

(372,556)

 

-

 

Administrative expenses

5

(802,919)

 

(560,093)

 

Operating gain/(loss)

 

40,796,338

 

(1,754,141)

 

Net finance income

7

-

 

52,868

 

Currency exchange loss

 

(81,059)

 

(23,938)

 

Gain/(Loss) before taxation

 

40,715,279

 

(1,725,211)

 

Taxation

8

-

 

-

 

Gain/(Loss) attributable to equity shareholders

 

40,715,279

 

(1,725,211)

 

Total comprehensive income/(loss) for the year

 

40,715,279

 

(1,725,211)

 

Gain/(Loss) per share

 

 

 

 

 

Basic and diluted gain/(loss) per share (cents per share)

9

139.5

 

(5.91)

 

 

 

 

Statement of Financial Position

 

 

 

At 30 June

2021

USD

 

At 31 December

2020

USD

 

 

Unaudited

 

Audited

 

Notes

 

 

 

Non-current assets

 

 

 

 

Financial assets at FVPL

10

199,108,188

 

144,803,154

Total non-current assets

 

199,108,188

 

144,803,154

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

11

779,225

 

487,838

Cash and cash equivalents

12

22,870,620

 

39,004,288

Total current assets

 

23,649,845

 

39,492,126

Total assets

 

222,758,033

 

184,295,280

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

13

4,120,047

 

6,372,573

Total current liabilities

 

4,120,047

 

6,372,573

 

 

 

 

 

Total liabilities

 

4,120,047

 

6,372,573

 

 

 

 

 

 

 

 

 

 

Net assets

 

218,637,986

 

177,922,707

 

 

 

 

 

Equity

 

 

 

 

Share capital

14

34,790,174

 

34,790,174

Retained profit

 

183,847,812

 

143,132,533

Total equity

 

218,637,986

 

177,922,707

 

 

 

Statement of Cash Flows (unaudited)

 

 

 

For the six months ended 30/06/2021

For the six months ended 30/06/2020

 

 

Notes

USD

USD

 

 

 

 

 

 

Operating activities

 

 

 

 

Operating gain/(loss)

 

40,796,338

(1,754,141)

 

Adjustments for non-cash items:

 

 

 

 

Changes in fair value of financial assets at FVPL

3

(41,852,901)

1,181,529

 

Currency exchange loss

 

(81,059)

(23,938)

 

 

 

(1,137,622)

(596,550)

 

Changes in working capital:

 

 

 

 

Increase in trade and other receivables

11

(291,387)

(428,642)

 

Decrease in trade and other payables

13

(2,252,526)

(518,281)

 

Net cash used in operating activities

 

(3,681,535)

(1,543,473)

 

Investing activities

 

 

 

 

Interest received

7

-

52,868

 

Purchase of financial assets at FVPL

10

(14,081,056)

(1,020,870)

 

Proceeds from sale of financial assets at FVPL

10

1,628,923

-

 

Net cash used in investing activities

 

(12,452,133)

(968,002)

 

Financing activities

 

 

 

 

Net cash from financing activities

 

-

-

 

Decrease in cash and cash equivalents

 

(16,133,668)

(2,511,475)

 

Cash and cash equivalents at the beginning of the period

12

39,004,288

11,700,074

 

Cash and cash equivalents at the end of the period

12

22,870,620

9,188,599

 

 

 

 

 

 

 

Statement of Changes in Equity (unaudited)

 

 

 

Share capital

Retained profit

Total

 

 

USD

USD

USD

Balance at 01 January 2020

 

34,790,174

68,023,856

102,814,030

Gain for the year

 

-

75,108,677

75,108,677

Total comprehensive income for the year

 

-

75,108,677

75,108,677

Balance at 31 December 2020

 

34,790,174

143,132,533

177,922,707

Gain for the period

 

-

40,715,279

40,715,279

Total comprehensive income for the period

 

-

40,715,279

40,715,279

Balance at 30 June 2021

 

34,790,174

183,847,812

218,637,986

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

1.  Company information

TMT Investments Plc ("TMT" or the "Company") is a company incorporated in Jersey with its registered office at 13 Castle Street, St Helier, JE1 1ES, Channel Islands.

