REG - TMT Investments - Half-year Report
16/08/2022 07:00
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RNS Number : 1093W TMT Investments PLC 16 August 2022
16 August 2022
TMT INVESTMENTS PLC
("TMT" or the "Company")
Half-year report for the six months to 30 June 2022
TMT Investments Plc (AIM: TMT), the venture capital company investing in
high-growth technology companies, is pleased to announce its unaudited interim
results for the half-year ended 30 June 2022.
The interim report will shortly be available on the Company's website,
www.tmtinvestments.com (http://www.tmtinvestments.com) .
Highlights:
· NAV per share of US$6.68 (down 25.8% from US$9.00 as of 31 December
2021)
· Total NAV of US$210.1 million (down from US$283.1 million as of 31
December 2021)
· 5-year IRR of 26.6% per annum
· US$7.3 million of investments across 6 new and existing companies in
the first half of 2022
· Diversified global portfolio of over 55 companies focused mainly
around SaaS (software-as-a-service), marketplaces, big data/cloud, EdTech,
FinTech, e-commerce, and FoodTech solutions
· US$13 million in cash reserves as of 15 August 2022
Alexander Selegenev, Executive Director of TMT, commented:
"The first half of 2022 saw continued investor interest in high-growth,
high-quality digital technology companies, resulting in positive revaluations
of several of TMT's portfolio companies that have demonstrated ongoing growth
throughout the period and received further validation for their business
models by raising fresh equity capital at higher valuations, namely Accern,
Outfund, FemTech, Spin Technology and Feel. In tandem, most other portfolio
companies have continued to either grow their businesses quietly in the
background or diligently react to the evolving market situation, adapting and
repositioning their businesses as required.
We were reasonably pleased with our portfolio companies' performance in the
first half of 2022, especially against the backdrop of the recent market
volatility and the worsening economic outlook for the global economy. While
the recent period of uncertainty has not been long enough to have a broad and
sustained negative effect on the underlying businesses of technology
companies, the recent larger-cap public market sell-off has led to reduced
valuations of privately held start-ups, although with a significantly lower
negative effect on the valuations of earlier-stage start-ups, the stage at
which TMT is most closely focused.
The significantly reduced share prices of publicly traded technology companies
negatively affected the value of TMT's equity stake in NASDAQ-traded cloud
storage company Backblaze (www.backblaze.com (http://www.backblaze.com) ),
resulting in a US$43.6 million reduction in the value of TMT's investment in
Backblaze as at 30 June 2022. Despite such financial market volatility,
Backblaze's business has been developing well, recording 28% revenue growth in
the second quarter of 2022 compared to the same period of 2021 and the recent
announcement of many new partnerships and integrations. Backblaze remains
well capitalised with a reported net cash position of approximately US$51
million at 30 June 2022.
Consistent with TMT's prudent valuation policy, the Company has also decided
to reduce the fair value of its equity stake in Bolt (www.bolt.eu
(http://www.bolt.eu) ) by 28%, despite the fact that the previous valuation
level was established on the back of Bolt's successful €628 million equity
raise, which completed only recently in January 2022 - after the market
correction had started. This decision reflects the significant reduction in
the values of Bolt's publicly traded peers, namely Uber and Lyft, as of 30
June 2022.
Business-wise, both Bolt and Backblaze, as well as most of TMT's other
portfolio companies, have continued to perform reasonably well, with very few
investees experiencing clear difficulties at this juncture.
Substantial recent cash exits from Wrike ($23m in 2018), Pipedrive (US$41m in
2020) and Depositphotos (initial cash exit consideration of US$12.9m in 2021),
together with other cash exits and the proceeds of the Company's fund raise
conducted in October 2021 (which raised US$19.3 million before expenses), have
been reinvested into earlier and mid-stage companies as part of planning the
next generation of the portfolio's potential winners. In the first half of
2022, TMT made US$7.3m of investments into 6 existing and new portfolio
companies. As of 30 June 2022, early and mid-stage companies represented 45.1%
of TMT's total portfolio value and 95% of the total number of portfolio
companies.
TMT is continuing to source and identify investment opportunities very
selectively and at appropriate valuation levels, whilst employing an extremely
cautious general investment approach for the time being. With no financial
debt and cash reserves of approximately US$13 million at 15 August 2022), TMT
is well positioned to ride out the current market volatility and make
selective investments when the right opportunities present themselves. The
Company expects a number of positive revaluations across its portfolio by the
end of 2022 and will update shareholders on relevant developments as
appropriate."
For further information contact:
TMT Investments Plc +44 (0)1534 281 800
Alexander Selegenev (Computershare - Company Secretary)
Executive Director
www.tmtinvestments.com (http://www.tmtinvestments.com) alexander.selegenev@tmtinvestments.com
(mailto:alexander.selegenev@tmtinvestments.com)
Strand Hanson Limited +44 (0)20 7409 3494
(Nominated Adviser)
James Bellman / James Dance
Cenkos Securities plc +44 (0)20 7397 8900
(Joint Broker)
Ben Jeynes
Hybridan LLP +44 (0)20 3764 2341
(Joint Broker)
Claire Louise Noyce
Kinlan Communications +44 (0)20 7638 3435
David Hothersall davidh@kinlan.net (mailto:davidh@kinlan.net)
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 as it forms part of United Kingdom domestic law by virtue of
the European (Withdrawal) Act 2018 (as amended).
