Augmentum Fintech PLC (AUGM.L) Earnings Call Transcript & Summary

Good morning, and welcome to the Augmentum Fintech PLC investor presentation. [Operator Instructions] Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO, Tim Levene. Good morning to you.

Good morning, and good morning, everyone, and thank you for making the time on this Friday morning to hear an update for the results ended year 31st of March 2023. And I'll take you through over the next 25, 30 minutes, a snapshot of the progress that has been made, a market overview and what we see coming down the pipe over the coming 12 months and I'm very happy at the end of the presentation to answer any questions so please do submit some questions in advance, and will do my very best to answer as many, if not all of them, over that time period. And it should have come as no surprise to many of you that it has continued to be a very unpredictable year overall in the market, some significant headwinds from a macroeconomic point of view that continue to flow through, not just the Tech and Fintech market, but the general economy across Europe as well. And despite that, we feel we've put a pretty strong year together fueled by some very strong underlying growth by the portfolio and we are really well positioned from a balance sheet point of view to capitalize on what we think will be more attractive investment conditions over the coming 12 to 18 months as well and I'll really go in a little bit more detail on some of those dynamics. And where are we in terms of portfolio construction? For those that have been following us since IPO, back in 2018, the business started with 5 assets and GBP 90 million of NAV, and that has grown over that period through some net asset value growth, through some further issuance and building a really well-diversified portfolio across the European fintech ecosystem in particular, with the U.K. very much that center of gravity. And when we think about portfolio construction, it's been really important for us to make sure we have that balance across a number of different subsectors, whether it's business to consumer, business to business, whether it's servicing the incumbents who are having significant challenges in many respects in their digital transformation, with infrastructure investments and of course backing those businesses that are really truly disrupting and disintermediating what we would classify as the traditional financial services sectors by offering more compelling products, digital-first at lower margins with more transparency and ultimately a better consumer experience. And if you look at that progression, you can see the journey that we have been on. And I think just in terms of explaining this slide, what you see here on the right-hand side, is the GBP 294 million, the net asset value, and then that cash position at the end, which at the end of the period, March '23 was at GBP 39 million. We since had an exit from a business called Cushon, a workplace pension platform that was purchased by NatWest and that has further swelled our cash balance to around GBP 50 million today. A really important measure of how we're progressing is to look at the internal rate of the return. So at the point in which we invest our capital, what is that ongoing rolling return? And of course, it is a blend of both unrealized and realized and as the portfolio continues to mature, you will see an increased amount of realizations that then largely will be recycled into new opportunities. And our internal target is to be hitting 20%. If we're hitting that IRR of 20% then we very much will sit in the top quartile of performance amongst the European venture capital ecosystem. And of course, there's some fluctuation there. But fundamentally, we still very much remain on track. Venture capital is a long-term asset class, it does fluctuate. There are certainly ups and downs along the journey, but it is our job to get it wrong much less frequently than we get it right and that blended return does need to be in the low 20s and high teens for us to be then regarded as one of the most capable investors in the asset class. So we have been progressing well. There is much still to deliver, but we're certainly happy with the progress and the direction of travel that's been happening at the moment. And what about deployment? And if you look at this time last year, you will have seen that we were more active. It should come as no surprise in the current environment that we have turned down the dial, taking our foot off the pedal a little bit. It's not, as if we have been sitting idle, we have looked at huge amount of opportunities over the past 12 months. I think the challenge for us is to be very conscious on getting the right entry price at that point of investment. And we are seeing some fluctuation in valuations. Yes, on the whole, valuations are coming down. We would say a lot of fintech companies are more resistant to raising in the current market because they do recognize the valuation compression in the market. And if they can extend their runway and hope for better conditions then that is what they are doing. And so we have had a negative selection bias in the