Draper Esprit plc Investor Presentation Interim Results 2020

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2

Contents

01. Summary & highlights

02. Market ecosystem

03. Portfolio update

04. Results for the period ended 30 Sept 2020

05. Outlook

06. Appendix

3

01. Summary & highlights for the period ended 30 Sept 2020

4

Summary & highlights

A long-term investment strategy delivering consistent returns in the private technology VC and Growth market

  • We have used the period to:
    • support our portfolio companies & further strengthen our high-quality portfolio
    • develop the model to support us to scale further
    • maintain strong discipline over valuations process and methodology
  • Despite the challenges of the pandemic, our investment machine continues to deliver, with a gross fair value movement in the period of £72.7 million
  • We achieved gross fair value growth of 10% in the period, we feel well placed to continue momentum throughout the rest of the year
  • We have set out a clear set of priorities for deploying further capital
  • We have a strong portfolio from which we will back the emerging winners, as well as invest in new deal flow, and continue to support our seed funds strategy and Earlybird partnership, via a planned investment in Earlybird Fund VII
  • With a stronger balance sheet after realisations and our fundraising, we can lead more deals and increase our average equity holdings over time

5

A differentiated model that can scale

Thousands

Secondary

Seed Fund

+ Cos raising

Market Access

of Funds

in Europe

Platform Team

Scaling the model

  • Additional commitment to Fund of funds
  • Acquisition of EIS and VCT

• Established Responsible Investment Policy (ESG)

Investment Process

We meet and closely track

thousands of companies per year

We invest in up to

15-30 new + follow on p.a

Build stakes and facilitate growth

Exit (IPO,

trade sale)

  • Deal origination
  • Deal execution
  • Marketing

Partnership Team

  • Seasoned team of deal makers
  • Entrepreneurs, founders, operators, investors

Capital

Seed

Series A Series B Series C

Pre-IPO & on

Fund of

Our Shareholders -

PLC

PLC

acting

Funds

independently

UK

EU

6

Interim results highlights for the period ended 30 Sept 2020

Financial Highlights

Net Assets

£715m

Robust performance drives growth in net asset value

600p NAV per share - 8% increase (H1)

Available cash

£62m as well as £39m from the EIS/VCT funds

Gross Portfolio Value

£702m post significant realisations

Gross Portfolio return of 10% in the period

£73m

Significant realisations

£106m Peak and TransferWise, escrows & partial disposals

Operational Highlights

Scaling the business

  • Invested £32m in the period into 2 new companies, Cazoo and Ravelin (& additional 2 via Earlybird) & 7 follow-ons (a further 2 via Earlybird)
  • Committed to 2 new seed funds bringing total commitments of ~£41m
  • Increased and extended our revolving credit facility with SVB and Investec by 1 year to £60m

Post period end activity

  • ~£110m capital raise
  • Strengthened partnership group & dealflow team
  • Over £18m deployed including our investment in PrimaryBid

7

02. Market ecosystem

8

Ecosystem activity

EU VC Deal Activity

€45.0B

10,000

€40.0B

9,000

€35.0B

8,000

7,000

€30.0B

6,000

€25.0B

5,000

€20.0B

4,000

€15.0B

3,000

€10.0B

2,000

€5.0B

1,000

€0.0B

-

2014

2015

2016

2017

2018

2019

2020 YTD

0-€1m

€1m-€4m

€4m-€15m

€15m-€40m

€40m-€100m

€100m-€250m

€250m+

No of Rounds

  • Value of deals has continued to increase, even as the number of deals has reduced, indicative of the importance of later stage investment
  • 2020 on track to a strong year, despite Covid-19

EU Primary and Follow-on VC Deals

€45.0B

€40.0B

€35.0B

€30.0B

€25.0B

€20.0B

€15.0B

€10.0B

€5.0B

€0.0B

2014

2015

2016

2017

2018

2019

2020

Primary VC

Follow -on VC

YTD

  • Follow-ondealflow continues its historic increases, indicating that:
    • VCs are continuing to follow their own investments
    • Later round investments are getting larger

Source: Dealroom. YTD as of 18/11/20.