 

The Company was incorporated and registered on 30 September 2010 in Jersey under the Companies (Jersey) Law 1991 (as amended) with registration number 106628 under the name TMT Investments Limited.  The Company obtained consent from the Jersey Financial Services Commission pursuant to the Control of Borrowing (Jersey) Order 1985 on 30 September 2010.  On 1 December 2010, the Company re-registered as a public company and changed its name to TMT Investments Plc.  The Company's ordinary shares were admitted to trading on the AIM market of the London Stock Exchange on 1 December 2010.

 

The memorandum and articles of association of the Company do not restrict its activities and therefore it has unlimited legal capacity.  The Company's ability to implement its investing policy and achieve its desired returns will be limited by its ability to identify and acquire suitable investments.  Suitable investment opportunities may not always be readily available.

 

The Company will seek to make investments in any region of the world.

 

Financial statements of the Company are prepared by and approved by the Directors in accordance with International Financial Reporting Standards, International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board as adopted by the European Union ("IFRSs").  The Company's accounting reference date is 31 December.

 

2.  Summary of significant accounting policies

 

2.1  Basis of presentation

 

Interim financial statements for the six months ended 30 June 2021 and 2020 are unaudited and were approved by the Directors on 17 August 2021.  They do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial statements for the year ended 31 December 2020 were prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The report of the auditor on those financial statements was unqualified and did not draw attention to any matters by way of emphasis of matter.

 

The principal accounting policies applied by the Company in the preparation of these unaudited financial statements are set out below and have been applied consistently.

 

The financial statements have been prepared on a going concern basis, under the historical cost basis as modified by the fair value of , as explained in the accounting policies below, and in accordance with IFRS.  Historical cost is generally based on the fair value of the consideration given in exchange for assets.

 

2.2  Foreign currency translation

 

(a) Functional and presentation currency

Items included in the financial statements of the Company are measured in United States Dollars ('US dollars', 'USD' or 'US$'), which is the Company's functional and presentation currency.

 

(b) Transactions and balances

Foreign currency transactions are translated into US$ using the exchange rates prevailing at the dates of the transactions.  Exchange differences arising from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

 

Conversation rates, USD

Currency

 

 

 

 

At 30/06/2021

Average rate, for six months ended 30/06/2021

 

British pounds, £

 

 

 

 

1.3819

1.3882

 

Euro, €

 

 

 

 

1.1862

1.2051

 

 

2.3  New IFRSs and interpretations

 

The following standards and amendments became effective from 1 January 2021, but did not have any material impact on the Company:

 

• Amendments to IFRS 4 "Insurance Contracts" - Deferral of IFRS 9

• Amendments to IFRS 9 "Financial Instruments"

• Amendments to IAS 39 "Financial Instruments: Recognition and Measurement"

• Amendments to IFRS 7 "Financial Instruments: Disclosures"- Interest Rate Benchmark Reform - Phase 2

 

3  Gain/(Loss) on investments

 

For six months ended 30/06/2021

 

For six months

 ended 30/06/2020

 

USD

 

USD

Gross interest income from convertible notes receivable

18,844

 

34,013

Net interest income from convertible notes receivable

18,844

 

34,013

Gains/(Losses) on changes in fair value of financial assets at FVPL

41,852,901

 

(1,181,529)

Other gains/(losses) on investment

100,068

 

(117,400)

Total gain/(loss) on investments

41,971,813

 

(1,264,916)

     

 

4  Segmental analysis

 

Geographic information

The Company has investments in six principal geographical areas - USA, Estonia, the United Kingdom, BVI, Cyprus and the Cayman Islands.

 

Non-current financial assets

 

As at 31/12/2020

 

USA

Israel

BVI

Cyprus

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

USD

Equity investments

90,078,690

155,000

1,780,250

-

36,711,439

7,718,112

136,443,491

Convertible notes & SAFEs

6,827,998

-

-

1,350,000

181,665

-

8,359,663

 Total

96,906,688

155,000

1,780,250

1,350,000

36,893,104

7,718,112

144,803,154

 

As at 30/06/2021

 

USA

Cayman Islands

BVI

Cyprus

Estonia

United Kingdom

Total

 

USD

USD

USD

USD

USD

USD

USD

Equity investments

106,244,120

-

1,780,250

-

67,502,624

13,147,379

188,674,373

Convertible notes & SAFEs

7,195,030

1,030,000

-

1,350,000

858,785

-

10,433,815

 Total

113,439,150

1,030,000

1,780,250

1,350,000

68,361,409

13,147,379

199,108,188

 