market where we would say that of all the companies that we've seen, we haven't seen the same level of quality that we would have seen in previous years. And those that have been on a high quality, they are still being heavily competed on in terms of pricing, and we want to be absolutely clear that we are paying the right price on the way in and that we are going to be rewarded for the risk that we're taking as and when we make a really positive selection that has that outlier success story. But nevertheless, we've identified 2 really interesting businesses, one in Israel, a business called Kipp and one in Germany, a cyber insurance platform called Baobab, both hugely innovative propositions backed by exceptional teams, both of which have been there and done it before, have deep domain expertise. In Kipp's case, in the payment space and in Baobab's case, in the insurance space. And I think that is incredibly important for us when we're looking for those needle in a haystack of the hundreds, if not low thousands of businesses that we engage with over an extended period of time. And we also want to be continuing to back our businesses, support those portfolio companies that require further capital, showing very strong signs of growth. We have a post-period end [ back ] Volt, which has just seen a hugely successful fundraise from the very significant U.S. investor IVP and they led a $60 million funding round. Volt is really at the forefront of the open banking payments orchestration well, and have tremendous momentum. And I think a real validation of that strategy that IVP have come in, in the current market environment to lead such a strong round. So what about the portfolio? And I talked about the construction, but equally, when we think about portfolio construction, it's really important to have the right balance of maturity. And what do I mean by maturity? You have a number of companies at different stages of their evolution. And as they close then that investment trust, we want to draw that we have visibility on exit at some point in the near future where we can replenish our funds, where we can continue to reinvest in the next generation of successful fintech businesses. And so although you will see a larger number of our companies towards the early stage, an early stage would be a business that might be 1 or 2 years old. And, over time, you hope many of those will progress successfully to latter stages of maturity and ultimately exit and deliver that return to help fuel the IRR. But they -- when we talk about a late business, it doesn't mean that these are businesses that aren't still growing. They're also growing -- well, certainly, many of them are growing at a very rapid rate, but we have a greater level of visibility on their path to exit. So we would expect an exit opportunity of those businesses within 3 years. It doesn't mean we absolutely will exit them because some of these businesses continue to grow, and it might not be the right moment in time to seek an exit. But at the same time, we want to make sure that we have that well-balanced portfolio to ensure that we can deliver those returns and those proof points back into the funds and for shareholders to really see that IRR increase in terms of realized IRR as well. And so what's been happening over the past 12 months and valuation is an area of deep debate amongst many investors. We aren't the only investment trust trading at a discount to NAV. And I think it's our job to articulate why we feel that discount is unwarranted and why we think there's significant upside to come from the existing NAV. And I think if you look at the audited approach, and we'll talk a little bit about the approach to valuation, you can see continued movement on both sides of the equation, both in uplifts and reductions as well across the portfolio, and I'll talk a little bit about the approach that the auditors take on that and the progress that has been made on an aggregated basis across the portfolio. And when we look at the valuation, it is really important to look at what has happened in the public market. And you'll see here the orange line is the high-growth listed fintech index. So what is that? That is a basket of companies that are listed both in Europe and in the U.S., and this measures their forward revenue multiple and of course, high growth means these businesses are continuing to move in a positive direction, but on average, they would be growing at around 30%, 35% a year. And you can see at the heights of the market, it was clear we were in an unprecedented bubble certainly over the last 20 years. That back in 2021, we were seeing forward revenue multiples in the low 20s, which is a pretty extraordinary number. When you look at the historic average, which hovers between 6 and 8, which would be your kind of 20-year average. And I often get asked by investors, analysts, press, well, if the market went up 23x, why haven't you written down your valuations by 60%, 70% like we've seen some of the drops in the public markets? And the very straightforward answer has been, well, we never wrote them up to that extent. And this purple line beneath shows you the top 10 Augmentum