9

Ecosystem activity

Deal share by series in Europe*

3500

3000

2500

2000

1500

1000

500

-

2014

2015

2016

2017

2018

2019

2020 YTD

€1m-€4m

€4m-€15m

€15m-€40m

€40m-€100m

€100m-€250m

€250m+

  • Later stage deals continue to grow, a demonstration of the importance of Draper Esprit's focus in this space

EU VC deal activity with US investor participation

€18.0B

1,000

€16.0B

900

€14.0B

800

700

€12.0B

600

€10.0B

500

€8.0B

400

€6.0B

300

€4.0B

200

€2.0B

100

€0.0B

-

2014

2015

2016

2017

2018

2019

2020 YTD

0-€1m

€1m-€4m

€4m-€15m

€15m-€40m

€40m-€100m

€100m-€250m

€250m+

No of Rounds

  • 2020 has seen a continuation and escalation of the trend for US VCs to invest in European tech. Both a sign of the continued maturation of European technology and an increase in competition within VC

Source: Dealroom. YTD as of 18/11/20. *Deals from 0-€1m value excluded.

10

03. Portfolio update

11

Gross portfolio value progression to March 2020

* New additions to the core

£81m

31st March 2020 Invested

*

*

Remaining

Gross Portfolio

Value

£81m

Fair Value Movement

£37m

£32m

£27m

£23m

£22m

£19m

£19m

£18m

£18m

£17m

£14m

£14m

£13m

£267m

£702m

12

Plc invested £32m in the period

Further £18m from EIS/ VCT funds

Agreed EarlyBird

Fund VII

April

May

June

July

August

September

October

Post period end

Deal Sourcing Strategy

Initial investments

Follow-on investments

Exits

Via Earlybird

All companies listed represent investments of over £1.0 million.

13

Significant fair value movements

£702m

Movement of £15.6m in the period

£81m

Gross

Portfolio

£702m

Movement

of £11.2m in

the period

£37m

Gross

Portfolio

Valuation key

LR: Valuation based on last round price

  1. Valuation based on a set of comparable listed peers

Value

C

Value

LR

31st March 2020

Invested

Fair Value Movement

  • The online global review site, has tracked over 100m reviews, of over 400,000 companies since it launched in 2007. With offices in Copenhagen, London, New York, Denver, Berlin, Melbourne and Vilnius, Trustpilot's 750 employees represent more than 40 different nationalities
  • In July, announced new initiatives to 'fight for trust online'. The initiatives, set to be implemented by the end of 2020, demonstrate Trustpilot's ongoing commitment to leading the reviews industry which remains useful for, and trusted by, both consumers and businesses
  • Announced new global R&D and Innovation Hub in Edinburgh, Scotland, to develop new, world-leading technology that proactively tackles the behaviour that threatens trust online
  • The Hub is supported through a £1.8 million R&D grant from Scottish Enterprise, bringing new investment into Scotland with the aim to create 30 new advanced data science jobs and a number of new local partnerships

£29.7m

£80.9m

2.7x

Invested

Investment Valuation

Cash / NAV

  • Uipath, the robotic process automation (RPA) software company raised a US$225.0m Series E Round led by Alkeon Capital Management. At over US$400.0m in ARR, UiPath is one of the fastest growing enterprise software companies worldwide
  • Created a Legal Automation Task Force and launched a virtual streaming solution that allows customers, prospects, and partners to explore enterprise automation solution showcases, attend demos and participate in workshops as part of a fully remote UiPath Immersion Lab experience
  • Enhanced its Business Partner Program to enable organizations to leverage the power of hyper automation, offering training, certification, and marketing programs for business partners through the launch of its UiPath Services Network (USN)
  • Renzo Taal has joined the Company as Senior Vice President and Managing Director of EMEA

£10.3m

£36.7m

3.5x

Invested

Investment Valuation

Cash / NAV

14

Significant fair value movements

£702m

Movement of £7.0m in the period

£27m

Gross

Portfolio

C

Value

  • Intelligent information management platform, M-Files, organises customers' content with the ability to connect to existing network folders and systems to enhance them with the help of AI to categorise and protect information
  • Named 2020 Top Rated Enterprise Content Management ("ECM") Software by End-Users on TrustRadius - receiving one of the highest overall rankings, including top scores for product scalability, and likelihood to renew
  • Named a "Leader" in the 2020 Nucleus Research Content Manager Value Matrix Report (7th year)
  • Expanded its strategic international partnerships with Iron Mountain, Fulton Hogan, Devoteam Management Consulting Denmark, and Fuji Xerox Asia Pacific Pte LTD
  • Received SOC 3 accreditation, certifying it is in compliance with the Trust Services Criteria of security, availability and confidentiality developed by the American Institute of CPAs (AICPA)

