Draper Esprit plc
Investor Presentation
FY March 2020 - Final Results
3
Disclaimer
This document has been prepared by Draper Esprit plc ("Draper Esprit”, the "Company“, or the “Group”) and is
for general information purposes only. The information provided in this document pertaining to Draper Esprit, its
broader group and portfolio companies, and the business assets, strategy and operations related thereto, does
not, and is not intended to, constitute or form part of any offer for sale or subscription or any solicitation for any
offer to purchase or subscribe for any securities, options, futures, or other derivatives related to securities nor shall
it or any part of it form the basis of or be relied upon in connection with any contract or commitment whatsoever
relating to the Company or any part of, or affiliate to, the Company’s broader group.
The contents of this document are not prescribed by securities laws and are only intended to be communicated or
distributed within the UK and Ireland to persons to whom they may lawfully be communicated. In particular, note
that this document and has not been approved for the purposes of section 21 of the UK Financial Services and
Markets Act 2000. This document is for distribution to persons that qualify as professional clients or eligible
counterparties under the rules of the UK’s Financial Conduct Authority and in Ireland to qualified investors (as
defined in regulation 2(1) of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland (as amended)), or
as such term or equivalent term is understood in the jurisdiction in which this document is received.
Information contained in this document should not be relied upon as advice to buy or sell or hold such securities or
as an offer to sell such securities, and is in any event not intended for the use of nor should be relied upon by any
person who would qualify as a retail client. This document does not take into account nor does it provide any tax,
legal or investment advice or opinion regarding the specific investment objectives or financial situation of any
person. This document and the information contained in this document must not be copied, reproduced or
published in whole or in part for any purpose to any other person without the prior written consent of Draper
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themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute
a violation of the laws of the relevant jurisdiction, and Draper Esprit accepts no liability whatsoever for any such
violations.
The information contained in this document is given at the date of its publication and is subject to updating,
revision and amendment. Whilst the Company reasonably believes that the facts stated in this document are
accurate and that any forecasts, opinions and expectations contained therein are fair and reasonable, no
redocument or warranty, express or implied, is made to the fairness, accuracy, completeness or correctness of
these materials or opinions contained therein and each recipient of this document must make its own
investigation and assessment of the matters contained therein. In particular, but without prejudice to the
generality of the foregoing, no redocument or warranty is given, and no responsibility or liability is accepted by us
of our representatives to any person, as to the accuracy of the information set out in this document; the
achievement or reasonableness of any future projections or the assumptions underlying them; any forecasts,
estimates, or statements as to prospects contained or referred to; or for omissions from the information in this
document.
This document may contain forward-looking statements that reflect Draper Esprit's current expectations
regarding future events, its liquidity and its subsidiary undertakings and the results of its operations, as well as its
working capital requirements and future capital raising activities. Forward-looking statements and financial
projections are based on the opinions and estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to
differ materially from those anticipated in the forward-looking statements and financial projections. Although we
believe that the expectations reflected in the forward-looking statements and financial projections are
reasonable, forward-looking statements involve substantial risks and uncertainties and there can be no assurance
that such expectations will prove to be correct. We cannot guarantee future results, level of activity, performance
or achievements and no representation is made by Draper Esprit that the actual results achieved will be the same,
in whole or in part, as those set out in the forward-looking statements and financial projections.
By their nature, forward-looking statements and financial projections involve numerous assumptions, known and
unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking information will not occur, which may cause the Company's
actual performance and financial results in future periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such forward-looking statements and financial projections.
Important factors that could cause actual results to differ materially from expectations include, but are not
limited to: business, economic, global health and capital market conditions; the heavily regulated industry in
which the Company carries on business; current or future laws or regulations and new interpretations of existing
laws or regulations; legal and regulatory requirements; market conditions and the demand and pricing for our
products; our relationships with our customers, developers and business partners; our ability to successfully
define, design and release new products in a timely manner that meet our customers' needs; our ability to attract,
retain and motivate qualified personnel; competition in our industry; competition; technology failures; failure of
counterparties to perform their contractual obligations; systems, networks, telecommunications or service
disruptions or failures or cyber-attack; macro-economic factors associated with trends in global or local
economies; pandemic or other widespread disease or crisis event; ability to obtain additional financing on
reasonable terms or at all; litigation costs and outcomes; our ability to successfully maintain and enforce our
intellectual property rights and defend third party claims of infringement of their intellectual property rights; our
ability to manage foreign exchange risk and working capital; and our ability to manage our growth. This list of
factors should not be construed as exhaustive. The forward-looking statements and financial projections
contained in this document are expressly qualified by this notice and we strongly advise against undue reliance on
forward-looking statements or financial projections.
Information regarding several companies in which Draper Esprit (or funds controlled by Draper Esprit) hold shares
("Investee Companies") is included in this document and has not been independently verified. Draper Esprit is a
minority investor in these Investee Companies and cannot access all the information necessary to verify such
information. Draper Esprit does not have any liability whatsoever in relation to such information. No responsibility
or liability whatsoever is accepted by any person for any loss howsoever arising from any use of, or in connection
with, this document or its contents or otherwise arising in connection therewith. In publishing this document,
except as required by law, Draper Esprit undertakes no obligation to update or to correct any inaccuracies which
may become apparent in this document, whether as a result of new information, future events or otherwise, after
the date on which the statements are made or to reflect the occurrence of unanticipated events. Draper Esprit
reserves the right to amend, replace or update the information contained herein in future versions of this
document, in part or entirely, at any time, and undertakes no obligation to provide recipients with access to the
amended information or to notify the recipient thereof.