companies. And this year, they account for about 80% of our invested capital. And you can see that we have hovered between 4.5 and 6 and we're currently trading at a 4.5x forward revenue multiple for our top 10. To give you a sense of the average growth rate, these are growing north of 100%. In fact, they grew over the last 12 months on average at 117%. The median was at 90%. So we continue to back very high-growth businesses recognizing that over the past 12, 18 months, there's been a greater focus on both cash preservation and on a path to profitability of those businesses that are more mature to really actually start to demonstrate profitability. And despite the fact that many of these businesses have just taken their foot off the pedal, it's not growth at all costs, it's about sustainable and profitable growth. We're still seeing some very strong underlying growth despite the very significant macroeconomic headwinds. And I think a fair conclusion to draw is that despite some very challenging economic conditions, these businesses continue to grow because they're offering a proposition that both consumers and businesses alike are really gravitating towards. So what does that mean in practice? Well, just to give you a sense, if our auditors had applied exactly the same methodology company by company 12 months ago to the company this year, we would have seen about a 30% uplift in the NAV, now the market has shifted, they have looked at the public market comparables, they've looked at the basket of parables both in the public and private markets and said we are going to apply a discount company by company, it's a case-by-case basis, and that blended multiple is down at 4.5. So although there was potentially an GBP 85 million uplift that has been negated by the compression of multiples in the market, which reflects market conditions, and that has given us that largely flat NAV. So I think the flat NAV doesn't fully represent in any way the progress of many of the portfolio, but we also recognize that we are in a continually different environment. It is very much a bear market out there. And as such, that contraction in multiples has been applied. But I think the message that I want to get across is that as shareholders, you are backing a basket of assets, many of which continue to grow at an incredibly rapid rate, but at the same time, recognizing that market conditions have changed, and we will not back businesses that promote growth at all costs. We want to make sure that they have strong underlying unit economics. They have a long cash runway and we very much kind of align with the management in that approach. So what about exits? And I think, again, it's really important to not just demonstrate NAV growth and growth in the underlying portfolio, but investors who rightly point to say, look, it's great to have valuation uplift, but we really want to see exits north of where your holding value is. So we can really build conviction and confidence in the fact that these are businesses that you are backing that are fairly priced. And if you look at our 3 exits and certainly 2 exits over the past year or so in Interactive Investor and Cushon, these are businesses that we had valued and then exited well north of the holding value. So in Interactive's case, it was a 31% uplift and then in Cushon, which was a business which we'd only held for less than 2 years, so it wasn't one we were expecting to exit. There was a further 47% uplift. A lot of our businesses have real strategic value. And as such, when the exit opportunities do come, we would expect them to exit at a premium. And if I look at all our exits since IPO, they have all been at or north of the holding value. And hopefully, that gives you as an investor, real confidence that there not only is further upside to come, but at our holding value, we continue to err on the side of conservatism and are prudent in our approach. So when we think about valuation, there are a multiple of approaches that auditors will take in terms of how they determine. If I showed you this slide a few years ago and the percentage of our companies that were valued by different methods. I think it's fair to say you would have seen more of the companies valued on the price of the recent transaction. And I think in the current market environment, there has been a healthy skepticism in the market, I, the auditing community and certainly by the investor community that actually there has been a lag in the private market, and they really want to see the public market comparables being applied to these private assets. And you can see that real shift in our approach to valuation. BDO our auditors, and as you can see, when you look across the portfolio, nearly 70% of the portfolio is valued on a basket of public market comparables. Alongside the liquidation preference and for those that are unfamiliar with the liquidation preference, it's a really important feature of how many venture capital investors invest, and we are very similar in that approach, where, yes, we might pay a higher headline price for an early-stage business, but ultimately, we would be issued a preference share. So what does that mean? In simple