£5.0m

£27.0m

5.3x

Invested

Investment Valuation

Cash / NAV

New to the portfolio & the core

LR

  • Cazoo is one the UK's fastest-growing digital businesses and leading online car retailers, allowing customers to research and purchase cars online
  • Launched in 2018 by founder Alex Chesterman (founder of LoveFilm and Zoopla)
  • 6 locations across the UK with 3 more opening shortly
  • Draper Esprit initially invested in Cazoo as part of our fund of funds investment programme via Stride Capital who backed Cazoo in November 2018
  • In June 2020, Plc invested directly in the company's £25.0 million Series C round, and then participated in their latest £240.0 million Series D round in October 2020 - Other investors in the Series D round include General Catalyst, D1 Capital Partners, and Blackrock, amongst others
  • Team of over 700 employees and growing, appointed Fern Wake as COO and Stephen Morana as CFO in June 2020

£10.0m

£17.5m

1.7x

Invested

Investment Valuation

Cash / NAV

Valuation key

LR: Valuation based on last round price

  1. Valuation based on a set of comparable listed peers

31st March 2020

Invested

Fair Value Movement

15

Our fund of funds

£3m ~£41m

Seed fund

Total

investments

Commitments

in the period

over 5-10 years

£17m drawn to

date

+350£45k

Portfolio

Companies

Across all

funds

Average

investment per seed companies so far

Average equity stake of 0.5%

16

04. Interim results for the period ended 30 Sept 2020

17

Gross portfolio value progression

NAV progression

£800M

£700M

£600M

£500M

£400M

£300M

£200M

£100M

£M

£800M

£703M

£32m

£106m

£73m

£702M

£715M

£683M

£700M

£677M

£660M

£618M

£594M

£600M

£500M

600 pence

574 pence

£400M

555 pence

524 pence

£300M

£300M

£200M

416 pence

£140M

£100M

343 pence

£M

FY19

H120

FY20

Invested

Realised

Fair Value

H121

FY17

FY18

FY19

HY20

FY20

H121

Movement

Total

Increase

Decrease

18

Cash realisations

Realisations of £106 million in the period

Profit after tax and return on gross portfolio

£120m

200%

£111m

180%

£100m

160%

£80m

140%

120%

£60m

£61m

100%

£54m

£40m

80%

£40m

60%

£29m

40%

30%

40%

£20m

43%

9%

10%

20%

-

0%

FY17

FY18

FY19

FY20

H121

Profit after tax

Return on Gross Portfolio

Cash realisations as % opening portfolio

100%

90%

£106m

80%

70%

60%

50%52%

40%

£40m

30% £35m

20%

15%

£15m 14%

£16m

7%

10%

7%

0%

FY17

FY18

FY19

FY20

H121

Cash Realised

% cash return on opening portfolio

19

05. Outlook

20

Looking forward to H2

  • Our unique model positions us well to realise value for shareholders even in highly uncertain times from the fast growth in European private technology businesses
  • We will continue to invest in our model and infrastructure allowing us to scale while maintaining the discipline for which we have become known
  • We believe there is significant opportunity to deploy further capital driven by a growing European venture capital market, and an accelerated transition to digital driven by the COVID- 19 pandemic. However, we remain mindful of market uncertainty and increased pressures on the global economy resulting from the ongoing pandemic
  • We continue to explore ways to scale the co-investment model, which provides improved access to the best deals and third-party funds, as well as being a source of management fees
  • We remain passionate about democratising entrepreneurship and fuelling jobs across the UK and Europe

21

Thank you

For further information:

Martin Davis, Chief Executive Officer martin.davis@draperesprit.com

Ben Wilkinson, Chief Financial Officer ben.wilkinson@draperesprit.com

Stuart Chapman, Director

Stuart.chapman@draperesprit.com

@draperesprit

22

06. Appendix

23

Gross portfolio value table

Draper Esprit

Fair Value of

Interest

Fair Value of Investments

(Ireland)

Movement in

Investments

FD category*

31 Mar 2020

Investments

Realisations

Limited

Fair Value

31 Sep 2020

at reporting

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

date

Investments

Trustpilot

65.3

-

-

-

15.6

80.9

C

Graphcore

86.8

-

-

-

(6.3)

80.5

A

UiPath

28.0

-

(2.5)

-

11.2

36.7

A

Ravenpack

30.9

-

-

-

1.0

31.9

D

M-Files

20.0

-

-

-

7.0

27.0

B

Aircall

24.3

1.0

-

-

(2.0)

23.3

B

Revolut

21.9

-

-

-

-

21.9

A

Smava

16.7

-

-

-

2.0

18.7

B

Perbox

19.9

-

-

-

(1.3)