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 55 companies and net assets of US$210 million as
of 30 June 2022. 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 (http://www.tmtinvestments.com) .
Twitter (https://twitter.com/TMT_PLC)
LinkedIn (http://www.linkedin.com/company/tmt-investments-plc)
Facebook (https://www.facebook.com/TmtInvestmentsPlc/)
EXECUTIVE DIRECTOR'S STATEMENT
The first half of 2022 saw substantially increased market and economic
volatility. The effect of this volatility has had a mixed effect on
privately held technology companies.
While the recent period of uncertainty has not been long enough to have a
broad and sustained negative effect on the underlying businesses of technology
companies, the recent larger-cap public market sell-off has led to reduced
valuations of privately held start-ups, although with a significantly lower
negative effect on the valuations of earlier-stage start-ups, the stage at
which TMT Investments Plc ("TMT" or the "Company") is most closely focused.
Indeed, the period saw continued investor interest in high-growth,
high-quality digital technology companies, resulting in positive revaluations
of several of TMT's portfolio companies which have demonstrated ongoing growth
throughout the period and received further validation for their business
models by raising fresh equity capital at higher valuations during the period.
As can be seen from the BVP Cloud Index (https://cloudindex.bvp.com/
(https://cloudindex.bvp.com/) ), median valuation multiples for larger-cap
publicly traded technology companies have fallen sharply, in effect returning
to the more sustainable levels seen in 2013-2017. With regard to privately
held start-ups, it is mainly the valuations of later-stage companies (i.e.
Series B and later) that have been negatively affected
(https://stack.angellist.com/valuations
(https://stack.angellist.com/valuations) ).
The significantly reduced share prices of publicly traded technology companies
negatively affected the value of TMT's equity stake in NASDAQ-traded cloud
storage company Backblaze (www.backblaze.com (http://www.backblaze.com) ),
resulting in a US$43.6 million reduction in the value of TMT's investment in
Backblaze as at 30 June 2022.
Consistent with TMT's prudent valuation policy, the Company has also decided
to reduce the fair value of its equity stake in Bolt (www.bolt.eu
(http://www.bolt.eu) ) by 28%, despite the fact that the previous valuation
level was established on the back of Bolt's successful €628 million equity
raise, which completed only recently in January 2022 - after the market
correction had started. This decision reflects the significant reduction in
the values of Bolt's publicly traded peers, namely Uber and Lyft, as of 30
June 2022.
Business-wise however, both Bolt and Backblaze, as well as most of TMT's other
portfolio companies, have continued to perform reasonably well, with very few
investees experiencing clear difficulties at this juncture.
The main negative effect of increased market and economic volatility on
earlier-stage start-ups is not a reduction in valuation levels per se, but the
generally lower availability of funding. We are seeing that founders are
having to go the extra mile to prove the quality and potential of their
businesses, as investors become more discerning. High-quality fast-growing
earlier-stage start-ups, however, can still currently demand broadly similar
valuation levels as they did prior to 2022.
In that sense, the current composition of TMT's portfolio has turned out to be
quite auspicious. Following a number of successful exits from later-stage
portfolio companies (such as Wrike, Pipedrive, and Depositphotos) in recent
years, TMT redeployed the cash proceeds into mainly late-Seed / pre Series-A
opportunities, whose valuations have proven to be much more defensive in the
current environment. TMT's approach to investing in earlier-stage stage
companies is to avoid overpaying and to remain highly diligent when investing
in follow-on rounds, which provides extra buffer in the event of future down
rounds. In addition, the fact that many of the investments TMT made at those
stages were structured in the form of convertible notes currently provides
further defence against potential down rounds.
NAV per share
The Company's NAV per share decreased by 25.8% in the first half of 2022 to
US$6.68 as at 30 June 2022 (31 December 2021: US$9.00), mainly as a result of
the significant downward revaluation of Backblaze and Bolt during H1 2022.
Operating expenses
In the first half of 2022, the Company's administrative expenses of US$772,317
were slightly below corresponding 2021 levels (H1 2021: US$802,919),
reflecting the Company's reduced level of investment and business development
activities during the period.
Financial position
As of 30 June 2022, the Company had no financial debt and cash reserves of
approximately US$14 million (31 December 2021: US$26 million). As of 15
August 2022, the Company had cash reserves of approximately US$13 million.
Outlook
TMT has a diversified investment portfolio of over 55 companies, focused
primarily on big data/cloud, SaaS (software-as-a-service), marketplaces,
e-commerce, FinTech, EdTech and FoodTech, most of which continue to benefit
from the ongoing shift to online consumer habits and remote working.
The recent military conflict in Ukraine, followed by the broad sanctions
against Russia, have undoubtedly added significantly to global market
uncertainty. TMT invests globally and its portfolio is highly diversified in
terms of revenue origin from its underlying companies. Given the
international nature of online/digital businesses, a small number of the
Company's earlier-stage portfolio companies have varying degrees of revenue
exposure to Russia and Ukraine. At the time of TMT's 2021 Annual Report
published in March 2022, the Company said it had identified a total of
approximately US$4.6 million of potential write-downs across eight of its
portfolio companies that were most likely to be negatively affected by the
military conflict in Ukraine. The actual negative effect from the relevant
events estimated in this report has turned out to be smaller than initially
anticipated, with only four portfolio companies' valuations negatively
affected (see the Portfolio Developments section below). This has resulted
in a corresponding US$2.25 million negative effect on the Company's NAV.