By receiving this document (whether in hard copy form or electronically), you irrevocably represent, warrant and
undertake to Draper Esprit that: (i) you are a professional client; an eligible counterparty and/or a qualified
investor, and (ii) you have read and agree to comply with, and be bound by, the contents of this notice.
4
Contents
01.
Results for the year end 31 March 2020
02.
Portfolio update
03.
Outlook
04.
Appendix
Model remains robust through pandemic
A long-term investment strategy delivering consistent returns in the private technology VC and Growth market
• Technology businesses are remaining private for longer, limiting public investment opportunities
• We invest Venture & Growth capital into Europe’s fast-growing technology businesses
• Our mission is to continue to empower Europe to invent the future, alongside our progress in building the infrastructure
required to scale the Group
• We are active board members and build stakes over the long term through primary and secondary investments
• Strong cash realisations are achieved on exit with a long-term aim to be self financing
• Prior to the pandemic, the Group was on track to achieve its targeted annual 20% portfolio growth – despite the current
backdrop have still delivered strong growth across the market
• Company structure provides daily liquidity for investors with no implication on investment timeline for portfolio
companies
5
6
01. Results for the year ended
31 March 2020
7
Financial highlights for the period
Year ended March 2020
Robust performance drives growth in net asset value
555p
NAV per share
6% increase
Disciplined approach to investment in diversified portfolio
£90m
Invested by the Group with a further £38m by EIS/VCT
Progress on realisations
£40m
Cash realisations
Gross Portfolio Value
£703m
Gross Portfolio Value increased by 18%
Gross Portfolio return of 10% in the year (12% H1, ~2% H2)
£59m
Gross Portfolio Fair Value increased by 10%
Substantial investment resources
£89m
Investment resources across the Group. Available cash of £34m, £5m
undrawn debt facilities, further complimented by £50m from EIS/VCT
Post year end
£60m
Debt facility increased by £10m
~£80m
Anticipated return from Peak acquisition
8
Business highlights for the period
Year ended March 2020
Continued growth in our portfolio
Invested in 9 new companies*
Continued investment in existing portfolio
19 existing portfolio companies*
Fund of Funds continues to develop
Committed to 4 new seed funds
Core Portfolio company value
Increased to £471 million (as at 31 March 2020)
Our response to COVID-19
Reacted quickly to safeguard employees, our investments and
monitored the liquidity of the Company
Acquisition of Encore Ventures
Acquired remaining interest in Draper Esprit’s EIS business
Expansion of Partnership team and wider Platform team
Internal promotions in both the Platform team and
Partnership team as well as several new hires
Additions to the team to strengthen infrastructure
Expanded legal, HR and IT functions
Continue to enhance our ESG practices
Established an ESG committee as part of our 12-month ESG
roadmap
*Reporting threshold – companies with a NAV of £1million or more
9
£244M
£354M
£594M
£703M
£90M
£40M
£59M
£M
£100M
£200M
£300M
£400M
£500M
£600M
£700M
£800M
31-Mar-18 30-Sep-18 31-Mar-19
Invested
Realised
Fair Value
Movement
31-Mar-20
Gross Portfolio Value Progression
Total
Increase
Decrease
£140M
£300M
£618M
£677M
£660M
343 pence
416 pence
524 pence
574 pence
555 pence
300
350
400
450
500
550
600
650
700
750
800
£M
£100M
£200M
£300M
£400M
£500M
£600M
£700M
£800M
FY17
FY18
FY19
HY20
FY20
NAV Progression
10
Cash realisations
£106 million cash realised since IPO (June 2016) with a further £80m subject to completion post year end
£29M
£61M
£111M
£40M
43%
66%
58%
10%
£20m
£30m
£40m
£50m
£60m
£70m
£80m
£90m
£100m
£110m
£120m
FY17
FY18
FY19
FY20
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
Profit after tax and return on
gross portfolio
Profit after tax
Return on Gross Portfolio
£35M
£15M
£16M
£40M
£80M
52%
14%
7%
7%
11%
£M
£10M
£20M
£30M
£40M
£50M
£60M
£70M
£80M
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY17
FY18
FY19
FY20
Post year end
Cash Realisations as %
opening portfolio
Cash Realised
% cash return on opening portfolio
*£80 million approximate and subject to completion
*
11
COVID-19 & the market opportunity
• Investors are becoming more selective
• Greater emphasis on follow-on investments
• Greater competition for quality deals – average
valuations will compress but quality deals will
get funding
• Focus on revenue generating businesses in
sectors such as fintech, cloud infrastructure,
online gaming and entertainment, digital
healthcare, remote financial services and
automation
• Increasing digitalisation in the broader economy
accelerated in the face of the pandemic
After an initial shock caused to the business environment by Covid-19, the technology industry has been driving the rebound in
the stock markets, bringing them back to pre-COVID levels
0
2,000
4,000
6,000
8,000
10,000
12,000
Jan-02-20Jan-09-20Jan-16-20Jan-23-20Jan-30-20Feb-06-20Feb-13-20Feb-20-20Feb-27-20Mar-05-20Mar-12-20Mar-19-20Mar-26-20Apr-02-20Apr-09-20Apr-16-20Apr-23-20Apr-30-20May-07-20May-14-20May-21-20May-28-20Jun-04-20Jun-11-20Jun-18-20Nasdaq Index Value ytd
NASDAQ Composite Index (^COMP) - Index Value
*Source: speakerdeck.com/dkelnar/whats-next-for-private-markets
Market NASDAQ composite as of 18/06/20
12
Covid-19 & Draper Esprit
The ongoing spread of COVID-19 continues to be, first and foremost, a public
health crisis but the impact on the economy and businesses is clearly also
very significant. We took early steps and have continued to put in place
measures to safeguard our employees, manage our business and remain well
financed, as well as supporting our portfolio companies.