5  Administrative expenses

 

Administrative expenses include the following amounts:

 

For six months ended 30/06/2021

 

For six months ended

30/06/2020

 

USD

 

USD

Staff expenses (note 6)

395,818

 

326,349

Professional fees

228,715

 

115,522

Legal fees

83,048

 

14,102

Bank and LSE charges

8,034

 

8,364

Audit and accounting fees

17,851

 

14,371

Rent

-

 

47,298

Other expenses

69,453

 

34,087

 

802,919

 

560,093

 

The foreign exchange loss in the current financial period has been presented separately from administrative expenses. Accordingly, the respective amount of foreign exchange loss in the period ended 30 June 2020 has also been presented separately for comparison. As a result, administrative expenses for the six months ended 30 June 2020 decreased by 4.1% from US$584,031 to US$560,093. The relevant amounts in the Statement of Cash Flows for the period ended 30 June 2020 have been affected correspondingly.

 

6  Staff expenses

 

For six months ended 30/06/2021

 

For six months ended 30/06/2020

 

USD

 

USD

Directors' fees

103,218

 

92,589

Wages and salaries

292,600

 

233,760

 

395,818

 

326,349

 

Wages and salaries shown above include fees and salaries relating to the six months ended 30 June. Bonus Plan costs are not included in administrative expenses and are shown separately.

 

The Directors' fees for the six months ended 30 June 2021 and 2020 were as follows:

 

For six months ended 30/06/2021

 

For six months ended

30/06/2020

 

USD

 

USD

Alexander Selegenev

55,000

 

50,000

Yuri Mostovoy

27,500

 

25,000

James Joseph Mullins

15,218

 

12,589

Petr Lanin

5,500

 

5,000

 

103,218

 

92,589

 

The Directors' fees shown above are all classified as 'short term employment benefits' under International Accounting Standard 24. The Directors do not receive any pension contributions or other benefits. The average number of staff employed (excluding Directors) by the Company during the six months ended 30 June was 7 (six months ended 30 June 2020: 6).

 

Key management personnel of the Company are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Company, directly or indirectly. Key management of the Company are therefore considered to be the Directors of the Company. There were no transactions with the key management, other than their Directors fees, bonuses and reimbursement of business expenses.

 

Under the Company's bonus plan, subject to achieving a minimum hurdle NAV and high watermark conditions, the team receives an annual cash bonus equal to 10% of the net increases in the Company's NAV, adjusted for any changes in the Company's equity capital resulting from issuance of new shares, dividends, share buy-backs and similar corporate transactions.The Company`s bonus year runs from 1 January to 31 December.

 

If, pursuant to the Company's bonus plan, the bonus attributable to the NAV increase from 1 January 2021 to 30 June 2021 had been accrued during the period, it would have resulted in an additional bonus charge of US$4,108,784. As the NAV increase attributable to the first half of 2021 has not yet been realised, the respective bonus expenses have not been accrued in the current financial statements.

 

Due to a technical error in the calculation of the bonus pools in the bonus periods from July 2016 to December 2020 (the "Affected Bonus Periods"), the bonus pools in each of the Affected Bonus Periods were calculated on the basis of the opening position being the previous period's "adjusted NAV before bonus". Pursuant to the terms of the Company's bonus plan, each of the Affected Bonus Periods should have seen the calculation assess the annual growth in NAV from an opening position of "adjusted NAV after bonus". As a result, the amount of bonuses actually accrued in the Affected Bonus Periods were understated by an aggregate of US$372,556 (the "Underpaid Bonus"). As the total amount of the Underpaid Bonus is considered immaterial, the error has been corrected, and the Underpaid Bonus has been included in the current financial statements as an additional charge for the current period. The exact allocation of the Underpaid Bonus is expected to be approved and paid to the participants of the Company`s bonus plan shortly after the publication of this interim report.

 

Of the US$372,556 Underpaid Bonus amount, US$93,972 relates to directors of the Company.

 

7  Net finance income

 

For six months ended 30/06/2021

 

For six months ended 30/06/2020

 

USD

 

USD

Interest income

-

 

52,868

 

-

 

52,868

 

The Company had no deposits in the six months ended 30 June 2021.

 

8  Income tax expense

 

The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for Jersey companies is 0%.