terms, if we invested GBP 5 million in a company, valued at GBP 20 million, a post-money valuation of GBP 25 million after our money, it goes on a journey. It doesn't raise any more money and it sells. It's not a successful exit, but it sells for GBP 5 million. We would get our GBP 5 million back, the last money in, the first money out. So we've been willing to back the companies for growth, we have paid a high headline price on the way in because we're of high conviction that they could deliver some significant growth. It doesn't turn out that way, which is sometimes the outcome in venture. But we still get our money back, and that is a really important feature in the approach that we take. Alongside that in a scenario where that same company had to raise more money, but at a $5 million valuation 2 years down the line, we would have something called anti-dilution where further shares would be issued to us as an investor to compensate us for the company requiring more money at a much lower rate and having not fulfilled its potential. So it's quite important to have that structure in place. It does allow us to protect the downside. Of course, we go in very much with the expectation that these are going to be rocket ship success stories. But ultimately, we do want to make sure that we have that downside protection and it does sometimes come into play. So what about the underlying growth in the portfolio in that top 10 that represents about 80%? Well, the good news is many of these businesses have shifted to profitability over the past 12 months, certainly the more established ones and those that are still investing very much in growth and the focus isn't on short-term profitability, have extended their runway on average. So 29 months of runway really gives these businesses -- many of these businesses, a strong platform to look forward and be able to continue to invest in their growth in a sustainable way. And as you can see, you've got a selection of businesses many of whom are, we would define, in the high growth of that category. So growing north of 75% and in many respects, someone unexpectedly to the extent that they have grown as a result of conditions. But despite turning down that dial, many of them have continued to see that organic growth really pushed them forward and been at a much higher rate than they might have expected. So yes, direction of travel is positive, but at the same time, recognizing that we are in a very difficult macroeconomic environment, and we do need to have one eye on runway, on cash preservation, on maximizing for profitability, where it makes sense to do so. But this is absolutely not a portfolio where we're sitting there and saying, it's all about profitability. We have businesses that are early in their journey. We want them to build market share. We want them to capitalize on the significant digital transformation shifts in the market, and we want to be able to support them on that journey. So in some cases, we absolutely don't want them to, if they have the choice to make GBP 1 million or invest GBP 2 million further in profitable growth, we would rather see GBP 1 million loss if that platform of GBP 2 million is invested very effectively and allows them to really push forward and that's a really important distinction to perhaps some later-stage funds that have a very different focus. I will leave this with you to look at it in your own time when the presentation is shared and similarly on the Cushon study. But before I wrap up for questions, I really wanted to give you a sense of what we're seeing in the market. And I think this is a really interesting chart because this gives you a sense of the direction of travel. Yes of course, of the S&P 500 and a lot of commentary on the Nasdaq composite, which many have said, well, it's been on a great recovery. Tech has recovered. Why haven't we seen the private tech, fintech market recovery. And I think when you really kind of cut it apart, if you really strip out the impact of the FAANGs and you look at the global-listed fintech index, we're still bubbling along the floor of the low. So we haven't yet seen a recovery in that global-listed fintech index. And I think it is absolutely going to be an index where investors will be far more discriminate in terms of where they want to invest. But I think there would be some very interesting opportunities in the listed market as those longer-term winners start to really kind of outperform and demonstrate the metrics that the investor community are looking for. But we think that will flow through into the private markets as well. But what has been happening this year, and again, a very similar picture. If you look at the funding levels that we've seen in the market, it is fair to say 2021 was an anomaly year. We saw an extraordinary amount of capital come into the market from a lot of investors that were unfamiliar with the space. They were looking to hack what I would regard as venture capital. The criticism of venture was it doesn't scale. These are funds at hundreds of millions. They need to be billions or tens of billions and too much capital came into the market in a short period of time, and that