We continue to focus on:
1. Keeping our team safe
2. Supporting our portfolio companies
3. Valuations
4. Strong balance sheet
Our portfolio companies are making
a positive impact and designing the
post-COVID world.
Only ~5% of portfolio value exposed to travel/hospitality sectors
13
Gross portfolio value progression to March 2020
Remaining
Gross Portfolio
Value
£0m
£50m
£100m
£150m
£200m
£250m
£300m
£350m
£400m
£450m
£500m
£550m
£600m
£650m
£700m
£750m
£232m
£703m
£12m
£13m
£14m
£15m
£17m
£17m
£18m
£22m
£24m
£28m
£31m
£65m
£68m
£87m
£20m
£20m
14
Plc invested £90m in the period*
Further £38m from EIS/ VCT funds
* All companies listed represent investments of over £1.0 million.
** Partial sale of shares
April
May
June
July
August
September
October
November
December
January
February
March
**
**
**
Deal Sourcing Strategy
Initial investments
Follow-on investments
Exits
Via Earlybird
>_
>_
>_
15
Partnership with Earlybird
Expanding our presence in the European market
• Continue to co-invest alongside the team
at Earlybird. We have joint deal teams
which focus on specific industries, sharing
insight and best practice
• New companies include: Aiven
• Aiven now added to the core portfolio
following further investment
Co-investments via EB VI & Growth Opportunities
Primary investments
Acquisition of stakes
in Earlybird IV and
Digital East I
Secondary investments
•
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. £80
million (depending upon the Zynga share price at the time), approx. £12 million (approx.
10p NAV per share) uplift to the fair value referenced in the 31st March 2020 results.
£131m
Total invested
in EB
£187m
Valuation of
EB
£25.4m 3.2x
Invested Cash/NAV
16
02. Portfolio update
17
We invest across four sectors in high growth European technology companies*
Consumer technology
New consumer-facing products,
innovative business models, and proven
execution capabilities that bring
exceptional capabilities enabled by
technology.
Enterprise technology
The software infrastructure, applications
and services that make enterprises more
productive, cost-efficient, and smoother
to run.
Hardware & Deeptech
The deeper technologies that will spark
advances in computing, consumer
electronics and other industries.
Digital Health & Wellness
Using digital and genomic technologies
to create new products and services for
the health and wellness market.
*Reporting threshold – companies with a
NAV of £1.0 million or more
33%
Split by
number of
companies
Our Portfolio
Core Portfolio Companies
Emerging Companies
Split by NAV
33%
35%
Split by
number of
companies
Split by NAV
38%
26%
Split by
number of
companies
Split by NAV
17%
6%
Split by
number of
companies
Split by NAV
12%
22
Total
Companies
in sector
25
Total
Companies
in sector
11
Total
Companies
in sector
8
Total
Companies
in sector
66
Total
Portfolio
Companies
18
New additions to the core portfolio
• Thought Machine offers a single software solution that banks
can configure to provide any product, user experience,
operating model or data analysis capability.
• Vault, the company’s core offering provides a next generation
core banking platform that enables banks, both established
and challenger to compete in a cloud-based era.
• Thought Machine has over 300 hundred employees at its
London headquarters with plans to continue to scale to 500
employees.
• The company launched its Google Cloud Partnership in
November 2019.
• Announced a new project, Vault Rare, intended to harness
Vault’s full power of the core and allow banks’ customers to
edit, adjust and even visually style banking products
themselves.
• Aiven, the data infrastructure management platform, possesses
8 open-source products, 6 Clouds, and covers 87 regions with
headquarters in Boston, Berlin, Sydney, and Helsinki.
• The company achieved SOC 2 compliance and became the first
cloud service to provide hosted PostgreSQL, in October 2019.
• The company tripled its revenue and added former Amazon head
of business development Olaf Schmitz to the company’s Board.
•
In February 2020 Aiven raised $40 million in their Series B fund
raise.
• Aiven’s operational capability is secured by a globally distributed
team that is able to work remotely in order to provide support for
its service, which is a self-hosting, fully automated platform that
requires little human support. Remote working is part of
everyday for the company and so they has seen minimal
disruption from COVID-19.
LR
LR
• The fair value of the portfolio
companies are established in
accordance with International
Private Equity and Venture Capital
Guidelines
• 33% of portfolio companies are
valued at last round price
• 57% of portfolio companies are
valued based on a set of comparable
listed peers
Valuation key
LR: Valuation based on last round price
C: Valuation based on a set of
comparable listed peers
We maintain a prudent
approach to valuations
£16.5m £17.4m 1.1x
£5.0m £12.8m 2.6x
Cash / NAV
Cash / NAV
Invested
Investment Valuation
Invested
Investment Valuation
19
Key portfolio companies underpin NAV growth
• Finalcad, the construction management application, allows
architects, field workers, and contractors to run synchronized
project builds and risk management solutions.
• The company launched FINALCAD Live, ‘Slack' an app allowing
users to write a digital site diary with images, a location, and
description, creating a news feed for short duration
construction projects.