 

9  Gain/(Loss) per share

 

The calculation of basic gain per share is based upon the net gain for the six months ended 30 June 2021 attributable to the ordinary shareholders of US$40,715,279 (for the six months ended 30 June 2020: net loss of US$1,725,211) and the weighted average number of ordinary shares outstanding calculated as follows:

 

Gain/(Loss) per share

For the six months ended 30/06/2021

 

For six months ended 30/06/2020

Basic gain/(loss) per share (US$ cents per share)

139.5

 

(5.91)

Gain/(Loss) attributable to equity holders of the entity

40,715,279

 

(1,725,211)

 

The weighted average number of ordinary shares outstanding was calculated as follows:

 

 

 

 

 

For the six months ended 30/06/2021

 

For the six months ended 30/06/2020

Weighted average number of shares in issue

 

 

 

Ordinary shares

29,185,831

 

29,185,831

 

29,185,831

 

29,185,831

 

During the six months ended 30 June 2021 and 30 June 2020 there were no dilutive instruments in issue.

 

10  Non-current financial assets

 

Reconciliation of fair value measurements of non-current financial assets:

 

 

At 30 June 2021

USD

 

At 31 December 2020

USD

Investments held at fair value through profit and loss

 

 

 

- unlisted shares (i)

188,674,373

 

136,443,491

- promissory notes (ii)

1,428,815

 

2,753,663

- SAFEs (iii)

9,005,000

 

5,606,000

 

199,108,188

 

144,803,154

 

 

At 30 June 2021

USD

 

At 31 December 2020

USD

Opening valuation

144,803,154

 

91,207,190

Purchases (including consulting and legal fees)

14,081,056

 

12,503,095

Disposal proceeds

(1,628,923)

 

(41,201,387)

Impairment losses in the year

-

 

(585,745)

Realised gain

873,923

 

29,314,214

Unrealised gains

40,978,978

 

53,565,787

Closing valuation

199,108,188

 

144,803,154

 

Movement in unrealised gains

 

 

 

Opening accumulated unrealised gains

111,980,464

 

68,114,510

Movement in unrealised gains

40,978,978

 

53,565,787

Transfer of previously unrealised gains to realised reserve on disposal of Investments

-

 

(9,699,833)

Closing accumulated unrealised gains

152,959,442

 

111,980,464

 

Reconciliation of investments, if held under the cost (less impairment) model:

 

Historical cost basis

 

 

 

Opening book cost

32,822,690

 

23,092,680

Purchases (including consulting & legal fees)

14,081,056

 

12,503,095

Disposals on sale of investment

(755,000)

 

(2,187,340)

Impairment losses in the year

-

 

(585,745)

Closing book cost

46,148,746

 

32,822,690

 

Valuation methodology

 

 

 

Revenue multiple

62,595,291

 

62,595,291

Cost and price of recent investment (reviewed for impairment and fair value adjustment)

136,512,897

 

82,207,863

 

199,108,188

 

144,803,154

 

Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

 

When measuring the fair value of a financial instrument, the Company uses relevant transactions during the year or shortly after the year end, which gives an indication of fair value and considers other valuation methods to provide evidence of value. The "price of recent investment" methodology is used mainly for venture capital investments, and the fair value is derived by reference to the most recent equity financing round or sizeable partial disposal. Fair value change is only recognised if that round involved a new external investor. The Company may assess the fair value in the absence of a relevant independent equity transaction by relying on other market observable data and valuation techniques,such as the analysis of revenue multiples of comparable companies and/or comparable transactions. The nature of such valuation techniques is highly judgmental and dependent on the market sentiment at the time of the analysis.

 

(i)  Equity investments as at 30 June 2021:

 

Investee company

Date of initial investment

Value at

1 Jan 2021,

USD

Additions to equity investments during the period, USD

Conversions from loan notes, USD

Gain/loss from changes in fair value of equity investments, USD

Disposals, USD

Value at 30 Jun 2021, USD

Equity stake owned

DepositPhotos

26.07.2011

10,836,105

-

-

-

-

10,836,105

16.67%

Wanelo

21.11.2011

1,825,596

-

-

(1,223,149)

-

602,447

4.69%

Backblaze

24.07.2012

56,004,337

-

-

-

-

56,004,337

9.97%

Remote.it

13.06.2014

3,025,285

-

-

-

-

3,025,285

1.64%

Anews

25.08.2014

 1,000,000

-

-

(670,000)