18.6

C

Ledger

17.7

-

-

-

-

17.7

B

Cazoo

-

10.0

-

-

7.5

17.5

A

ThoughtMachine

17.4

-

-

-

-

17.4

B

SportPursuit

11.1

-

-

-

3.2

14.3

E

ICEYE

14.0

-

-

-

-

14.0

A

Aiven

12.8

-

-

-

-

12.8

B

Remaining portfolio

314.4

21.3

(103.1)

-

34.4

267.0

-

Total

701.1

32.3

(105.6)

-

72.3

700.2

Co-Invest assigned to plc

1.8

-

-

-

0.4

2.2

Gross Portfolio Value

702.9

32.3

(105.6)

-

72.7

702.4

Carry external

(40.6)

-

-

-

(10.8)

(51.4)

Portfolio deferred tax

(5.3)

-

-

-

(1.3)

(6.6)

Trading carry & co-invest

0.3

-

-

-

0.1

0.4

Draper Esprit (Ireland) Limited

0.0

-

-

4.3

(4.3)

0.0

Net portfolio value

657.3

32.3

(105.6)

4.3

56.4

644.8

*Fully diluted interest categorized as follows: Cat A: 0-5%, Cat B: 6-10%, Cat C: 11-15, Cat D: 16-25%, Cat E: >25%

24

Consolidated statement of comprehensive income ended 30 Sept 2020

Unaudited Period Ended

Unaudited Period Ended

Audited Year ended

30 Sep 2020

30 Sep 2019

31 Mar 2020

Notes

£'000s

£'000s

£'000s

Change in unrealised gains on investments held at fair value through the profit and loss

10

56,416

57,646

40,755

Fee income

6,053

5,480

11,255

Total investment income

62,469

63,126

52,010

Operating expenses

General administrative expenses

(6,611)

(5,005)

(9,810)

Depreciation and amortisation

(310)

(219)

(520)

Share based payments - resulting from company share option scheme

(283)

(442)

(990)

Investments and acquisition costs

(121)

(45)

(239)

Total operating costs

(7,325)

(5,711)

(11,559)

Profit from operations

55,144

57,415

40,451

Finance (expense)/income

Net finance (expense)/income

6

(1,543)

1,288

(68)

Operating profit before tax

53,610

58,703

40,383

Income taxes

13

199

-

(17)

Profit for the year

53,809

58,703

40,366

Other comprehensive income/(expense)

-

-

-

Total comprehensive income for the year

53,809

58,703

40,366

Profit attributable to:

Owners of the parent

53,809

58,307

39,707

Non-controlling interest^

-

396

659

Earnings per share attributable to owners of the Parent:

Basic earnings per weighted average shares (pence)

7

45

49

34

Diluted earnings per weighted average shares (pence)

7

45

47

33

^ On 10 March 2020, the Group acquired the remaining interest in Encore Ventures LLP and as such no profit after 10 March 2020 is attributable to the non-controlling interest - see Note 18 for further details in the Annual Report.

25

Financial position as of 30 Sept 2020

Unaudited

Unaudited

Audited

31 March 2020

31 Sep 2019

31 Mar 2020

Notes

£'000s

£'000s

£'000s

Non-current assets

Intangible assets

8

9,977

10,079

10,028

Investments in associates

9

258

258

258

Financial assets held at fair value through the profit or loss

10

644,809

638,452

657,333

Property, plant and equipment

1,596

1,823

1,760

Total non-current assets

656,640

650,612

669,379

Current assets

Trade and other receivables

3,734

8,357

7,719

Cash and cash equivalents

59,870

43,654

32,255

Restricted cash

12

2,255

1,878

1,883

Total current assets

65,859

53,889

41,857

Current liabilities

Trade and other payables

(6,708)

(5,361)

(5,038)

Lease liabilities

16

(372)

(310)

(358)

Total current liabilities

(7,080)

(5,671)

(5,396)

Non-current liabilities

Deferred tax

13

(412)

(621)

(611)

Loans and borrowings

12

536

(19,538)

(44,636)

Lease liabilities

16

(805)

(1,176)

(975)

Total non-current liabilities

(681)

(21,335)

(46,222)

Net assets

714,738

677,495

659,618

Equity

Share capital

14

1,192

1,179

1,189

Share premium account

14

401,752

395,747

400,726

Merger relief reserve

13,097

13,097

13,097

Share-based payments reserve - resulting from company share option scheme

15

2,621

2,155

2,339

Share-based payments reserve - resulting from acquisition of subsidiary

15

10,823

10,823

10,823

Retained earnings

285,253

254,044

231,444

Equity attributes to owners of parent

714,738

677,045

659,618

Non-controlling interests

-

450

-

Total equity

714,738

677,495

659,618

Net assets per share (pence)

7

600

574

555

26

Our Portfolio

67

Total

We invest across four sectors in high growth European technology companies*

Portfolio

Companies

Consumer technology

Enterprise technology

Hardware & Deeptech

New consumer-facing products,

The software infrastructure, applications

The deeper technologies that will spark

innovative business models, and proven

and services that make enterprises more

advances in computing, consumer

execution capabilities that bring

productive, cost-efficient, and smoother

electronics and other industries.

exceptional capabilities enabled by

to run.

technology.