• Since 2012, Finalcad has delivered more than 20,000 projects in
35 countries and raised over US$55m in funding.
• Several strategic hires were made across the business including;
Franck Le Tendre, former Industry Director EMEA at Dropbox, as
CEO .
• Finalcad is helping companies adjust to Covid-19 restrictions by
providing a paperless process that digitsies projects and creates
easily trackable health, safety , and environment records.
• Aircall, the cloud-based call centre, launched a new partner
program to help agents and resellers sell its phone solution to
its server message block customers. The new channel
partnerships will enable further growth as it helps companies
reach new audiences.
• The company launched its app marketplace featuring +60
integrations.
•
In the post Covid-19 climate, Aircall raised US$65m from led by
DTCP including funding from previous investors.
• The company has more than 300 employees with 5000+ clients
in over 1500+ companies .
• Aircall provided online resources to help its clients transition to
productively working from home as they transition to working
remotely .
• Machine intelligence semi-conductor, Graphcore announced in
May 2019, that Dell was one of the first customers to build an
IPU-based Dell platform combined with Graphcore’s Poplar
software stack.
• The company announced their collaboration with Microsoft
Azure in mid-November 2019.
•
In February 2020, Graphcore raised a US150m Series D round for
research and development investments.
• Graphcore launched its new Popular Analysis Tool in April 2020.
The tool assisted users to gain a deeper understanding of how
their applications are performing and utilising IPU.
• The company IPU was used to recognize Covid-19 in chest x-
rays, processing in 30 minutes compared to the 5 hours the
conventional chip took.
LR
LR
C
£12.4m £12.4m
£13.7m £86.8m
1.0x
6.4x
£9.9m £24.3m 2.4x
Cash / NAV
Cash / NAV
Cash / NAV
Invested
Invested
Invested
Investment Valuation
Investment Valuation
Investment Valuation
20
Key portfolio companies underpin NAV growth
• Ledger, the cryptocurrency and blockchain hardware security
wallet successfully launched Ledger Live companion software
and the Nano X product.
• The Nano X received CSPN (First Level Security Certificate)
certification issued by the National Agency for Information
Systems Security (ANSSI).
• Ledger has established a number of partnerships with
companies like; Engie, Birdz, Bitstamp and Shapeshift.
• The company has 200 global employees working in Paris, New
York, Hong Kong, and Vierzon.
• Ledger has over 1 million users in over 165 countries with 1.5
million units sold.
£17.7m £17.7m
• M-Files, the intelligent information management platform,
announced that they have linked their platform to Microsoft
Office 365, Microsoft Teams, and Salesforce Customer 360 in
order to streamline the customer experience further.
• M-files grew subscription based annual recurring revenue by
over 100% in 2019.
• The company have also hired a new CMO and have won a
number of awards including the European Investment Banks
2019 Innovation Award.
• The M-Files offering has helped businesses as they shift to
remote working to digitise, organise, and work more effectively
during the COVID-19 pandemic.
£5.0m £20.0m
C
C
1.0x
4.0x
• Founded in 2014, the radar satellite imaging service, ICEYE, is
the first organization in the world to successfully launch
synthetic-aperture radar (SAR) satellites with a launch mass
under 100 kg.
•
ICEYE has three satellites in orbit with plans to launch several
new units over the next few years.
• The company’s radar satellite imaging service, with coverage of
selected areas every few hours, both day and night, helps
clients resolve challenges across a variety of sectors such as
maritime, disaster management, insurance, finance, security
and intelligence.
• The company hired Dr. Mark Matossian, an aerospace industry
expert, as CEO of ICEYE US, Inc indicating plans to extend
satellite manufacturing to the US.
£7.5m £13.9m 1.8x
LR
Cash / NAV
Cash / NAV
Cash / NAV
Invested
Invested
Invested
Investment Valuation
Investment Valuation
Investment Valuation
21
Key portfolio companies underpin NAV growth
• Peak, the mobile games developer surpassed US$1bn in player
spending, lead by its 2015 release Toy Blast.
• Over 275 million users world wide have installed at least one of
the company’s products.
• Most popular games, Toon Blast and Toy Blast, have more than
12 million average mobile DAUs (Daily Active Users).
• Most popular in the United States, where they have generated
close to an estimated 68% of their revenue or an estimate of
nearly US$800 million.
• Post-period end, Zynga entered into an agreement to acquire
Peak for $1.8 billion.
• Perkbox raised £13.5 million in a round lead by Draper Esprit in
March 2019.
•
The company signed up a number of new partners including;
Krispy Kreme, ASDA,, Sainsbury’s and H&M.
• Perkbox has successfully expanded in Australia and France.
• The company made several key new; Marissa White as Revenue
Operations Director and Ed Ellis as Organisational Readiness
Director.
• Perkbox ranked 25th as one of FT’s 2019 ‘Europe’s Fastest
Growing Businesses.
• Perkbox offers resources that have become particularly useful in
light of COVID-19, the platform offers online GPs on-demand,
online employee recognition, real-time feedback, and perks like
online shopping discounts, free online fitness classes and 24/7
online learning.
C
C
• Ravenpack raised a US$10 million Series B round from the
technology advisory and investment firm GP Bullhound to fuel
its expansion into Asia, as well as to diversify their product
offering in order to target corporate customers.
• Ravenpack also introduced ‘Ravenpack connections’- a tool to
analyse capital markets through the lens of business
relationships and interconnections among thousands of entities
including companies, organisations, and key political figures.