distorted the market. And I would say very clearly that too many companies got too much money at the wrong valuation and created some rather unhealthy behavior in the market. That is really starting to normalize. I think the year that we're going through right now will be somewhat similar to what we saw in 2018 or 2019. But the average kind of funding rounds are starting to move back towards the historic norm. You'll see the ski slope there for the Series C. That is where we saw enormous market distortion, where multibillion-dollar crossover funds, sovereign wealth funds were looking to put a lot of capital to work in companies. And as such, to give you numerous examples of companies that we heard that were going out to the market, looking to raise $100 million, and then was said, well, what would you do with $400 million. And off they went and instead of raising $100 million at a $1 billion, they were raising $400 million at $4 billion. And I think that is still starting to work itself out in the market. And I think that will continue to work itself out over the next 12 to 18 months. But I think from our point of view, if you look at where we focus at the Series A in particular, and at that the Series B, that is really kind of normalizing back to the historic norm, and we think '24 will be somewhat similar to what we've experienced this year as well. But why should you keep the faith? Why should you keep invested in fintech as an asset class? And I think the exciting thing about where we focus is, one, this is an enormous market opportunity in terms of absolute size. There are few industries as big in terms of absolute revenue core, we're talking a $14 trillion, $15 trillion market. Secondly, this is a really attractive industry in terms of net margin. This is a profitable industry. There is a big profit pool as well -- revenue pool to attack. And at the same time, what makes us pretty unique is it has been an industry that despite the fact that it has created hundreds of very successful and scaled fintech businesses over the last 10, 20 years, it's still very early in the cycle. Every year, we look at the penetration of the core sectors within financial services, and we look at the penetration by disruptors and we are still in the single digit. And therein lies a huge opportunity, not just over the next 5 years, but over the next 10 years as well. And we expect fintech revenues to grow 6x to around $1.5 trillion between now and 2030. So there is a lot to play for. There are hundreds of businesses yet to be built or yet to be scaled that would deliver outsized outcomes to investors and it's our job as specialists in their space to unlock and uncover some of those gems that are being built at the current time. It's hard to give a presentation without talking about what the incumbents are doing because they continue to invest enormous amounts of capital into R&D, into digital transformation. And yes, they are getting better at that. But fundamentally, these are, in many respects, very large oil tankers that are very hard to digitally transform. They are multiregional, they have significant numbers of people, many of these incumbent financial services, businesses are built on legacy technology platforms. And so a lot of that capital is burnt very ineffectively. And so you see continued collaboration with the fintech community through direct investment through partnership and ultimately, through M&A. And if you think about M&A, I often get asked how important is the IPO market? It is largely closed at the moment, and we say, look, we want a vibrant IPO market. But fundamentally, if you look at the last 10 years and you add up every fintech exit, 95% has been through M&A rather than IPO. So this is an industry that has a lot of strategic buyers with very significant balance sheets and there is a lot of focus from the financial services incumbents across the globe on a lot of these innovative businesses and inevitably, many of the businesses that are built will get taken out because they pose competitive threat or they have built something that is hugely valuable for the incumbents who have tried to perhaps build it themselves, but are struggling to do so. So that is a trend that will continue. And this is why when you just look at the hard numbers, you can see the efficiencies, the economies of scale of leading fintechs, they do operate more efficiently at a lower cost, and that's ultimately their competitive advantage relative to these very significant businesses with very strong balance sheets. And we often get asked how can these fintechs -- small fintechs compete it because they can build these platforms in a very focused, nimble way. They're not blighted by the historical legacy and they are able to really make cut through in part. And you can see that in some of the success stories that we have, really interesting stat in terms of market share, where SME banking was an area that most thought was impossible to penetrate. And I think we've seen some fantastic penetration from challengers the likes of Tide, where we're an investor, and Starlink in particular, alongside Tide in the last 5 years, and they have taken a significant