23

26%

34%

25

37%

37%

12

31%

18%

7

Total

Split by NAV

Split by

Total

Split by NAV

Split by

Total

Split by NAV

Split by

Total

Companies

number of

Companies

number of

Companies

number of

Companies

in sector

companies

in sector

companies

in sector

companies

in sector

b2x

Getbulb

Core Portfolio Companies

Emerging Companies

*Reporting threshold - companies with a NAV of £1.0 million or more

Digital Health & Wellness

Using digital and genomic technologies to create new products and services for the health and wellness market.

6%

10%

Split by NAV

Split by

number of

companies

27

Key portfolio companies underpin NAV growth

Valuation key

LR: Valuation based on last round price

C: Valuation based on a set of comparable listed peers

C

  • Membership-basedeCommerce business uses data to inspire consumers to purchase products from sports and outdoor brands at unbeatable prices in a premium, content-rich, personalised environment
  • Sales are focused on outdoor, running, snowsports, triathlon, cycling, and health & wellbeing and works with over 1,000 top sport and outdoor brands. The business has also built a portfolio of high-quality, owned brands
  • Data is used to recruit new customers to deliver 1-2-1 personalised content to their audience
  • The proprietary technology platform uses sophisticated algorithms and AI to target customers, delivering market leading retention rates and CLTV / CAC
  • SportPursuit continues their partnership with Size of Wales which works with the Welsh Government, partners in Uganda, and experts in Wales to deliver tree planting programs in Uganda and Kenya. In the last year, SportPursuit have funded the planting of 100,000 trees.

C

  • Online lending platform, Smava, provides easy access to the best conditions for consumer loans from more than 25 banks
  • Largest specialised loan marketplace in Germany, providing access to over €3.0 billion a year in loans
  • In May, the company secured €57.0m in financing with debt from Kreos Capital, along with equity from existing investors Earlybird, Verdane, Vitruvian Partners and Runa Capital
  • The platform offers an overview of 70 loans between €1,000 and €120,000 from over 20 banks and lending partners allowing consumers select the loan that suits them and take it out directly
  • On average, Smava borrowers pay about 35% less interest than the German national average
  • Announced a new partnership with Commerzbank

LR

  • Leading big data analytics provider for financial services, Ravenpack, products allow clients to enhance returns, reduce risk and increase efficiency by systematically incorporating the effects of public information in their models or workflows Clients include some of the most successful global hedge funds, banks, and asset managers
  • Oct. 2019 the business raised a Series B Round of US$10.0m from the technology advisory and investment firm GP Bullhound. The funds are being used to expand to Asia, establishing an office in Sydney and to diversifying their product offering to better serve corporate customers
  • Ravenpack has announced partnerships with both Wall Street Horizon, a leading provider of market-moving corporate event data, and Cosaic, a leader in the field of interactive visualization tools
  • Launched an Insider Transactions Data Solution and a free 2020 US Election Media Monitoring Insights and free Coronavirus monitoring insights

£5.6m £14.3m 2.5x

£14.5m £18.7m 1.3x

Invested

Investment Valuation Cash / NAV

Invested

Investment Valuation Cash / NAV

£7.5m

£31.9m 4.3x

Invested

Investment Valuation Cash / NAV

28

Key portfolio companies underpin NAV growth

LR

  • Sep. 2020 fintech company, Revolut, celebrated 3 years of business and 500k business customers since its launch in 2017. currently boasts 12 m+ personal customers, is supported in 35 countries and has 30+ in-app currencies
  • Feb 2020, Revolut raised a US$500.0m Series D round led by TCV, which was subsequently topped up in July by a further US$80.0m by TSG Consumer Partners. Funding enabled the company to build new products, grow into new markets, enhance its existing product suite for users, and further develop operational infrastructure
  • Launched Revolut Jr. for under 17s to help teach financial literacy and money management to children and delivered several accounting software integrations on Revolut Business
  • Business perks now include Indeed, Zipcar, Advertio, PayFit UK, and Covve Scan
  • Introduced SEPA Instant Euro Transfer on Revolut Business, and launched in Australia and Japan

