Molten Ventures Plc (GROW) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the Molten Ventures annual results presentation for the year ended 2025. We're really glad to have some people here with us in the room and also many joining us online. I am Ben Wilkinson, CEO of Molten Ventures. And I'm joined here today by Andrew Zimmermann, our CFO. I'm just going to move through a few of the slides on the presentation. One second. Sorry, my slide clicker is not working. Give me one second. There we go. That should be better. Thank you. Let's try again. So yes, I'm joined by CFO, Andrew Zimmermann. And today, we're going to take you through a bit of an overview from myself. Andrew will then take us through the results, and then we'll finish off with a refresh on our model and a bit of the portfolio movements as well, and then we'll move to an outlook section. So to start with, I think very pleasing to say that we've got a good set of results, characterized ultimately by very strong realizations in the year. The realizations in the portfolio have been a theme throughout the FY '25 period and we've been able to demonstrate 4 key significant realizations. And post period end, we've continued with that momentum also. The reason why those realizations are important to us is one, that it proves the underlying value of the portfolio when we're selling those companies above the holding value in the books; two, that it shows the ability for us as a firm to demonstrate that portfolio management that we have, which is a skill set that's very prominent at Molten, something that we're consistently demonstrating; and then finally, it demonstrates our ability to turn companies in the balance sheet to liquid cash, bring that cash back to the balance sheet for recycling and being able to put to work our capital allocation policy, which we outlined during this year as well, and we'll cover a bit more on that policy. The robust portfolio performance was another key feature in the year. I'd like to characterize this over more like a 3-year horizon because as the markets turned in that period, FY 2022, what we found was technology valuations reduced as interest rates moved higher, that then moved us to reduce the value of our portfolio. And then over that subsequent 2-year period, we were really protecting the value of the portfolio, making sure that the capital was being allocated in a judicious way, pushing our companies to be more capital efficient in their own growth and then making sure that, as we can demonstrate now, we can turn those companies back to growth. And we seeing growth in the NAV in this period is the confirmation of that 3-year journey that we've been on. And it's been a tough environment for many companies in the market, including ourselves, but I think it's helpful for us to be able to show how our business model operates through different cycles. So that's very much a positive. And those companies that are in the core portfolio, demonstrating maturity with over GBP 400 million of average revenue now and many of them turning to profitability as well. We're well positioned with our strategy as we had a change of CEO in the year, with myself moving from CFO; and then Andrew here, moving up to CFO, my previous position. We've refocused the strategy of the business, and we announced that in February at our Annual Investor Day, and focusing our strategy on some key goals, which we'll just remind everybody of again now. Really, of course, first point to address here is shareholder value. We want to ensure that we can drive not only the growth in the NAV, but the growth in the NAV per share and then driving the share price to match that. That's clearly the primary focus of what we do, why we're here. And to achieve that, we want to be able to focus on the areas of the market where we have a differentiated return profile. And where we see that is in investing in Series A companies at the earlier stage, but principally also at the Series B stage where those companies are growing and scaling and demonstrating that they can compound that growth over time. And we think the Series B stage is really the correct intersection between the risk capital you put to work, the skill set that we have at Molten of helping businesses to grow and scale and also the demonstrable track record the companies can demonstrate with corporates that they've been having as customers. So it allows us as we go into these businesses to diligence those companies and diligence to the customers that are buying the products. Alongside that, preserving the balance sheet is clearly a focus. It's something that we've been able to demonstrate over the last few years, has been crucial having liquidity to support our best companies with their continued growth, but also to support companies to an ultimate exit and drive the right level of value. That's an important feature, and you need to have liquidity on the balance sheet to achieve that. But alongside that, you need to be creating vintages. And what I mean by creating vintages is investing through the years of the technology markets and not being in and out of the market. Technology moves very quickly as we're seeing currently with AI, and you can't be outside of the market and not investing in the companies that are going to be the leaders of tomorrow because what we are then seeding is the growth that we're going to be harvesting in 2, 3, 4 years' time. So through this presentation, we'll talk a bit more about that vintage creation as well. Building capital pools is our other key pillar of our strategy. We already manage PLC balance sheet, which is the principal capital pool that we talk about here. Alongside that, we have EIS and VCT funds with around GBP 400 million of AUM from those strategies. And then we have some further third-party strategies that support that. What we want to do is to continue to build out those third-party strategies, particularly at the Series B stage where there's deeper pools of capital required, and that allows us to co-invest into the same deal flow and really make sure that we can be one, consistently deploying capital in the market; but two, making sure that we attract the best companies to be invested in by Molten. So with that, I'm going to hand over to Andy to take us through the numbers for the year and give us a bit more detail in the underlying movements. Thank you.