A number of negative trends and factors continue to affect the prospects of
the wider global economy, and the ultimate effect on the technology sector and
its participants will depend on how global dynamics unfold in the coming
months.
Despite the ongoing volatility, investors continue to be interested in
high-quality technology businesses, and TMT is continuing to source and
identify such opportunities very selectively and at appropriate valuation
levels, whilst employing an extremely cautious general investment approach for
the time being. With no financial debt and cash reserves of approximately
US$13 million at 15 August 2022), TMT is well positioned to ride out the
current market volatility and make selective investments when the right
opportunities present themselves. The Company expects a number of positive
revaluations across its portfolio by the end of 2022 and will update
shareholders on relevant developments as appropriate.
Alexander Selegenev
Executive Director
15 August 2022
PORTFOLIO DEVELOPMENTS
We were reasonably pleased with our portfolio companies' performance in the
first half of 2022, especially against the backdrop of the recent market
volatility and worsening economic outlook for the global economy. A number
of portfolio companies received further validation for their business models
by raising fresh equity capital at higher valuations. In tandem, most other
portfolio companies have continued to either grow their businesses quietly in
the background or diligently react to the evolving market situation, adapting
and repositioning their businesses as required. 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.
While the selling pressure on publicly-traded technology companies in the
first half of 2022 has directly negatively affected the valuation of
NASDAQ-traded Backblaze (TMT's second largest portfolio holding), Backblaze's
business has been developing well - with 28% revenue growth in the second
quarter of 2022 compared to the same period of 2021 and the recent
announcement of many new partnerships and integrations. Backblaze remains
well capitalised with a reported net cash position of approximately US$51
million at 30 June 2022, and at its share price as of 11 August 2022 was
valued at approximately 2.2 times its announced expected 2022 revenue.
Despite the prudent reduction in the estimated value of Bolt based on
comparable multiples, Bolt remains well-capitalised and continues to grow
successfully across its multiple business lines and geographic markets.
As for the rest of the portfolio, many of the Company's investees entered the
current period of volatility with freshly raised funds and continue to grow
and optimize their businesses.
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 2022 in accordance
with applicable accounting standards.
Full and partial cash exits, and positive revaluations:
· Accern, a no-code AI platform for the financial service industry
(www.accern.com (http://www.accern.com) ), completed a new equity funding
round. The transaction represented a revaluation uplift of US$1.6 million
(or 124%) in the fair value of TMT's investment, compared to the previous
reported amount as of 31 December 2021.
· MTL Financial, trading as Outfund, a revenue-based financing provider
(www.out.fund (http://www.out.fund) ), completed a new equity funding round.
The transaction represented a revaluation uplift of US$1.5 million (or 112%)
in the fair value of TMT's investment, compared to the previous reported
amount as of 31 December 2021.
· FemTech, a London-based technology accelerator focused on female
founders (www.femtechlab.com (http://www.femtechlab.com) ), completed a new
equity funding round. The transaction represented a revaluation uplift of
US$0.9 million (or 318%) in the fair value of TMT's investment, compared to
the previous reported amount as of 31 December 2021.
· Spin Technology, an all-in-one SaaS data protection platform for
mission-critical SaaS apps (www.spin.ai (http://www.spin.ai) ), completed a
new equity funding round. The transaction represented a revaluation uplift
of US$0.7 million (or 221%) in the fair value of TMT's investment, compared to
the previous reported amount as of 31 December 2021.
· Feel, a subscription-based multivitamin and supplement producer
(www.wearefeel.com (http://www.wearefeel.com) ), completed a new equity
funding round. The transaction represented a revaluation uplift of US$0.1
million (or 3%) in the fair value of TMT's investment, compared to the
previous reported amount as of 31 December 2021 (adjusted for the value of
TMT's additional investment made in Feel in 2022).