LR

  • The commercial radar imaging satellite company, provides imaging services, designed to deliver frequent coverage, 24/7, to help clients resolve challenges in sectors such as maritime, disaster management, insurance, and finance
  • Raised a US$87.0m Series C with participation from return investors True Ventures, OTB Ventures, Finnish Industry Investment (Tesi), Draper Esprit, DNX Ventures, Draper Associates, Seraphim Capital, Promus Ventures and Space Angels, New Space Capital and Luxembourg Future Fund
  • Successfully launched 5 satellite missions, starting with the first ever small SAR satellite launched in January 2018 - ICEYE plans to launch 4 more SAR satellites this year with at least an additional 8 in 2021
  • Provides radar imaging data from its commercial synthetic- aperture radar (SAR) satellite constellation to the International Charter: Space and Major Disasters for use in monitoring and response activities

C

  • The cryptocurrency and blockchain hardware security wallet successfully launched the Nano X product and Ledger live companion software
  • The Nano X received CSPN (First Level Security Certificate) certification issued by the National Agency for Information Systems Security (ANSSI)
  • Committed to furthering its pursuit of partnerships like the ones with Engie, and Nomura
  • Launched new capability allowing for crypto assets to be secured, bought, managed, and exchanged directly through Ledger Live via its partner Changelly
  • announced support for Algorand (ALGO) and Algorand Standard Assets (ASA) in its software application, Ledger Live, bringing the total amount of supported coins to 27 and more than 1500 tokens
  • The company now has 200 global employees working in its Paris, New York, Hong Kong, and Vierzon bases and 1 m users in over 165 countries with 1.5 m units sold

£7.4m £21.9m 2.9x

£7.5m

£14.0m

1.9x

£17.7m £17.7m 1.0x

Invested

Investment Valuation Cash / NAV

Invested

Investment Valuation

Cash / NAV

Invested

Investment Valuation Cash / NAV

29

Key portfolio companies underpin NAV growth

LR

  • Aiven, the data infrastructure management platform, allows developers to focus on application building while the platform manages open-source databases and messaging systems for business clients on all major cloud platforms
  • Operates with 8 open-source products, 6 Cloud platforms, and covers 87 regions with headquarters in Boston, Berlin, Sydney, and Helsinki
  • Released Kafka MirrorMaker 2 as a stand-alone service, enabling enterprises to access the Apache Kafka ecosystem more easily
  • Announced in July - the launch of Karapace, an open-source tool that serves as a drop-in replacement for Confluent's Kafka REST and Schema Registry
  • In the period hired; VP of marketing and VP of sales EMEA to fuel Aiven's global expansion

LR

  • Offers cloud native core banking infrastructure to both incumbent and challenger banks
  • Completed an US$83.0m round led by Draper Esprit and joined by Lloyds Banking Group, IQ Capital, Backed and Playfair Capital. In July 2020 extended the Series B round to US$125.0m - the US$42.0m extension was led by Eurazeo. British Patient Capital and SEB joined the round as new investors
  • Former HSBC Group COO Andy Maguire joined as new Chairman in Sept 2020
  • The Vault now runs on every major cloud infrastructure provider including Google Cloud Platform, Amazon Web Services, Microsoft Azure and IBM Cloud and can be deployed on either the bank's choice of cloud provider, on premise, in a hybrid cloud using Red Hat OpenShift, or as a SaaS product
  • Monese and Curve announced they will be adopting Thought Machine's platform

C

  • Perkbox is an employee wellbeing platform that provides a unique employee experience, enriching the personal and working life of employees. It offers a suite of products including a platform with access to best-in-class Perks, Recognition, Insights and Medical
  • In the period, secured new partnerships with Action Aid, Dakota Hotel, Igloo Energy, and Landmark, while existing partners Gymshark and Krispy Kreme have enhanced their benefits

£5.0m £12.8m 2.6x

£16.5m £17.4m 1.1x

£14.0m £18.6m

1.3x

Invested

Investment Valuation Cash / NAV

Invested

Investment Valuation Cash / NAV

Invested

Investment Valuation

Cash / NAV

30

Key portfolio companies underpin NAV growth

LR

  • Aircall is a cloud-based call centre system, with offices in Paris and New York
  • More than 300 employees, is available in over 80+ countries, with 60,000 users world-wide
  • May 2020 Aircall raised US$65.0m in Series C funding, led by DTCP with participation from new investors Swisscom and Adam Street - Existing investors including Draper Esprit, eFounders, Balderton Capital and NextWorld participated in the round
  • This most recent round brings the company's total funding to date to over US$100.0m and will be used to expand with more developers, a bigger sales team, and a new office
    in Australia
  • New customers include food delivery startup Door Dash Inc.
  • Adding features to improve sales and service, such as features that analyse the emotion in customers voices