-

330,000

9.41%

Klear

01.09.2014

 155,000

-

-

327,798

(482,798)

-

-

Bolt

15.09.2014

36,201,527

-

-

30,019,969

-

66,221,496

1.42%

PandaDoc

11.07.2014

3,621,279

-

-

10,367,205

-

13,988,484

1.32%

Full Contact

11.01.2018

244,506

-

-

-

-

244,506

0.19%

ScentBird

13.04.2015

6,590,954

-

-

-

-

6,590,954

4.43%

Workiz

16.05.2016

768,845

228,933

-

-

-

997,778

2.32%

Vinebox

06.05.2016

450,015

-

-

-

-

450,015

2.42%

Hugo

19.01.2019

1,780,250

-

-

-

-

1,780,250

3.55%

MEL Science

25.02.2019

2,663,696

-

-

-

-

2,663,696

3.58%

Qumata (HealthyHealth)

06.06.2019

415,737

545,156

-

-

-

960,893

3.03%

eAgronom

31.08.2018

288,224

-

-

158,863

-

447,087

1.70%

Rocket Games (Legionfarm)

16.09.2019

200,000

-

-

-

-

200,000

2.00%

Timbeter

05.12.2019

221,688

-

-

-

-

221,688

4.64%

Classtag

03.02.2020

200,000

-

-

-

-

200,000

1.18%

3S Money Club

07.04.2020

620,870

2,713,976

-

1,894,517

-

5,229,363

9.00%

Hinterview

21.09.2020

660,197

1,398

-

-

-

661,595

6.44%

Virtual Mentor (Allright)

12.11.2020

772,500

-

-

-

-

772,500

3.00%

NovaKid

13.11.2020

500,000

-

-

1,809,854

-

2,309,854

1.22%

MTL Financial (OutFund)

17.11.2020

1,322,100

-

-

-

-

1,322,100

5.25%

Scalarr

15.08.2019

2,756,563

-

-

(1,378,281)

-

1,378,282

7.66%

Accern

21.08.2019

1,282,705

-

-

-

-

1,282,705

5.11%

Feel

13.08.2020

2,035,512

-

-

-

-

2,035,512

8.60%

Affise

18.09.2019

-

2,068,902

1,401,968

-

-

3,470,870

8.63%

3DLook

03.03.2021

-

999,999

-

-

-

999,999

3.77%

Fem Tech

30.03.2021

-

274,220

-

-

-

274,220

9.63%

Muncher

23.04.2021

-

2,059,999

-

-

-

2,059,999

4.77%

CyberWrite

20.05.2021

-

500,000

-

-

-

500,000

3.71%

Outvio

22.06.2021

-

612,353

-

-

-

612,353

4.00%

Total

 

136,443,491

10,004,936

1,401,968

41,306,776

(482,798)

188,674,373

 

 

(ii)  Convertible loan notes as at 30 June 2021:

 

Investee company

 

Date of initial investment

Value at 1 Jan 2021,

USD

Additions to convertible note investments during the period, USD

Conversions to equity, USD

Gain/loss from changes in fair value of convertible notes, USD

Disposals, USD

Value at 30 Jun 2021, USD

Term, years

Interest rate, %

Sharethis

26.03.2013

570,030

-

-

-

-

570,030

5.0

1.09%

KitApps

10.07.2013

600,000

-

-

546,125

(1,146,125)

-

-

-

Affise

18.09.2019

1,401,968

-

(1,401,968)

-

-

-

-

-

Postoplan

08.12.2020

181,665

677,120

-

-

-

858,785

1.0

2.00%

Total

 

2,753,663

677,120

(1,401,968)

546,125

(1,146,125)

1,428,815

 

 

 

(iii)  SAFEs as at 30 June 2021:

 

Investee company

 

Date of initial investment

Value at 1 Jan 2021,

USD

Additions to SAFE investments during the period, USD

Gain/loss from changes in fair value of SAFE investments, USD

Disposals, USD

Value at 30 Jun 2021, USD

Spin Technology

17.12.2018

300,000

-

-

-

300,000

Cheetah (Go-X)

29.07.2019

350,000

-

-

-

350,000

Retarget

24.09.2019

1,350,000

-

-

-

1,350,000

Rocket Games (Legionfarm)