Negative revaluations:
The following of the Company's portfolio investments were negatively revalued
in the first half of 2022:
Portfolio Company Write-down amount (US$) Reduction as % of fair value reported as of 31 Dec 2021 Reasons for write-down
Academy of Change 670,000 67% Insufficient progress in the last year; revenue exposure to Russia
Anews 330,000 100% Lack of progress in the last year
Backblaze 43,593,102 69% Based on the closing mid-market price of US$5.23 per share on 30 June 2022
Bolt 29,054,520 28% Based on comparable company multiple analysis (reduction from the previous
valuation based on Bolt's independent equity financing round completed in
January 2022)
EdVibe 750,001 50% Insufficient progress in the last year; revenue exposure to Russia
Hugo 1,976,290 53% Acquisition by Delivery Hero announced in Oct 2021 has not completed;
valuation returned to the previous level
StudyFree 500,000 50% Lack of progress in the last 1.5 years
Total 76,873,913
Key developments for the five largest portfolio holdings in the first half of
2022 (source: TMT's portfolio companies):
Bolt (ride-hailing and food delivery service):
· Active in over 450 cities globally (up from over 400 cities as of 31
December 2021)
· Triple-digit annualised revenue growth
Backblaze (cloud storage provider):
· Double-digit annualised revenue growth continued
· Multiple new integrations and partnerships building basis for future
growth
PandaDoc (proposal automation and contract management software):
· Double-digit annualised revenue growth
· Over 35,000 paying clients (from over 30,000 as of 31 December 2021)
· Acquisition of LiveNotary to launch a remote online notarisation
service
3S Money Club (provider of corporate multi-currency bank accounts):
· Triple-digit annualised revenue growth
· Profitable and cash flow positive
Scentbird (Perfume, wellness and beauty product subscription service):
· Stable revenue
· Near break-even
· Over 600 scents in the product range
New investments:
Given the high level of market uncertainty and volatility, TMT was even more
selective in the first half of 2022, investing approximately US$7.3 million
across the following companies:
· Initial €825,000 in Bairrissimo, LDA, trading as Bairro, an instant
food and grocery delivery company in Portugal (www.bairro.io
(http://www.bairro.io) );
· Initial US$4,000,000 in SOAX Ltd, a SaaS-enabled marketplace of tools
to collect publicly available data on a scale (https://soax.com
(https://soax.com) );
· Additional €400,000 in Postoplan OÜ, a social network marketing
platform, which helps create, schedule, and promote content (www.postoplan.app
(http://www.postoplan.app) );
· Initial £999,918 in Laundryheap Limited, a marketplace for on-demand
laundry and dry-cleaning services (www.laundryheap.com
(http://www.laundryheap.com) );
· Additional US$250,000 in Legionfarm, Inc., an online game coaching
platform (www.legionfarm.com (http://www.legionfarm.com) ); and
· Additional £250,000 in Feel Holdings Limited, a subscription-based
multivitamin and supplement producer (www.wearefeel.com
(http://www.wearefeel.com) ).
ESG POLICY
Introduction
As with most business sectors, technology has the capacity to make the world a
better place. Given the high pace of technology innovation we are witnessing,
TMT believes this capacity is intensified in the case of technology. However,
technological innovation for its own sake is meaningless unless it results in
tangible benefits in terms of productivity, improved user experience, higher
efficiency, positive impact in its chosen sectors, improved profitability or
other desired objectives.
ESG evaluation can be carried out in a number of different ways. Among other
factors, its effectiveness will depend on the questions being addressed, the
principles being applied and the quality of data available. Indeed, at times
the prioritising of some principles can have a negative impact on others,
given the asymmetric nature of benefits that can sometimes arise. An example
is when alleviation of poverty in the short term comes at a higher
environmental cost.
The social and economic fallout from the COVID-19 pandemic has served to put
the ESG agenda into sharper relief and has accelerated the intensity of focus.
TMT started to formalise its approach to ESG in its initial ESG Policy
announced in the 2021 Annual Report, which is being confirmed in this 2022
Interim Report and will be subsequently updated as required.
As an investment company, TMT has been monitoring ESG issues and taking them
into account before they began to enter the mainstream investment agenda. As
such, the Company has made a number of investments in ESG-focused companies
that also meet TMT's investment criteria. These include Timbeter, a SaaS
solution for quick and accurate timber measurement and data management, which
is making the forestry industry more sustainable, profitable and efficient
(www.timbeter.com); eAgronom, which provides a unique combination of services
to grain farmers: carbon programmes, an AI-powered consulting service and farm
management software enabling farmers to build sustainable businesses and
preserve nature (www.eagronom.com); Mobilo, an eco-friendly solution allowing
users to digitally share contact details instead of using paper/plastic
business cards and turn meetings into leads (www.mobilocard.com); and
FemTechLab, Europe's first tech accelerator focused on female founders
(www.femtechlab.com (http://www.femtechlab.com) );
TMT holds minority positions in its portfolio companies and therefore can
exert influence on ESG matters in two main ways: first, by screening
investments for exclusion from investment and second, by engaging in
constructive dialogue with portfolio companies and monitoring progress. The
Company's ESG policy reflects this approach.
TMT itself, as an investment company with limited internal resources, has
little impact on the environment. The Company's team is mindful of reducing
its travel, paper consumption, energy costs and other environmental impact
wherever possible. TMT has adopted the Quoted Companies Alliance (QCA)
Corporate Governance Code for Small & Mid-Sized Companies, which already
covers a number of well-established ESG items.
TMT's ESG policy is outlined below.
TMT's 3 guiding ESG principles for portfolio companies: relevant, realistic
and accountable
TMT's three ESG principles guide and inform potential portfolio companies of
the Company's approach to ESG and are at the core of what good ESG looks like.
They are specific and challenging, whilst allowing portfolio companies to
engage with them both at an earlier stage of development and as they grow in
size.
Relevant
· Is the investee addressing ESG where it can make the greatest impact
in terms of its business model?
· Has the investee undertaken an ESG materiality assessment and, if so,
how has this informed its ESG framework?
· Have ESG risks, as well as opportunities, been identified?
Realistic
· Is the investee developing an ESG roadmap as part of its business
plan?
· Are the investee's ESG objectives achievable in view of its current
resources?
· What resources does the investee need to consider in order to
progress on its ESG roadmap?
Accountable
· How is the investee evaluating its ESG activities and engagement?