amount of that market. So what does that mean in terms of what's coming down the pipe? And you can see we see a lot in the market. It's our job as a specialist to sift through the enormous number of opportunities in the market, our specialism and experience allows us to make very quick decisions on a lot of these opportunities that come through that don't make sense for us for a variety of reasons. We don't think the market opportunity is big enough. We think the company is too early or we think it's too competitive a market or we just think it's a problem that the market doesn't want solving. These are all kind of good, valid reasons for us not to pursue and often don't take too much time to sit through. But it's our job to see as much as we possibly can in the market. And ultimately, when we do invest, it is a rare moment. We are saying no 99.9% of the time. Now that conversion rate is at record lows, and we give you a sense that if you look at the companies -- 28 companies over the last years that we would go into deep due diligence, you can see that the vast majority of those couldn't cut through one. Yes, of course, when you do due diligence, you uncover things that make you uncomfortable and you don't invest. On a number of them, we had very strong conviction about the businesses. We liked what we saw. We liked the management team. But at the same time, we just couldn't get there on valuation. And as I said at the beginning of the call, we need to get the right entry price, and we need to be rewarded for the risk that we are taking alongside having that conviction in the underlying proposition. So what's next? As I highlighted earlier, we are very thesis driven. We very much will sit there and take a topic. We will then do a deep dive, we will then map the market, and then we will go across Europe trying to find what we think are the most exceptional management teams who are trying to build something very differentiated and that then you can see both in the Payments and Insurtech space, the 2 businesses that we backed and the process that we went through. And before I finish, it's very hard not to give a presentation without talking about AI. It is definitely a topic that has had a huge amount of debate. And I think the one thing I would say is it -- there is an investment level in AI at the moment, generative AI is generating huge enthusiasm and interest. And I think in many respects, that's for good reason. But at the same time, it is not something that has just appeared out of nowhere. It is an underlying approach technology that many of our portfolio companies have actively been working with for many years, whether it's the likes of Tide and Zopa in credit underwriting or in customer service or in stand-alone businesses such as Intellis based in Switzerland, which is applying a very different approach in AI using neural networks. These are approaches and technologies that many of our portfolio companies have been actively using. So I think it presents a real opportunity for many of our underlying portfolio to be more efficient. It presents an opportunity for us as an investor to be more efficient, and we'll be spending much of the summer working with somebody that we're bringing into the business to help us look at the tools available to see how we can be more effective as an investor. And of course, from a fintech point of view, where does AI play a role? Where are those specific opportunities that weren't there 12, 18 months ago as a result of the huge progress in Large Language Models and we have 2 of the teams spending a lot of their time both researching and building relationships in that space. So as an investor, you already have indirect exposure to many of these AI technologies through your holding in Augmentum and rest assured, over the next 12 to 18 months, we will continue to work very hard, ensuring we understand the direction of travel. And when we feel that there is a compelling case to get increased exposure, we will look to take that on. And finally, what about the market? Is there capital? Yes. There still remains a very significant amount of capital. A lot of investors have been sitting on their hands. It's really important to differentiate private equity from VC. We are backing in a much earlier stage. Our business is not reliant on debt and largely, these are businesses that require equity for growth. So the industry is still well capitalized. We have seen a shift in what we would sometimes unkindly call tourist capital leaving the market. We think that's healthy. We want to make sure that we've got the right amount of capital, but the right type of investors who are responsibly deploying that capital at the right pace, at the right valuations in the right companies. And we have very strong relationships across the ecosystem where we co-invest with a lot of these long-term deep domain expertise funds, of which we are one, and so we feel that the market will be -- continue to be robust, but more measured over the next 2 to 3 years. So I'm going to stop there, I've taken 30 minutes. So I want to make sure we've got time for questions. So I'm going to stop sharing my screen. Hopefully, that worked.