•
In response to the coronavirus pandemic, Ravenpack created a
free Coronavirus news monitor. The monitor is a live and
interactive website built to track the latest news and trending
topics surrounding the pandemic.
LR
£14.0m £19.9m
£7.5m £30.9m
1.4x
4.1x
£25.4m £67.8m *2.7x
Cash / NAV
Cash / NAV
Cash / NAV
Invested
Invested
Invested
*based on year end
number at 31 March 2020
Investment Valuation
Investment Valuation
Investment Valuation
22
Key portfolio companies underpin NAV growth
• Revolut, a global challenger bank, supports 140 currencies, with
no international transaction fees, boasts 8+ million customers
and is responsible for 350m+ transactions.
•
In Feb 2020, Revolut raised a US$500m Series D round led by
TCV.
• The company launched Revolut Junior, a product for under 17s
and launched integrations with Paymo, Adzooma, and
Invoicexpress.
• Former Standard Life Aberdeen co-Chief Executive, Martin
Gilbert, joined as executive chairman post year end and Revolut
appointed Pierre Decote as the new group chief risk officer in
2019.
LR
• Smava announced that it plans to IPO, having achieved strong,
consistent growth with a Compound Annual Growth Rate
(CAGR) of 90% from 2012.
•
The company is now the largest specialised loan portal in
Germany, providing access to over €3bn a year in loans.
• Smava’s early 2020 partnership with S-Kreditpartner GmbH
part of Landesbank Berlin AG has facilitated consumers to
consumers obtaining cheap loans with Smava.
C
• TransferWise is used by over 7 million people transferring over
£4 billion a month.
• The company introduced new currency lines in several countries
in Africa and South America.
• They have now integrated with the UK’s Open Banking API and
are steadily rolling out their TransferWise for Business account
to hundreds of companies via their beta program.
• Transferwise appointed two non-Exec Directors to the board the
CFO of Adyen, Ingo Uytdehaage, and David Wells, former CFO
of Netflix.
LR
£14.5m £16.7m
£5.9m £15.0m
1.2x
2.5x
£7.4m £21.7m 2.9x
Cash / NAV
Cash / NAV
Cash / NAV
Invested
Invested
Invested
Investment Valuation
Investment Valuation
Investment Valuation
23
Key portfolio companies underpin NAV growth
• UiPath raised its series D investment round raising US$568m at
a post-money valuation of US$7 billion, making UiPath one of
the fastest growing and highest- valued AI enterprise software
companies in the world.
• The company has increased its annual recurring revenue (ARR)
from US$8m to over US$360 million from 2017 to 2019 and has
grown its customer base to over 6,000.
• UiPath has been ranked in Deloitte’s 2019 Technology fast 500
in the number two spot and placed on FT America’s Fastest
Growing Companies 2020 list.
• UiPath boasts 50% of the top 50 Fortune Global 500 as
customers, including American Fidelity, BankUnited, Duracell,
Google, Ricoh, Shinsei Bank, Uber, Virgin Media and World Fuel
Services.
• Raised a series E round of $55 million in March 2019.
• Made a number of significant hires across their senior
management team, adding a new Chief Marketing Officer,
Chief Human Resources Officer, and Chief Legal & Policy Officer
and added to its Board of Directors.
• To make its ratings easier to understand and more transparent,
they launched TrustScores and ‘Transparent Flagging’ to create
more nuanced ways to understand overall ratings.
• Trustpilot has over 800 employees in its 8 office locations in
Copenhagen, London, Edinburgh, New York, Denver, Berlin,
Melbourne, and Vilnius.
• The company now has more than 77 million reviews of over
344,000 web domains with almost 2 million reviews written
each month.
C
LR
£11.0m £28.0m 2.5x
£29.7m £65.3m 2.2x
Cash / NAV
Cash / NAV
Invested
Invested
Investment Valuation
Investment Valuation
24
03. Outlook
25
• Despite market uncertainty, we’ve entered the new financial year well positioned to capitalise on our growing
reputation as one of Europe’s leading venture capital businesses. We support the community and businesses in this
difficult period and identify those with strong business models
• Our growth target for the coming financial year is 15%, with an expectation of returning to 20% through the cycle
whilst recognising the volatile environment in which we are currently operating
• We further enhanced our Partnership team and Platform team, continuing to build a strong infrastructure to build
long-term growth while maintaining the integrity on our investment process
• Our dual listing, strong cash reserves, and access to broad suite of funding sources will enable us to continue to access
the best deals across the UK and Europe
• We remain passionate about democratising entrepreneurship and fuelling jobs across the UK and Europe
Summary and outlook
@draperesprit
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, Chief Operations Officer
Stuart.chapman@draperesprit.com
26
27
04. Appendix
28
Gross Portfolio Value Table
*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%
Fair Value of
Investments
31 Mar 2019
£’000s
