Quarterly NAV Announcement and Trading Update
Summary by AI BETAClose X
The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area (other than to professional investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of South Africa.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which forms part of domestic law in the United Kingdom pursuant to The European Union Withdrawal Act 2018, as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.
5 May 2026
Chrysalis Investments Limited ("Chrysalis" or the "Company")
Quarterly NAV Announcement and Trading Update
Net Asset Value
The Company announces that as at 31 March 2026 the unaudited net asset value ("NAV") per ordinary share was 137.27 pence.
The NAV calculation is based on the Company's issued share capital as at 31 March 2026 of 482,873,805 ordinary shares of no par value.
March's NAV per share represents a 28.1 pence per share (17.0%) decrease since 31 December 2025, this movement largely reflects the performance of global equity markets over the period, with 30th March representing the year to date low for NASDAQ and the S&P 500. These indices have recovered by 16.7% and 10.7% respectively since that date. The operational performance of the portfolio is generally strong, particularly at Starling, Smart, and wefox.
The decrease in the fair value of the portfolio accounted for approximately 28.5 pence per share, with foreign exchange adding 0.4 pence per share. The share buyback led to 0.9 pence per share of accretion; fees and expenses make up the balance.
Starling and Klarna accounted for the majority of the write down over the period. Starling's carrying value on a pence per share basis fell by 12.4p while Klarna fell by 10.2p. The movement in these two assets accounted for 22.6p of the 28.1p decline.
For Starling, the comparable peer group used fell approximately 20% over the period due to conflict in the Middle East and its impact on equity markets; given the strong operational momentum at Starling, including a fourth Engine contract win announcement with SBS Bank (New Zealand), this downward move was not fully reflected in Starling's valuation.
Following positive regulatory engagement, Starling has lifted a number of onboarding controls in relation to the restrictions that have been in place, which have had a corresponding positive impact on onboarding customer and underlying user growth.
Klarna's share price declined by 56% over the period which was driven by various factors. Equity markets were impacted by geopolitical tensions, the potential implications and disruption of AI, and broader concerns around the macroeconomic environment. In addition to this, Klarna downgraded its profit guidance for 2026, which was largely driven by the accounting treating of its fair financing product. Growth metrics however remain very strong and GMV growth of +32% was better than expected over Q4 2025.
The Company completed a €7 million investment in wefox post period end, as part of a larger funding round with participation from a number of existing investors. As a result of this investment, the uncertainty discount has been removed from the valuation, this was largely offset by other valuation metrics. As a result of improved economics negotiated through the recent investment, the Company benefits from strong downside protection and higher gross proceeds at lower equity valuations. The unrestricted group within wefox Holdings should now have a cash runway to approximately the end of 2027 as a result of this funding round.
Richard Watts and Nick Williamson, Managing Partners of Chrysalis Investment Partners LLP comment:
"The decline in NAV over the period, largely reflects the movement in comparable peer groups rather than the operational progress and performance of our portfolio companies.
Starling's new advertising campaign commenced in April, and we believe that the early signs in terms of growth are encouraging, with new customer numbers up over 100% year-on-year since marketing spend accelerated. We were also highly encouraged to see Starling announce a fourth contract win with SBS Bank in New Zealand, further demonstrating the momentum of its software proposition.
Despite Klarna's material derating over the period, we remain highly encouraged by the growth of Klarna and the traction of its products, particularly its fair financing product. We remain confident that Klarna has built a highly profitable business model, and we believe that we will see a marked acceleration in profitability once the growth in fair financing, and the accounting treatment of that product, moderates. It was also highly encouraging to see the Klarna Board Chair (Michael Moritz) acquire $50m of shares during the period.
Post period end, we led a funding round at wefox, committing €7 million as part of larger funding round which should give the unrestricted group an operating runway to around the end of 2027, when combined with the agreed cost reduction programme.
We continue to work closely with our portfolio companies and are assisting them in preparing for a successful exit and maximising their future valuations.''
Portfolio Activity
There has been minimal net investment activity in the portfolio over the period.
As mentioned last quarter, wefox required €12-15 million to extend its cash runway; Chrysalis made a €3 million (£2.6 million) investment early in the period as part of this requirement, which is in addition to the €7 million investment referenced above.
Elsewhere, there was a release from escrow of Featurespace consideration of approximately £4.8 million.
Over the period, the Company continued to buy back shares, with 12.1 million shares bought into treasury for an approximate cost of £12.3 million. Since initiating the buyback programme, a total of £115.5 million has been returned to shareholders, which has subsequently risen to £117.0 million as of as of 28 April.
Portfolio Update
Starling
Starling saw a number of new product launches over the period. These included its third AI customer solution - Starling Assistant - which is the UK's first agentic AI tool to help consumers manage day-to-day finances and a "Making Tax Digital" tool for its SME base.
In April, Starling rolled out its largest ever brand campaign across multiple formats, including TV, out-of-home, video-on-demand and social media. The campaign is expected to run for two months and is part of a customer activation drive, following its brand refresh in September 2025 and its new "Good with Money" message.
Raman Bhatia - Starling CEO - commented on LinkedIn that the impact of this marketing campaign had seen an "…incredible increase in new customers, up over 100% compared to this time last year."
Starling now has in excess of £500m of surplus capital on its balance sheet which represents significant strategic optionality.