That's great, Tim. Thank you very much indeed for your presentation this morning. [Operator Instructions]

Very good. Thank you very much. So I will order -- I will answer them in order. I think you can upvote them too if anyone wants to upvote them, but I will take them in the order that they appear on my screen. The first question from [ Robert ], what is the company's intention with regards to dividends? I mean, we are very much all about growth. This is not about delivering dividends. I think the one thing we have always said is that if we do have an outsized return, and we hope we will have in time, a phenomenal realization that delivers a very significant amount of capital back into the fund. And if we can't deploy that capital effectively, and we don't want to create too much cash drag then we will look to deploy some of that back to shareholders in a special dividend. So this is not about -- Augmentum is not a dividend-producing investment trust. But ultimately, over time, there might well be opportunities for those to be issued. But ultimately, this is about growth. We want to continue to grow. We think there's a huge opportunity for investors over the next 5 to 10 years in this space, and we want to make sure that we continue to scale and get access to some of the very best businesses and not shrink the trust unnecessarily. A question from [ Miguel ], does liquidation preference cause any tension at the investee level when things get tough, since not all shareholders equally? That's a very good question because you, of course, want to have shareholder alignment. But I think those companies that take venture capital recognize the dynamic that many of us invest with in terms of the structure. And I think it's a bit of a double-edged sword because arguably, in many cases, you might be getting a higher headline valuation because there is a lot of future growth. And I think you want to back founders with huge ambition, with huge capability in tackling a very significant market opportunity. So I think if they're going to sell that vision, then we absolutely want to make sure we have that downside protection. The early shareholders often are investing at a much lower valuation or in some cases, are employees that have been given options. So I think everybody's eyes open going in. And I think there's just a natural dynamic of taking venture capital money. But it can, at times, distort the dynamic. But often, I think it's kind of well understood and doesn't create too many issues. Have you found companies to invest in within the insurance sector? [ Nate Paul C.]. Well, we've looked at, I would say, well north of 100, 150 over the last 5 years and really struggled with a lot of insurtech propositions. The business-to-consumer market has been a challenge. If you look at European insurtech over the past 10 years, there have been very few, if any, Insurtech exits at $1 billion. And as such, I think you need to make sure, one, unit economics make sense and, two, that your entry price is right because there is a question mark at the price and the multiple of which you're going to exit. We've obviously just backed in Germany, a cyber insurance, hugely innovative cyber insurance platform called Baobab, an MGA which we think has a lot of scope of very significant growth. Of course, it's very early in its journey, but it's been a thesis of ours over the last 2 years that cyber insurance is a huge market opportunity in Europe. And a couple of our team have really scouted the market for those opportunities and have identified Baobab as one of those teams that have exceptional capability DNA in the insurance space, and hopefully, they can really kind of deliver on that promise. Response to Financial Reporting Council? [ Christian, BDM ]. I'm afraid I -- it's not something I probably can talk about because I just don't know enough about that. As I said, I think there are auditors who I think, do a lot of very good work in the private equity and venture capital space, probably best I don't answer that because we just don't have the depth of knowledge to give you a compelling answer. Given valuation compressions, where in the company life cycle you currently see most value? Would you consider investing in earlier-stage opportunities? Well, I think we've got the weight of the NAV nicked towards the late stage, 50% of the NAV is in an area of maturity within the portfolio where companies we could over the next 2 to 3 years, see exits. But ultimately, we really think we add the most value at the early stage of the Series A company. So seed is a tricky one because we recognized it's an area of the market where we do have capability. But ultimately, as a listed investment trust, it's a long-haul journey from seed to exit. And however patient our investors are, I don't think we can build a portfolio off a lot of seed businesses. So we'll continue to really focus on the Series A, and if any of you are entrepreneurs as well as investors in Augmentum or know -- or angel investors, and we always want to build relationships at the early stage. So a year or 2 before we invest, it's a great time for us to build those relationships and get these companies on our radar and for them to get to know us. So in terms of the valuation at 4.5x revenue, is that pre-discount to NAV so the reality, the true valuation taking account of discounted cash on the balance sheet is much lower than that. Yes. So overall, the portfolio valuation is very attractive versus the market. Well, that's for investors to determine. But yes, so in terms of the NAV, the NAV of GBP 294 million, if you look at the 4.5x, you strip out the cash and you take the top 10, which is 80% of the invested capital exactly, the average, the blended average across those, is 4.5. So when you apply the discount, of course, you get to a much lower number. Were the largest reductions on your portfolio assets from the crypto assets, does that reflect the crypto market rather than the underlying businesses? Are you still confident with the crypto infrastructure assets? Yes, another good