Investments
£’000s
Realisations
£’000s
Draper Esprit
(Ireland)
Limited
£’000s
Movement in
Fair Value
£’000s
Fair Value of
Investments
31 March 2020
£’000s
Interest
FD category*
at reporting
date
Investments
Graphcore
78.6
-
-
-
8.2
86.8
B
Peak Games
41.7
-
-
-
26.1
67.8
B
Trustpilot
62.0
-
-
-
3.3
65.3
C
Ravenpack
15.6
-
-
-
15.3
30.9
D
Ui Path
33.0
-
(4.6)
-
(0.4)
28.0
A
Aircall
9.9
-
-
-
14.4
24.3
B
Revolut
7.4
-
-
-
14.3
21.7
A
M-files
17.2
1.0
-
-
1.8
20.0
B
Perkbox
23.7
-
-
-
(3.8)
19.9
C
Ledger
17.7
-
-
-
0.0
17.7
B
ThoughtMachine
0.0
16.5
-
-
0.9
17.4
B
Smava
23.5
-
-
-
(6.8)
16.7
B
Transferwise
27.7
-
(15.0)
-
2.3
15.0
A
ICEYE
3.7
3.8
-
-
6.4
13.9
B
Aiven
-
5.0
-
-
7.8
12.8
B
FinalCad
12.4
-
-
-
0.0
12.4
C
Remaining portfolio
217.9
63.6
(19.9)
-
(31.1)
230.5
-
Total
592.0
89.9
(39.5)
-
58.7
701.1
Co-Invest assigned to plc
2.0
-
-
-
(0.2)
1.8
Gross Portfolio Value
594.0
89.9
(39.5)
-
58.5
702.9
Carry external
(27.6)
-
-
-
(13.0)
(40.6)
Portfolio deferred tax
(5.4)
-
-
-
0.1
(5.3)
Trading carry & co-invest
1.1
-
-
-
(0.8)
0.3
Draper Esprit (Ireland) Limited
-
-
-
4.0
(4.0)
0.0
Net portfolio value
562.1
89.9
(39.5)
4.0
40.8
657.3
29
Consolidated Statement of Comprehensive Income ended 31 March 2020
Notes
Year ended
31 March 2020
£’000s
Year ended
31 Mar 2019
£’000s
Change in unrealised gains on investments held at fair value through the profit and loss
5
40,755
114,715
Fee income
6
11,255
6,101
Total investment income
52,010
120,816
Operating expenses
General administrative expenses
7
(9,810)
(7,774)
Depreciation and amortisation
14, 17, 20, 23
(520)
(163)
Share based payments – resulting from company share option scheme
13
(990)
(1,100)
Share based payments – resulting from acquisition of subsidiary
—
(1,989)
Investments and acquisition costs
(239)
(207)
Exceptional items
—
(34)
Total operating costs
(11,559)
(11,267)
Profit from operations
40,451
109,549
Finance (expense)/income
Net finance (expense)/income
10
(68)
1,601
Operating profit before tax
40,383
111,150
Income taxes
11, 23
(17)
11
Profit for the year
40,366
111,161
Other comprehensive income/(expense)
—
—
Total comprehensive income for the year
40,366
111,161
Profit attributable to:
Owners of the parent
39,707
110,579
Non-controlling interest^
18
659
582
Earnings per share attributable to owners of the Parent:
Basic earnings per weighted average shares (pence)
12
34
115
Diluted earnings per weighted average shares (pence)
12
33
110
^ 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.
30
Financial Position as of 31 March 2020
Notes
31 March 2020
£’000s
31 Mar 2019
£’000s
Non-current assets
Intangible assets
14
10,028
10,130
Investments in associates
15
258
258
Financial assets held at fair value through the profit or loss
16
657,333
562,061
Property, plant and equipment
17, 20
1,760
209
Total non-current assets
669,379
572,658
Current assets
Trade and other receivables
19
7,719
1,140
Cash and cash equivalents
32,255
50,358
Restricted cash
21
1,883
—
Total current assets
41,857
51,498
Current liabilities
Trade and other payables
22
(5,038)
(4,959)
Lease liabilities
20
(358)
—
Total current liabilities
(5,396)
(4,959)
Non-current liabilities
Deferred tax
23
(611)
(631)
Loans and borrowings
21
(44,636)
—
Lease liabilities
20
(975)
—
Total non-current liabilities
(46,222)
(631)
Net assets
659,618
618,566
Equity
Share capital
24
1,189
1,179
Share premium account
24
400,726
395,783
Merger relief reserve
25
13,097
13,097
Share-based payments reserve – resulting from company share option scheme
2,339
1,713
Share-based payments reserve – resulting from acquisition of subsidiary
10,823
10,823
Retained earnings
231,444
195,737
Equity attributes to owners of parent
659,618
618,332
Non-controlling interests
18
—
234
Total equity
659,618
618,566
Net assets per share (pence)
12
555
524
A platform that can support entrepreneurs at all
stages of their growth
31
Raising Seed
Series A
Series B
Series C
Pre-IPO & on
Fund of Funds
PLC
PLC
EIS
Our Shareholders
EB
UK
EUR
VCT
PLC
32
Our People
Partnership Team
Platform Team
Functions
1.Research, identify, engage and support tech start-ups
2. Connect with European & UK tech entrepreneurs and
investor
3. Develop and maintain close collaborative partnerships with
prospective and existing portfolio
4. Work closely with Partnership team to support to ongoing
deals, our portfolio companies, and provide our portfolios
founders with guidance as their businesses scale and grow.
Our Partnership team is made up
of experienced individuals that
were founders, CEOs, start-up
advisors, private equity and
investment bankers, and even a
doctor in their past lives. The
point is we recruit the very best
to work at Draper Esprit and to us
the best come with years of
knowledge and real-life
experience. They know how to
support start-ups because they
have been through it themselves.
They’re here to bring hands-on
support and advice to every team
we back, helping them to grow
and scale supported by a
talented and experienced group
of Venture partners.