24.09.2019

1,200,000

-

-

-

1,200,000

Classtag

03.02.2020

200,000

-

-

-

200,000

Moeco

08.07.2020

1,000,000

-

-

-

1,000,000

Volumetric

24.07.2020

206,000

-

-

-

206,000

Study Free

08.12.2020

1,000,000

-

-

-

1,000,000

Agendapro

15.04.2021

-

309,000

-

-

309,000

Aurabeat

03.05.2021

-

1,030,000

-

-

1,030,000

Synder (Cloud Business Inc)

26.05.2021

-

2,060,000

-

-

2,060,000

Total

 

5,606,000

3,399,000

-

-

9,005,000

 

11  Trade and other receivables

 

At 30 June 2021

 

At 31 December 2020

 

USD

 

USD

Prepayments

67,190

 

26,631

Other receivables

655,087

 

272,779

Interest receivable on promissory notes

56,948

 

188,428

 

779,225

 

487,838

 

The fair values of trade and other receivables approximate to their carrying amounts as presented above. During the six months ended 30 June 2021 and 2020 no balances were past due or impaired, and no credit losses had been expected.

 

Other receivables as of 30 June 2021 represent amounts due from the disposal of the investments in Klear and KitApps.

 

12  Cash and cash equivalents

 

The cash and cash equivalents as at 30 June 2021 include cash on hand and in banks.

 

Cash and cash equivalents comprise the following:

 

 

 

At 31 December 2020

 

USD

 

USD

Bank balances

22,870,620

 

39,004,288

 

22,870,620

 

39,004,288

 

The following table represents an analysis of cash and equivalents by rating agency designation based on Moody`s Investors Service and Standards & Poor`s credit rating or their equivalent:

 

 

At 30 June 2021

 

At 31 December 2020

 

USD

 

USD

Bank balances

 

 

 

BBB+ rating

22,870,620

 

39,004,288

 

22,870,620

 

39,004,288

 

13  Trade and other payables

 

At 30 June 2021

 

At 31 December 2020

 

USD

 

USD

Salaries payable

105,833

 

40,000

Directors' fees payable

28,282

 

22,954

Bonus payable

3,940,083

 

6,257,560

Trade payables

35,284

 

27,491

Other accrued expenses

10,565

 

24,568

 

4,120,047

 

6,372,573

 

The fair values of trade and other payables approximate to their carrying amounts as presented above.

 

14  Share capital

 

On 30 June 2021 the Company had an authorised share capital of unlimited ordinary shares of no par value and had issued ordinary share capital of:

 

At 30 June 2021

 

At 31 December 2020

 

 

USD

 

USD

 

Share capital

34,790,174

 

34,790,174

 

 

 

 

 

 

Issued capital comprises:

Number

 

Number

 

Fully paid ordinary shares

29,185,831

 

29,185,831

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Share capital,

USD

Balance at 31 December 2020

29,185,831

 

29,185,831

Balance at 30 June 2021

29,185,831

 

29,185,831

 

There have been no changes to the Company's ordinary share capital between 30 June 2021 and the date of approval of these financial statements.

 

15  Related party transactions

 

The Company's Directors receive fees and bonuses from the Company, details of which can be found in Note 6.

 

16  Subsequent events

 

In July 2021, the Company invested additional €400,000 in Postoplan OÜ, a social network marketing platform, which helps create, schedule, and promote content (www.postoplan.app).

 

In July 2021, the Company invested additional US$640,000 in Novakid, an online English language school for children (www.novakidschool.com).

 

In July 2021, the Company invested US$2,000,000 in Collectly, Inc., a tech-enabled patient billing platform (www.collectly.co).

 

In July 2021, the Company invested US$1,099,999 in VertoFX Ltd, a UK-based cross-border payments and foreign exchange solution facilitating commerce for modern businesses, rapidly expanding in Africa (www.vertofx.com).

 

In July 2021, the Company invested US$1,000,000 in Metro Speedy Technologies Inc., a technology based local delivery company providing on-demand, same day or scheduled delivery services (www.metrospeedy.com).

 

In August 2021, the Company invested US$1,000,000 in Academy of Change, a personalised educational service for women on lifestyle topics (www.akademiaperemen.ru).

 

In August 2021, the Company invested an additional US$2,000,000 in cloud storage provider Backblaze (www.backblaze.com).

 

These events after the reporting period are not reflected in the NAV and/or the financial statements as of 30 June 2021.

 

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