LR

  • Graphcore, the machine intelligence semi-conductor company, develops IPUs (Intelligent Processing Units) which enable unprecedented levels of compute
  • In July 2020 the IPU developer launched a new chip, the GC200, and a new IPU Machine that runs on it, the M2000, which Graphcore says is the first AI computer to achieve a petaflop of processing power "in the size of a pizza box"
  • Post period-end Graphcore released new polar SDK 1.3, which includes new optimisations and improvements to help developers run their models faster and more efficiently
  • With offices in Bristol, London, Cambridge, Palo Alto, Oslo, Beijing, Hsinchu, Seoul, New York, Seattle, and Austin, the global company continues to scale in size, increasing to 450+ employees from its previously reported +200 employees

£10.7m £23.3m 2.2x

£13.7m

£80.5m

5.9x

Invested

Investment Valuation

Cash / NAV

Invested

Investment Valuation

Cash / NAV

31

Meet the team

The partners are supported by our internal

support teams; one team is our research,

deal execution and marketing group and

the other our finance, funding and

operations group.

Martin Davis -

Stuart Chapman -

Ben Wilkinson -

Simon Cook -

Will Turner -

Richard Marsh -

Managing Partner

CEO

Director

CFO

Founding Partner

Senior Partner

Growth

The team of

partners and our

portfolio

companies are

also supported

by the global

Draper Venture

Network,

headquartered in

Silicon Valley but

Jonathan Sibilia -

Nicola McClafferty -

Vinoth Jayakumar -

Christoph Hornung -

Inga Deakin -

Philip O'Reilly -

Edel Coen -

with partners

Partner, Secondaries &

across the globe,

Partner

Partner

Investment Director

Head of Deal Execution

Head of Dealflow

Fund of Funds

Principal

with additional

business development resources available to any partner or portfolio company in many regions.

David Cummings -

Brian Caulfield -

Vishal Gulati -

Alan Duncan -

Bindi Karia -

George Chalmers -

James Clark -

Venture Partner

Venture Partner

Venture Partner

Venture Partner

Venture Partner

Associate

Marketing Director

32

Focused on long-term winners in technology

Whilst we make numerous earlier stage investments to capture upside, we focus our capital on a small number of core holdings, as well as advantageous secondary opportunities.

Profile of core portfolio companies (on average)

  • ~60%+ Gross Margin
  • £28.9m Average Holding Value
  • 9.0% Average Stake

Average revenues - Core Portfolio

$300m

$240m

$250m

$200m

105%

$150m

$117m

$100m

62%

$72m

$50m $0m

FY19A

FY20B

FY21B

Core Holdings (15 companies) represent

56% of NAV and over 60% of Gross

Portfolio Value*

-

~35%

Emerging

Companies

~56%

Core

Holdings

*Core companies are those with a Fair Value of over £12m

33

Track Record

2020

2019

2018

2017

2016

8.3x

7.3x

7.6x

4.5x

3.5x

3.1x

2.6x

2.3x

2.1x

2.2x

2.0x

1.7x

1.9x

1.9x

1.6x

0.4x

0.1x

0.0x

  • Historical track record of over 20% IRR prior to IPO***
  • Over 125+ deals since 2006
  • Over $13.0bn value of exits since 2010

*** Aggregate portfolio return since 2010 of

^ Peak Games includes escrow amounts duethe Company *UiPath, and Codility represent partial disposals and Draper Esprit continue to hold stakes in these companies

34

Track Record

Nav progression for deals >£2m

8.0x

8.3x

8.3x

7.6x

7.6x

7.3x

7.1x

4.5x

4.5x

Peak Games (£88.0m)

4.3x

UiPath (£7.1m)

Transferwise (£32.6m)

4.0x

3.5x

3.5x

Grapeshot (£11.5m)

Podpoint (£12.4m)

3.1x

2.7x

2.7x

3.1x

Clavis Insight (£15.3m)

2.6x

2.6x

2.7x

Graze (£6.3m)

2.7x

Tails.com (£2.9m)

2.4x

2.1x

2.4x

2.3x

2.3x

Horizon (£2.9m)

2.1x

2.1x

Movidius (£27.5m)

2.0x

1.8x

2.1x

1.7x

1.9x

1.9x

1.8x

Qosmos (£8.0m)

Datahug (£3.6m)

1.6x

1.7x

1.7x

Stripe (£1.7m)