question on crypto, [ Jonathan ]. Yes, I mean, look, it's our thesis on digital assets has been, one, as a forward-looking fintech, we have to have some exposure to digital assets that we believe will last test time. I think you've got to strip out the wildly speculative crypto assets, which we have very little interest in at all. We have backed businesses that we believe will provide the institutional layer for the long term that have an approach that we believe is fitting with a long-term credible approach in the market. So those understand the importance of regulation, that want to service and provide opportunities and solutions to blue chip institutions, and that is why we've made the bets that we have. If you look at them today, we -- they've not been successful from a valuation point of view, and we have written them down. And we'll see how the market develops. We recognized we're in crypto winter, but this has been a much needed correction in the crypto market. There have been a lot of bad actors in the market that haven't operated with the integrity required if you are building a fledging market. But that's something we've seen in many other industries. I was involved in the very early days of Vector, back in early 2000, and we saw a lot of unregulated betting companies acting irresponsibly and ultimately behaving in a way that we have seen many of these crypto companies that have gone to the wall and over time, the industry regulated. And the winners over time really came through and those that played the long game have really been rewarded. So I think we see a lot of similar dynamics there. And I think we'll carry on seeing a shakeout in that market. But the underlying technology in the industry. There are some extraordinary compelling propositions, hugely talented teams that are trying to build solutions in particular in the financial services space that will increase transparency and efficiency and reduced cost. And I think those are the types of propositions that we think are really exciting, and we'll continue to follow those. If most of your assets are valued on public market comparables now, why is the 4.5 revenue multiple low in the public market comparatives? Well, again, it's not apples and apples. Every business is valued differently. So that is the blended average. And so you've got to look at the global fintech index and a lot of different businesses in there. And then you look at the underlying portfolio, and there are businesses that can be valued on SaaS. There are businesses that will have comparators in banks or businesses in lending. There are businesses in digital assets. Obviously, there's a smaller subsection but coin based is trading at a very low multiple. So yes, you can't directly correlate 4.5 to 6.5. It just doesn't work, but it's a pretty good indicator. And as I said, I'd rather err on the side of conservative than anything else. And I think we can say that yes the portfolio is valued fairly, at the current time, and it's a very good benchmark to -- and sense check to look at the public markets to see where it's at. But I think you can directly compare and say we should be at the same level there. We might well be higher depending on the basket of companies and the stage that they're at and the types of sectors over time than the public market, but there shouldn't be a huge anomaly on the upside in that regard. Can you say more about this new cyber investment? Yes, so it's important to say it's an cyber insurance platform. It is based in Berlin, they -- the company is called Baobab. They're a Series A business, so right at the start of their journey, they have deep domain expertise in the insurance space. So the 2 founders have built and sold insurance business already, and we really like backing founders who've been there and done it before, not that we won't back first-time founders, but certainly it's usually attractive to back founders that have gone through the journey before. And I think if you look at the market opportunity and if we think about cyber as a proposition in the days of old, generalist insurers would package it alongside the general business insurance. And clearly, times of change, cyber is a significant market risk and it's a lot harder for generalist insurers to be able to issue insurance specifically for the rest because it is -- it requires a very specific skill set to understand that risk. Baobab are really targeting the small business market initially in Germany. And of course, they're looking to extend that internationally. They have a partner in Zurich, it's one of the biggest insurers as well who provide that insurance cover, but ultimately, Baobab that is providing the expertise and capability and risk assessment to do that. So Baobab is the company, so do have a look, and it's an area where we think specific cyber insurance premiums in Europe over the next 5 to 10 years will grow exponentially. So it's an area to watch and one in which we think is an exciting part of the market to keep a close eye on. And hopefully, this is a company that can grow and deliver on much of that promise. So I'm going to take breathe there, and pause and I think I've answered all the questions. So thank you all very much for taking the time this morning. I hope that shone a light both on the underlying performance of the portfolio, the market more generally and giving you a little bit more depth on some of the challenges and opportunities that we are facing collectively across the portfolio and look forward to keeping in touch. And if there are any other questions, then do feel free to e-mail me, I'm very happy on tim@augmentum.vc. And if I can't answer it, then I'm sure some of our team will as well. And I'm sure the Investor Meet Company team will share this presentation if they haven't already with you. Thank you very much.

Tim, that's great. Thank you once again for updating investors today. [Operator Instructions] On behalf of the management team of Augmentum Fintech PLC, we would like to thank you for attending today's presentation, and good morning to you all.