· Is the investee conducting ESG benchmarking against its peers?
· Does the investee review its ESG metrics and reporting process in
view of latest ESG, scientific and technological developments?
TMT's approach
TMT's ESG policy is based on a 3-step approach:
Step 1: Filter out by Exclusion list
TMT's exclusion list sets out the sectors, businesses and activities in which
the Company will not invest due to having as their objective, or direct impact
on, any of the following:
1. Slavery, human trafficking, forced or compulsory labour, or
unlawful / harmful child labour.
2. Production or sale of illegal or banned products, or involvement in
illegal activities.
3. Activities that compromise endangered or protected wildlife.
4. Production or sale of hazardous chemicals, pesticides and waste.
5. Manufacture, distribution or sale of arms or ammunitions.
6. Manufacture of, or trade in, tobacco or drugs.
7. Manufacture or sale of pornography.
8. Trade in human body parts or organs.
9. Animal testing other than for the satisfaction of medical
regulatory requirements.
10. Production or other trade related to unbonded asbestos fibres.
Step 2: Assess level of ESG Engagement
Step 2 focuses on assessing how the proposed portfolio company incorporates
ESG in its business model and company culture.
In its investment selection process, TMT examines how each potential investee
company is addressing and incorporating ESG issues based on TMT's principles
of being relevant, realistic and accountable, feeding the results into an
evaluation sheet for presentation to TMT's Initial Investment Committee and
the Formal Investment Committee. If necessary, remedial actions or areas for
improvement are agreed with the investee company. For follow-on investments,
TMT requires a formal update from the investee highlighting any divergence
from TMT's initial assessment.
Step 3: Engagement with portfolio companies on ESG
ESG by its very nature is a journey, which needs to adapt to changing
environmental, social and governance dynamics, in view of latest developments.
Two-way dialogue and engagement with portfolio companies is an essential part
of this journey, in which both parties are sharing and learning. TMT therefore
includes ESG topics as part of its continuous engagement with portfolio
companies.
FINANCIAL STATEMENTS
Statement of Comprehensive Income (unaudited)
For the six months ended 30/06/2022 For the six months ended 30/06/2021
Notes USD USD
(Losses)/Gains on investments 3 (72,148,629) 41,971,813
Dividend income 105,700 -
Total investment (loss)/income (72,042,929) 41,971,813
Expenses
Bonus scheme payment charge 6 - (372,556)
Administrative expenses 5 (772,317) (802,919)
Operating (loss)/ gain (72,815,246) 40,796,338
Currency exchange loss (185,967) (81,059)
(Loss)/Gain before taxation (73,001,213) 40,715,279
Taxation 7 - -
(Loss)/Gain attributable to equity shareholders (73,001,213) 40,715,279
Total comprehensive (loss)/income for the year (73,001,213) 40,715,279
(Loss)/Gain per share
Basic and diluted (loss)/gain per share (cents per share) 8 (232.11) 139.50
Statement of Financial Position
At 30 June At 31 December
2022 2021
USD USD
Unaudited Audited
Notes
Non-current assets
Financial assets at FVPL 9 200,560,955 265,454,136
Total non-current assets 200,560,955 265,454,136
Current assets
Trade and other receivables 10 1,745,642 2,050,649
Cash and cash equivalents 11 13,957,990 25,527,801
Total current assets 15,703,632 27,578,450
Total assets 216,264,587 293,032,586
Current liabilities
Trade and other payables 12 6,138,037 9,904,823
Total current liabilities 6,138,037 9,904,823
Total liabilities 6,138,037 9,904,823
Net assets 210,126,550 283,127,763
Equity
Share capital 13 53,283,415 53,283,415
Retained profit 156,843,135 229,844,348
Total equity 210,126,550 283,127,763
Statement of Cash Flows (unaudited)
For the six months ended 30/06/2022 For the six months ended 30/06/2021
Notes USD USD
Operating activities
Operating (loss)/gain (72,815,246) 40,796,338
Adjustments for non-cash items
Changes in fair value of financial assets at FVPL 3 72,176,280 (41,852,901)
Currency exchange loss (185,966) (81,059)
(824,932) (1,137,622)
Changes in working capital
Decrease/(Increase) in trade and other receivables 10 305,007 (291,387)
Decrease in trade and other payables 12 (3,766,786) (2,252,526)
Net cash used in operating activities (4,286,711) (3,681,535)
Investing activities
Interest received - -
Purchase of financial assets at FVPL 9 (7,283,100) (14,081,056)
Proceeds from sale of financial assets at FVPL 9 - 1,628,923
Net cash used in investing activities (7,283,100) (12,452,133)
Financing activities
Net cash from financing activities - -
Decrease in cash and cash equivalents (11,569,811) (16,133,668)
Cash and cash equivalents at the beginning of the period 11 25,527,801 39,004,288
Cash and cash equivalents at the end of the period 11 13,957,990 22,870,620
Statement of Changes in Equity (unaudited)
Share capital Retained profit Total
USD USD USD
Balance at 01 January 2021 34,790,174 143,132,533 177,922,707
Gain for the year - 86,711,815 86,711,815
Total comprehensive income for the year - 86,711,815 86,711,815
Transactions with owners in their capacity as owners:
Issue of shares 18,493,241 - 18,493,241
Balance at 31 December 2021 53,283,415 229,844,348 283,127,763
Loss for the period - (73,001,213) (73,001,213)
Total comprehensive (loss)/ income for the period - (73,001,213) (73,001,213)
Balance at 30 June 2022 53,283,415 156,843,135 210,126,550
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2022
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 10 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 2022 and 2021
are unaudited and were approved by the Directors on 15 August 2022. 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 2021 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 financial assets at
("FVTPL"), 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 30/06/2022 Average rate, for six months ended 30/06/2022
British pounds, £ 1.2143 1.2987
Euro, € 1.0452 1.0933
2.3 New IFRSs and interpretations
The following standards and amendments became effective from 1 January 2022,
but did not have any material impact on the Company:
• Amendments to IAS 16 "Property, Plant and Equipment"
• Amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent
Asserts"
• Amendments to IFRS 3 "Business Combination"
3 (Loss)/Gain on investments
For six months ended 30/06/2022 For six months
ended 30/06/2021
USD USD
Gross interest income from convertible notes receivable 19,780 18,844
Net interest income from convertible notes receivable 19,780 18,844
(Losses)/Gains on changes in fair value of financial assets at FVPL (72,176,280) 41,852,901
Other gains on investment (revaluation of receivables) 7,871 100,068
Total (loss)/gain on investments (72,148,629) 41,971,813
4 Segmental analysis
Geographic information
The Company has investments in six principal geographical areas - USA,
Estonia, the United Kingdom, British Virgin Islands ('BVI'), Cyprus, and The
Cayman Islands.