Smart Pension
As announced last quarter, Keystone signed a multi-phase technology partnership agreement with Hargreaves Lansdown's Workplace business. Keystone has a robust pipeline of potential clients.
Following continued growth in contributions, and the integrations of certain acquisitions through 2025, SPMT surpassed £10 billion of AUM as of mid-April 2026. This compares to approximately £2.1 billion of AUM at the end of 2021, implying a 5x increase over the last four years.
The UK pensions market continues to consolidate. In April, it was announced that Standard Life had bought Aegon UK for £2 billion, which includes the Aegon Master Trust, one of the biggest in the market. Cushon was also recently acquired by WTW.
Klarna
While the difficult market backdrop - in particular the selloff of SaaS names considered to be at risk from AI, which spread into other tech areas - drove most of Klarna's underperformance over the quarter, its reduced guidance for 2026 at the 4Q25 results was also a concern for investors.
Growth over 4Q25 was better than expected, with GMV growing 32% year-on-year (versus expectations of 30%) and revenue up 39% (versus 37% expected); however, transaction margin dollars ("TMD", equivalent to gross profit) came in at $372 million (up 18%) versus expectations of c$394 million (up 25%). The miss on TMD was a result of product mix shifting more towards Fair Financing products versus BNPL; as previously discussed, IFRS requires upfront recognition of expected lifetime impairments, making Fair Financing loans unprofitable in their month of origination. As such, the Investment Adviser sees this more as a timing issue, rather than one of fundamental lower profitability. While the shares have recovered somewhat from their lows post the 4Q25 results, the Investment Adviser believes investors will want to see evidence of Klarna meeting its revised trajectory before the shares have a chance of rerating. If investors get this comfort, then the outer years' valuation multiples potentially look highly attractive.
Wefox
Trading at wefox has been robust year to date, with profit tracking slightly ahead of budget. This is encouraging following the Company's first full year of profitability in 2025.
TAF, which is the largest asset within the group, continues to perform strongly and there now lies an opportunity to drive equity value with the TAF business, particularly as TAF looks to expand into new product categories and countries.
Cash Update
As of 31 March 2026, the Company had gross cash and equivalents of approximately £28.2 million, and positions in Klarna and Wise worth approximately £41.8 million and £2.7 million respectively, giving a total liquidity position of approximately £72.7 million.
The change in cash over the period was mainly due to debt repayment activities, which accounted for £44.5 million, as well as the buyback, which accounted for £12.6 million, and the modest investment activity referenced above.
The Company had a net cash position of approximately £10 million, once the remaining £17.2 million term loan is accounted for.
Portfolio Composition
As of 31 March 2026, the portfolio composition was as follows:
|
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31-Mar |
|
|
Portfolio Company |
Carrying Value (£ millions) |
% of NAV |
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Starling Smart Pension wefox Klarna Brandtech Secret Escapes Deep Instinct Featurespace Wise Sorted |
374.7 123.5 55.9 41.8 26.2 15.9 7.0 4.7 2.7 0.3 |
56.5% 18.6% 8.4% 6.3% 4.0% 2.4% 1.1% 0.7% 0.4% 0.0% |
|
Gross cash and cash equivalents |
28.2 |
4.2% |
|
Other net assets/(liabilities) |
(18.1) |
(2.7)% |
|
Net asset value |
662.9 |
100.0% |
Source: Chrysalis Investments Limited. The Company's Featurespace investment has been disposed and the amounts remaining relate to deferred disposal proceeds.
Factsheet
An updated Company factsheet will shortly be available on the Company's website: https://www.chrysalisinvestments.co.uk.
-ENDS-
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For further information, please contact:
Media Montfort Communications: Charlotte McMullen / Imogen Saunders
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+44 (0) 7921 881 800 chrysalis@montfort.london |
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Investment Adviser Chrysalis Investment Partners LLP: James Simpson
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+44 (0) 20 7871 5343 |
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AIFM G10 Capital Limited: Dominic Williams
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+44 (0) 20 7397 5450 |
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Deutsche Numis: Nathan Brown / Matt Goss
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+44 (0) 20 7260 1000 |
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Rothschild & Co: Alice Squires / Tim Brenton / Ahmed Jibril |
+44 (0) 20 7280 5000 |
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Panmure Liberum: Chris Clarke / Darren Vickers
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+44 (0) 20 3100 2222 |
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Barclays Bank PLC: Dion Di Miceli / Stuart Muress / James Atkinson
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+44 (0) 20 7623 2323 |
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IQEQ Fund Services (Guernsey) Limited: Aimee Gontier / Elaine Smeja
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+44 (0) 1481 231 852 |
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LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's website at https://www.chrysalisinvestments.co.uk
The information contained in this announcement regarding the Company's investments has been provided by the relevant underlying portfolio company and has not been independently verified by the Company. The information contained herein is unaudited.
This announcement is for information purposes only and is not an offer to invest. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.
The Company is an alternative investment fund ("AIF") for the purposes of the AIFM Directive and as such is required to have an investment manager which is duly authorised to undertake the role of an alternative investment fund manager ("AIFM"). G10 Capital Limited is the AIFM to the Company. Chrysalis Investment Partners LLP is the investment adviser to G10 Capital Limited. Chrysalis Investment Partners LLP (FRN: 1009684) is an Appointed Representative of G10 Capital (FRN: 648953) Limited, which is authorised and regulated by the Financial Conduct Authority.
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