1.5x

1.5x

1.5x

1.5x

1.3x

1.3x

1.3x

1.3x

1.2x

1.0x

JUN-16

SEPT-16

MAR-17

SEP-17

MAR-18

SEP-18

MAR-19

SEP-19

MAR-20

SEP-20

35

Partnership with Earlybird

Expanding our presence in the European market

£115.7m

£152.6m

Total invested

Valuation of

in EB

EB

  • Continue to co-invest alongside the team at Earlybird. We have joint deal teams which focus on specific industries, sharing insight and best practice

£25.4m 3.5x

Invested Cash/NAV

  • In Jan 2019, Draper Esprit furthered its strategic partnership with Earlybird, acquiring a 27% interest in Earlybird's EB IV fund for approx. £55m (including holdings in Peak).
  • In May 2020, post period end Zynga entered into agreement to acquire Peak for US$1.8bn. The acquisition is expected to close in Q3 2020.
  • The agreement indicates a fair value holding for Draper Esprit in Peak of approx. £88 million (depending upon the Zynga share price at the time), approx. £20 million (approx. 10p NAV per share) uplift to the fair value referenced in the 31st March 2020 results.

Acquisition of stakes

Co-investments via EB VI & Growth Opportunities

in Earlybird IV and

Digital East I

Primary investments

Secondary investments

36

Our ESG Ambition

Our ESG ambitions are an ongoing and evolving process that we are committed to build and develop over time. Meaningful steps have been taken in this period across multiple areas within our business.

Our mission is to empower Europe to invent the future. We want that future to be sustainable, fair and accessible to all. We aim to use our platform in VC to encourage and promote our values and ESG considerations in developing best-in class technology companies and achieving strong returns for our investors

  • UN Sustainable Development Goals
    • Mapping the Portfolio:
      • Accomplished mapping exercise - working group to mapped out portfolio against UNPRI Sustainability Goals
      • As a fundamental part of the 2030 Agenda for Sustainable Development (adopted by all United Nations Member States in 2015), 17 overarching sustainable development goals ("SDGs") were developed, which the UN deem to be a "blueprint to achieve a better and more sustainable future for all"
      • Berenberg Report : The report came back favorably stating of the Draper Esprit portfolio, 35 firms or 57% of our NAV, meet the criteria of Berenberg's BSDGs framework (with anything above 45% being considered high) and a recommendation to investors to consider Draper Esprit for their ESG portfolio's
  • ESG Working Group
    • Dedicated ESG work group to establishing and working through board approved KPIs
    • Next step is team training
  • Continued focus at Board level
    • Responsible investment policy established and agreed
    • Bi-monthlyESG communication
    • Looking to see how we can bring portfolio companies board's attention to ESG

37

Draper Esprit Group Responsible Investment & Sustainability Policy

Target ESG Standards

Our aim is to invest in businesses and entrepreneurs who are committed to changing the world in a positive way by embodying the following sustainable practices and standards in their business activities:

  1. Emphasis on sustainability and the protection of the natural environment (including in the supply chain) with a commitment to the material reduction and balancing of company-related carbon emissions.
  2. Encouraging diversity and inclusion at all levels of the business including at a management level, through policy and direct action, and enforcing a zero tolerance against any type of discrimination.
  3. Ensuring that all people involved in the operations of the business, including in the broader supply chain, are treated fairly, with dignity, and with access to safe conditions that encourage healthy working.
  4. Entrenching robust structures of corporate governance with identified responsibilities and procedures that are proportionate to the scale of the business and aligned with a leadership culture that is grounded in effective risk management and accountability.
  5. Acting with integrity and strong business ethics evidenced through positive engagement with stakeholders in line with all applicable local and international laws, regulations and sector / territory specific standards.
  6. Positively addressing customer / client interests, including concerns around privacy, inclusion, health and safety, and marketing.
  7. Commitment to the inclusion of a strategic sustainability board agenda item that is discussed at least annually.
  8. Encouraging transparency and a commitment to monitoring and financial / nonfinancial reporting upon ESG progress within the business.

38

How we help companies grow

Long term investment

With a plc balance sheet, we can take a longer view, enabling us to back companies from scale up to IPO.

Global networks

As a global network, the Draper Venture Network enables our portfolio to access markets as they shift.

We have partners in Asia, the US, and the Middle East. For both commercial connections and future funding, our portfolio is well supported to internationalise.

Hands on support

When we invest, we offer more than money. We take a seat on the board of the company, to offer support as the company grows.

We also run events and offer specific training for portfolio companies.

39

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Draper Esprit plc published this content on 30 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2020 09:42:00 UTC