Simon Cook
Founding Partner
Nicola McClafferty
Partner,
Consumer
Jonathan Sibilia
Partner,
Fund of Funds
Vinoth Jayakumar
Partner,
Fintech
Will Turner
Senior Partner
Vishal Gulati
Venture Partner,
Digital Health
Richard Marsh
Partner,
Enterprise & SaaS
Christoph Hornung
Investment Director,
Deep Tech
Making smart investments is key to succeeding in venture
capital markets, and so is an investing firm’s ability to engage,
support and collaborate with the entrepreneur community,
other investors and the wider ecosystem.
Marketing, Communication &
Proposition Management
Lead & Dealflow
Generation
Portfolio/Start-up
Engagement & Support
Operations & Reporting
Deal Delivery &
Research
Draper Esprit
Events
Community &
Network Events
Stuart Chapman
Chief Portfolio
Officer
Focused on long-term winners
in technology
33
Profile of core portfolio companies (on average)
• ~60%+ Gross Margin
• £29m Average Holding Value
• 8% Average Stake
Core Holdings (16 companies) represent
67% of NAV and Approx. 67% of Gross
Portfolio Value*
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.
*Core companies are those with a Fair Value of over £12m
$83m
$121m
$187m
$0m
$20m
$40m
$60m
$80m
$100m
$120m
$140m
$160m
$180m
$200m
FY18A
FY19A
FY20B
Average revenues - Core Portfolio
45%
55%
3.2x
2.3x
2.6x
2.5x
2.2x
2.0x
1.7x
8.3x
7.3x
2.6x
1.9x
0.4x
0.1x
7.6x
1.9x
1.6x
0.0x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
Peak - £80m^Podpoint - £12.4mTransferwise* - £15.3mUiPath* - £4.6mCodility* - £0.5mBitBar - £0.5mGraze - £6.3mGrapeshot - £11.5mTails.com - £2.9mHorizon - £2.9mClavis Insight - £15.3mMoviepilot - £0.5mAveillent - £0.2mMovidius - £27.5mQosmos - £8.0mDatahug - £3.6mWorldstores - £0.0mExit value
34
Track Record
• Historical track record of
over 20% IRR prior to IPO***
• Over 125 deals since 2006
• Over $5bn value of exits
since 2010
*** Aggregate portfolio return since 2010 of the Company
^ Peak Games subject to 3 months completion from
*UiPath, TransferWise, and Codility represent partial disposals and Draper Esprit continue to hold stakes in these companies
2020
2019
2018
2017
2016
35
The value of rounds above €100
million accounts for 33% of the
total investments in Q4 2019
* Peak Games disposal is subject to completion
Track Record
Nav progression for deals > £2m
2.1x
2.7x
3.2x
2.5x
2.5x
1.0x
1.2x
1.3x
3.3x
3.3x
1.0x
8.3x
8.3x
1.8x
1.8x
2.1x
2.3x
2.3x
1.0x
1.3x
1.9x
1.0x
2.6x
2.7x
2.7x
2.7x
1.7x
1.5x
2.1x
2.4x
7.6x
7.3x
2.4x
2.6x
7.1x
7.6x
1.7x
1.9x
1.2x
1.6x
1.0x
2.0x
4.0x
8.0x
16.0x
Jun-16
Sept-16
Mar-17
Sep-17
Mar-18
Sep-18
Mar-19
Sep-19
Mar-20
Post year end (Subject
to completion)
Peak Games (£80.0m)
UiPath (£4.6m)
Transferwise (£15.3m)
Grapeshot (£11.5m)
Podpoint (£12.4m)
Clavis Insight (£15.3m)
Graze (£6.3m)
Tails.com (£2.9m)
Horizon (£2.9m)
Movidius (£27.5m)
Qosmos (£8.0m)
Datahug (£3.6m)
Portfolio
Companies*
Across all funds
+300
Seed fund
investments in
the period
£7.2m
Total
Commitments
over 5-10 years
£39.1m
£45k
Average investment
per seed companies so
far
Average equity
stake of 0.5%.
Seeding the early stage
ecosystem: our fund of funds
36
• 2.5 years after launch program has committed £39.1 million to 20 early stage
funds, with a further 4 approved by the Investment Committee
• Over 300 companies have raised aggregate capital of £1.1 billion
Seed fund strategy:
•
Invest small cheques into funds across Europe, particularly in geographies and
verticals that we don’t have exposure to
• We look for high quality fund managers with a proven track record
• Our seed funds partner with us as scouts, as the companies grow we can source
the best for series A & B
• Max 5-10% of our annual investment total
37
Market Summary Overview
More Funds, More Funding, Winners at the Top
This increase in private capital has led to a rapid expansion on both new VC funds and the total level
of fundraising. But it is the top end of the market that has shifted most. In 2010, a single fund of
US$1 billion or more was rare, today, such funds are increasingly common.
Europe’s Growing influence
This has led to a rapid expansion of both new
VC funds and the total level of fundraising.
We have also witnessed Europe starting to
realise its potential as a technology
powerhouse. Given the flexibility in our
structure and the experience and expertise
within our team, Draper Esprit is in an
excellent position to benefit from
opportunities these longterm trends provide.
Public to Private & Staying Private longer
Over the last decade we have witnessed a historic shift in the capital markets from public to private
with companies staying private for longer, raising more capital and reaching greater levels of
maturity before exit.