Non-current financial assets
As at 30/06/2022
USA Other BVI Cyprus Estonia United Kingdom The Cayman Islands Total
USD USD USD USD USD USD USD USD
Equity investments 66,399,723 500,000 1,780,250 330,000 77,382,608 25,656,362 - 172,048,943
Convertible notes & SAFEs 17,349,132 942,233 - 3,600,000 1,784,185 3,806,462 1,030,000 28,512,012
Total 83,748,855 1,442,233 1,780,250 3,930,000 79,166,793 29,462,824 1,030,000 200,560,955
As at 31/12/2021
USA Other BVI Cyprus Estonia United Kingdom Cayman Islands Total
USD USD USD USD USD USD USD USD
Equity investments 112,296,648 - 3,756,540 1,000,000 106,437,128 20,017,105 - 243,507,421
Convertible notes & SAFEs 14,620,030 - - 3,600,000 1,332,985 1,363,700 1,030,000 21,946,715
Total 126,916,678 - 3,756,540 4,600,000 107,770,113 21,380,805 1,030,000 265,454,136
5 Administrative expenses
Administrative expenses include the following amounts:
For six months ended 30/06/2022 For six months ended
30/06/2021
USD USD
Staff expenses (note 6) 414,602 395,818
Professional fees 188,923 228,715
Legal fees 60,092 83,048
Bank and LSE charges 6,746 8,034
Audit and accounting fees 25,522 17,851
Other expenses 76,432 69,453
772,317 802,919
6 Staff expenses
For six months ended 30/06/2022 For six months ended 30/06/2021
USD USD
Directors' fees 108,002 103,218
Wages and salaries 306,600 292,600
414,602 395,818
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 2022 and 2021 were as
follows:
For six months ended 30/06/2022 For six months ended
30/06/2021
USD USD
Alexander Selegenev 55,000 55,000
Yuri Mostovoy 27,500 27,500
James Joseph Mullins 14,171 15,218
Andrea Nastaj 1,984 -
Petr Lanin 9,347 5,500
108,002 103,218
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 2022 was 7 (six months ended 30 June 2021: 7).
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.
For six months ended 30/06/2022 For six months ended 30/06/2021
USD USD
Bonus scheme payment charge related to previous periods - 372,556
- 372,556
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 2022 to 30 June 2022
had been accrued during the period, it would have resulted in a bonus charge
of US$nil (2021: US$4,108,784).
7 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%.
8 (Loss)/Gain per share
The calculation of basic loss per share is based upon the net loss for the six
months ended 30 June 2022 attributable to the ordinary shareholders of
US$73,001,213 (for the six months ended 30 June 2021: net gain of
US$40,715,279) and the weighted average number of ordinary shares outstanding
calculated as follows:
(Loss)/Gain per share For the six months ended 30/06/2022 For six months ended 30/06/2021
Basic (loss)/gain per share (cents per share) (232.11) 139.50
(Loss)/Gain attributable to equity holders of the entity (73,001,213) 40,715,279
The weighted average number of ordinary shares outstanding was calculated as
follows:
For the six months ended 30/06/2022 For the six months ended 30/06/2021
Weighted average number of shares in issue
Ordinary shares 31,451,538 29,185,831
31,451,538 29,185,831
During the six months ended 30 June 2022 and 30 June 2021 there were no
dilutive instruments in issue.
9 Non-current financial assets
Reconciliation of fair value measurements of non-current financial assets:
At 30 June 2022 At 31 December 2021
USD USD
Investments held at fair value through profit and loss
- unlisted shares (i) 178,170,405 241,461,421
- promissory notes (ii) 3,354,215 4,266,715
- SAFEs (iii) 19,036,335 17,680,000
- Shares to be issued (iv) - 2,046,000
200,560,955 265,454,136
At 30 June 2022 At 31 December 2021
USD USD
Opening valuation 265,454,136 144,803,154
Purchased at cost 7,283,100 40,540,924
Disposal proceeds - (18,489,994)
Disposal due to full impairment (330,000) -
Realised gain - 6,294,635
Unrealised (losses)/gains (71,846,281) 92,305,417
Closing valuation 200,560,955 265,454,136
Movement in unrealised gains
Opening accumulated unrealised gains 195,706,888 111,980,464
Movement in unrealised (losses)/gains (71,846,281) 92,305,417
Transfer of previously unrealised losses/(gains) to realised reserve on 670,000 (8,578,993)
disposal of Investments
Closing accumulated unrealised gains 124,530,607 195,706,888
Reconciliation of investments, if held under the cost (less impairment) model:
Historic cost basis
Opening book cost 69,747,248 32,822,690
Purchases (including consulting and legal fees) 7,283,100 40,540,924
Disposal on sale of investment - (3,616,366)
Disposal due to impairment (1,000,000) -
Closing book cost 76,030,348 69,747,248
Valuation methodology
Mid-market price 19,553,338 63,146,440
Revenue multiple 80,912,234 6,590,954
Cost or price of recent equity funding round (reviewed for impairment and fair 100,095,383 195,716,742
value adjustment)
200,560,955 265,454,136
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. From time to time, 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 2022:
Investee company Date of initial investment Value at 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 2022, USD Equity stake owned
1 Jan 2022,
USD
Wanelo 21.11.2011 602,447 - - - - 602,447 4.69%
Backblaze 24.07.2012 63,146,440 - - (43,593,102) - 19,553,338 11.82%
Remote.it 13.06.2014 1,512,642 - - - 1,512,642 1.64%
Anews 25.08.2014 330,000 - - (330,000) - - 9.41%
Bolt 15.09.2014 103,375,800 - - (29,054,520) - 74,321,280 1.26%
PandaDoc 11.07.2014 16,185,773 - - - - 16,185,773 1.18%
FullContact 11.01.2018 244,506 - - - - 244,506 0.19%
ScentBird 13.04.2015 6,590,954 - - - - 6,590,954 4.18%
Workiz 16.05.2016 3,971,659 - - - - 3,971,659 1.89%
Usual (Vinebox) 06.05.2016 450,015 - - - - 450,015 1.91%
MEL Science 25.02.2019 2,663,696 - - - - 2,663,696 3.40%
Hugo 19.01.2019 3,756,540 - - (1,976,290) - 1,780,250 3.55%
Qumata (Healthy Health) 06.06.2019 1,818,822 - - - - 1,818,822 2.52%
eAgronom 31.08.2018 447,087 - - - - 447,087 1.41%
Rocket Games(Legionfarm) 16.09.2019 200,000 - - - - 200,000 1.26%
Timbeter 05.12.2019 221,688 - - - - 221,688 4.64%
Classtag 03.02.2020 200,000 - - - - 200,000 1.70%
3S Money Club 07.04.2020 8,253,630 - 2,046,000 - - 10,299,630 11.38%
Hinterview 21.09.2020 891,107 - - - - 891,107 4.97%
Virtual Mentor (Allright) 12.11.2020 772,500 - - - - 772,500 2.95%
NovaKid 13.11.2020 2,949,855 - - - - 2,949,855 1.55%
MTL Financial (OutFund) 17.11.2020 1,322,100 - - 1,478,052 - 2,800,152 3.66%
Scalarr 15.08.2019 1,378,282 - - - - 1,378,282 7.66%
Accern 21.08.2019 1,282,705 - - 1,591,179 - 2,873,884 3.21%
Feel 13.08.2020 2,035,512 314,275 1,363,700 92,975 - 3,806,462 11.30%
Affise 18.09.2019 3,470,870 - - - - 3,470,870 8.71%
3D Look 03.03.2021 1,000,000 - - - - 1,000,000 3.77%
FemTech 30.03.2021 274,220 - - 871,325 - 1,145,545 9.36%
Muncher 23.04.2021 2,059,999 - - - - 2,059,999 4.77%
Cyberwrite 20.05.2021 500,000 - - - - 500,000 3.71%
VertoFX 16.07.2021 1,132,999 - - - - 1,132,999 3.24%
Academy of Change 02.08.2021 1,000,000 - - (670,000) - 330,000 7.69%
EstateGuru 06.09.2021 1,780,200 - - - - 1,780,200 2.73%
Prodly 06.09.2021 1,800,000 - - - - 1,800,000 4.39%
Sonic Jobs 08.09.2021 712,018 - - - - 712,018 2.77%
EdVibe (Study Space, Inc) 02.11.2021 1,500,001 - - (750,001) - 750,000 7.36%
1Fit (Alippe, Inc) 24.12.2021 500,000 - - - - 500,000 4.70%
Laundry Heap 01.01.2022 - 1,325,392 - - - 1,325,392 2.44%
SOAX 21.01.2022 - 4,000,000 - - - 4,000,000 9.41%
Agendapro 15.04.2021 515,000 - - - - 515,000 2.00%
Outvio 22.06.2021 612,353 - - - - 612,353 4.00%
Total 241,461,421 5,639,667 - (72,340,382) - 178,170,405
(ii) Convertible loan notes as at 30 June 2022:
Investee company Date of initial investment Value at 1 Jan 2022, Additions to convertible note investments during the period, USD Conversions from loan notes, USD Gain/(loss) from changes in fair value of convertible notes, USD Disposals/ conversions, USD Value at 30 Jun 2022, USD Term, years Interest rate, %
USD
ShareThis 26.03.2013 570,030 - - - - 570,030 5.0 1.09%
Metrospeedy 16.07.2021 1,000,000 - - - - 1,000,000 - 0.00%
Feel 08.10.2021 1,363,700 - - - (1,363,700) - - -
Postoplan 18.12.2020 1,332,985 451,200 - - - 1,784,185 1.0 5.00%
Total 4,266,715 451,200 - - - 3,354,215
(iii) SAFEs as at 30 June 2022:
Investee company Date of initial investment Value at 1 Jan 2022, 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 2022, USD
USD
Adwisely (Retarget) 24.09.2019 1,600,000 - - - 1,600,000
Spin Technology 17.12.2018 300,000 - 664,102 - 964,102
Cheetah (Go-X) 29.07.2019 350,000 - - - 350,000
Rocket Games (Legionfarm) 17.09.2019 1,200,000 250,000 - - 1,450,000
Classtag 03.02.2020 200,000 - - - 200,000
Moeco 08.07.2020 500,000 - - - 500,000
Collectly 13.07.2021 2,060,000 - - - 2,060,000
StudyFree 08.12.2020 1,000,000 - (500,000) - 500,000
Aurabeat 03.05.2021 1,030,000 - - - 1,030,000
OneNotary (Adorum) 01.10.2021 500,000 - - - 500,000
BaFood 05.11.2021 2,000,000 - - - 2,000,000
Educate online 16.11.2021 1,000,000 - - - 1,000,000
My Device Inc 30.11.2021 850,000 - - - 850,000
Mobilo (Lulu Systems, Inc) 09.12.2021 1,030,000 - - - 1,030,000
Muncher 13.12.2021 2,000,000 - - - 2,000,000
Bairro (BAIRRÍSSIMO, LDA) 12.01.2022 - 942,233 - - 942,233
Synder (CloudBusiness Inc) 26.05.2021 2 060,000 - - - 2,060,000
Total 17,680,000 1,192,233 164,102 - 19,036,335
(iv) Shares to be issued as at 30 June 2022:
Investee company Date of initial investment Value at 1 Jan 2022, Additions to equity Conversions from loan notes, USD Gain/loss from changes in fair Disposals/ conversions, USD Value at 30 Jun 2022, USD
USD investments during value of equity investments, USD
the period, USD
3S Money Club 07.04.2020 2,046,000 - - - (2,046,000) -
Total 2,046,000 - - - - -
10 Trade and other receivables
At 30 June 2022 At 31 December 2021
USD USD
Prepayments 36,248 53,412
Other receivables 1,610,220 1,917,843
Interest receivable on promissory notes 99,174 79,394
1,745,642 2,050,649
The fair values of trade and other receivables approximate to their carrying
amounts as presented above. During the six months ended 30 June 2022 and 2021
no balances were past due or impaired, and no credit losses had been expected.
Other receivables include the amounts receivable from the disposal of TMT's
investments in DepositPhotos (US$1,262,484), Klear (US$227,658), and KitApps
(US$5,521), as well as the value (US$114,557 as of 30 June 2022) of the
publicly traded shares in 3D Systems Inc., received by TMT as partial
consideration for the disposal of its investment in Volumetric.
11 Cash and cash equivalents
The cash and cash equivalents as at 30 June 2022 include cash in banks. Cash
and cash equivalents comprise the following:
At 30 June 2022 At 31 December 2021
USD USD
Bank balances 13,957,990 25,527,801
13,957,990 25,527,801
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 2022 At 31 December 2021
USD USD
Bank balances
A3 rating 13,939,893 25,512,940
Baa3 rating 2,709 3,296
Not rated 15,388 11,565
13,957,990 25,527,801
12 Trade and other payables
At 30 June 2022 At 31 December 2021
USD USD
Salaries payable 140,752 82,500
Directors' fees payable - 40,534
Bonus payable 5,977,983 9,676,043
Trade payables 7,785 73,042
Other current liabilities 3,513 -
Other accrued expenses 8,004 32,704
6,138,037 9,904,823
The fair values of trade and other payables approximate to their carrying
amounts as presented above. The bonus payable amount as of 30 June 2022
relates to the bonuses earned in year 2021.
13 Share capital
On 30 June 2022 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 2022 At 31 December 2021
USD USD
Share capital 53,283,415 53,283,415
Issued capital comprises: Number Number
Fully paid ordinary shares 31,451,538 31,451,538
Number of shares Share capital, USD
Balance at 31 December 2021 31,451,538 53,283,415
Balance at 30 June 2022 31,451,538 53,283,415
There have been no changes to the Company's ordinary share capital between 30
June 2022 and the date of approval of these financial statements.
14 Related party transactions
The Company's Directors receive fees and bonuses from the Company, details of
which can be found in Note 6.
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. END IR UVSORURUWAURRecent news on TMT Investments
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