0
20
40
60
80
100
120
140
160
180
200
2013
2014
2015
2016
2017
2018
2019
2020 (YTD)
Number of EU Unicorns (Cumulative)
United Kingdom
Germany
Netherlands
Sweden
France
Switzerland
Spain
Denmark
Norway
Finland
Russia
Italy
Belgium
Austria
13%
11%
13%
15%
13%
14%
17%
18%
18%
22%
14%
16%
21%
23%
22%
26%
31%
33%
33%
36%
0%
10%
20%
30%
40%
50%
60%
70%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Europe’s share of investment has nearly
doubled by value and tripled by volume
Share of Value
Share of Volume
European share of US + European investment (Private, VC-backed companies)
Data source: Dealroom 2020
38
Most of the growth remains in private larger rounds
€1.4
€1.5
€1.5
€1.8
€1.9
€1.6
€1.7
€1.6
€1.8
€2.3
€1.9
€2.0
€1.8
€2.0
€1.8
€1.9
€1.7
€1.1
€0.9
€1.0
€0.9
€0.9
€1.0
€1.0
€1.1
€1.1
€1.3
€1.7
€1.4
€1.8
€1.5
€1.6
€1.7
€1.6
€1.5
€1.2
€0.9
€0.8
€0.5
€0.6
€0.6
€0.7
€0.9
€0.8
€1.1
€1.3
€0.9
€1.3
€1.5
€1.3
€1.8
€1.3
€1.0
€0.9
€0.6
€0.4
€0.7
€0.5
€0.5
€0.8
€0.8
€0.5
€1.0
€0.9
€0.9
€1.2
€1.4
€1.6
€1.0
€1.3
€1.2
€1.3
€0.9
€0.4
€1.0
€2.1
€2.2
€1.4
€2.1
€1.0
€1.6
€1.3
€2.8
€4.8
€3.4
€2.5
€2.3
€1.2
€0
€2
€4
€6
€8
€10
€12
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
€0-10M
€10-25M
€25-50M
€50-100M
€100M+
2017
2016
2018
2019
Investments in Europe by round size
€ Billions2020
39
Sustainability
• Environmentally minded investments;
• Pod Point: (Exit in Feb 2020)
rapidly scaling, award-
winning electronic vehicle
charge point station
• Everoad: Leverages
technology solutions to build
efficiencies and carbon
reductions into the global
freight industry
• Aircall: facilitates cloud-based
calling solutions reducing the
need for travel
• As a plc we have heavily invested in
Zoom conferencing solutions to
encourage video calls in lieu of
domestic travel
• We continue to advocate for a
paperless workplace with the adoption
of improved internal IT and document
sharing solutions
• Commissioned a full carbon footprint
report and balancing programme (see
images on right)
CommuniTree
Monitoring the success of C-Level carbon balancing through
reforestation
Hadza Hunter Gatherers
C-Level carbon balancing with communities protecting forests
• Our existing portfolio is full of
companies doing remarkable things to
enhance health and wellbeing (e.g.
Endomag, Push Doctor, Ieso Digital
Heath, Lifesum, Fluidic Analytics and
Miracor Medical Systems); encourage
social engagement (e.g. Perkbox,
Aircall and Resolver); and improve pro-
consumer compliance (Kaptivo and
getsafe).
• Hired a dedicated Head of Human
Resources
• Engaging with entrepreneurs in hosted
themed events, including a ‘Ladies in
VC’ event; and continuing to offer
highly competitive remuneration and
benefits packages to all of our
personnel.
• Various policies are in place within the
Group designed to protect and
empower personnel including; Anti-
bribery and corruption, Whistleblowing
and Health and Safety, all of which are
reviewed annually and, where relevant,
amended or supplemented to
accommodate the evolving risk profile
of the business.
•
Investing in businesses that enhance the state of
the art digital security technology i.e. Ledger,
Fraugster or facilitate greater transparency,
accountability, and/or protection in existing
solutions i.e. Form3, Revolut, N26, Transferwise
• As a publicly traded entity we are subject to robust
risk management and governance arrangements,
and have this year bolstered our internal systems
and processes
• A dedicated head of IT has been hired to implement
various security enhancements into our IT
environment
• Complimenting the technological changes is the
addition of our first in-house legal counsel who has
been working with our internal and external IT and
compliance advisors to build policy and systems
designed to protect our data and redouble our
commitment to minimising compliance risk and
preventing bribery and corruption.
• Responsibility for governance within the group
ultimately sits with the Board but is also permeated
throughout the group by regularised training and
internal processes that are designed to ensure
observance of good governance at every stage of
investment.
• Remuneration policies are regularly reviewed by the
Board’s remuneration committee and are designed
to ensure that all reward and recognition structures
are aligned with the broader goals of the company’s
stakeholders by dissuading any risk-taking that is
inconsistent with the goals and parameters
established by the Board.
Environment
Social
Governance
Our ESG ambitions are an ongoing and evolving process that we are committed
to build and develop over time, and we have a long way to go on this journey,
however meaningful steps have been taken in this period across multiple areas
within our business.
40
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.
How we help companies grow
• Strict investment criteria:
 Strong technology and business models with experienced
management teams
 Operate in new markets with serious potential for global
expansion
 Strong gross margins and capital efficient business models
• Screen thousands every year, including through our seed
funds
• Focus on price discipline
• We invest small amounts early, reserving more for later
rounds
Exit (IPO,
trade sale)
Thousands + Cos
raising in Europe
Seed Fund
of Funds
Secondary Market
Access
1
2
3
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
41
Strict investment criteria drive
our decisions
From potential opportunity
to exit