That's great. Thank you, Ben. So good morning, everyone. Last time I was standing up here, I was presenting the interim results as interim CFO, so I'm pleased to say that today, I'm presenting the results as CFO, having been appointed in January 2025, which I was obviously very pleased about. I've been working with Ben and the team here since 2023, and I'm looking forward to continuing to move the business forward. So let me get on with presenting our annual results for the year. So let me start by saying that I'm pleased to share these financial results with you. The portfolio has delivered a fair value uplift. We've generated strong realization proceeds. We've maintained investment into our exciting portfolio so that we maintain the vintages, as Ben alluded to. We've enhanced the NAV per share returns with share buybacks and we've managed to do all that while still supporting a robust balance sheet. In terms of the fair value growth through the year, it was GBP 72 million or 5%. That was comprised of GBP 180 million of valuation uplift, net of GBP 108 million of valuation reductions. And this fair value uplift was partially offset by adverse FX headwinds of GBP 22 million. In terms of the valuations with the uplift, market-leading companies still command a premium when raising capital, but there has been some softening of technology sector, public company multiples, which reduced some of our portfolio company valuations. So our GPV ended the year at GBP 1.4 billion and our NAV at GBP 1.2 billion. They are both very slightly down on 2024 despite that net fair value uplift. And that's because primarily of realizations exceeding investment, with the deployment of some of those realization proceeds flowing out as share buybacks rather than back into all the new investments with our balanced capital allocation policy. Realizations for the year totaled GBP 135 million, has been well trailed by us far exceeding the GBP 100 million guidance that we set for the year. That included exits from M-Files, Endomag, Perkbox, Graphcore and a small partial realization of Revolut in a secondary deal that was led by Revolut. And again, I would just highlight once again that all these exits were at or above holding value, which provide proof points of our valuation process. During the year, we invested GBP 73 million into the portfolio, and I'll come on to that in a bit more detail on another slide shortly. And in addition to that PLC, GBP 73 million, we also invested GBP 34 million from our EIS and VCT funds. We also completed more than GBP 15 million of share buybacks in the financial year, and we began a further GBP 15 million share buyback program in March 2025, which is still ongoing. And as of today, there's about GBP 6 million left of that program still to go. We implemented this balanced capital allocation policy because we recognize that the current discount level between our share price and our NAV does make buying our own shares an attractive value-enhancing proposition. So we've ended the year with our NAV per share at 671p, which is up from 662p last year-end. We have a strong cash position with GBP 89 million at year-end and a further GBP 30 million subsequently received from the realizations of Freetrade and Lyst. And in addition to that, our managed EIS and VCT funds held a further GBP 23 million ready for investment. And also on top of that, we have an undrawn RCF of GBP 60 million available, should we need to draw on that. So after a difficult couple of years in FY '23 and '24, it's pleasing to see some recovery and growth in the portfolio valuations. We target annual returns of 20% through the cycle. And as you can see from this chart, we've delivered an average annual return of 28% since IPO. After the strong growth in '21 and '22, we were quick to bring valuations down in '23 as economic conditions too could turn for the worst. And then in FY '24, the situation stabilized a bit, albeit still a very difficult market environment. But there was a fair value uplift in H2 of '24, and that's pleasing to see that has continued in both H1 and H2 of FY '25. Obviously, we never want to call the bottom of the cycle, and there's a lot of ongoing geopolitical and macro uncertainty in the world. But we are really positive about our portfolio and the prospects for that going forward. Really, the key message for this slide is that our experience and our expertise as a firm means that we can manage through the cycle even in difficult conditions. So the realizations history tells really a similar story to the previous slide. Obviously, we need to generate that fair value growth, but we then need to turn that to cash at the optimal point for each investment. For realizations, we target an annual figure of 10% of the portfolio value through the cycle. But you can see from the chart again that since IPO, we've delivered average annual realizations of 15%. Again, a similar pattern where there is strong levels of proceeds returned in FY '21 and '22 when the market was at its peak, then with a marked slowdown in '23 and '24 as conditions changed and exits became more difficult. FY '25, however, we're pleased to say it was an exceptionally productive year for realizations. And post year-end, that has continued with the GBP 30 million received for Freetrade and Lyst. So again, this slide demonstrates our ability to manage this in the portfolio through the cycle. And generating these realizations are key, obviously, for our balanced capital allocation policy, both to invest in vintages for the future winners in the portfolio and also to return money to shareholders through buybacks and enhance return that way. I would encourage you also to have a look at the annual report and accounts, a very lengthy document. I know, but there's a lot of good stuff in there. There's a section in there written by Richard Marsh, our Chief Portfolio Officer, on realizations in particular, and really how we differentiate ourselves and add value with this process. So I would encourage you to have a look at that. So the PLC deployed GBP 73 million into investments during FY '25. And again, I would encourage you to look at the report in accounts because we have a lot of detail on our portfolio companies in there. And for each of the new investments we've made and the follow-ons, we've put in something there called why we are excited about this investment, which I think is really important for people to understand because if we can get that excitement over to people, they'll understand that and appreciate the investment in Molten. Ben will talk a bit more about the model and the investments later. But just to call out a few examples in each of the time. So in the new deals, we did a Series C investment into Deciphex, which is an AI-powered leader in digital pathology. It's transforming patient care because it allows pathologists to work about 40% to 50% faster across geographies, maintaining diagnostic accuracy, so massively efficient by making a real difference as well. In the follow-ons, we did GBP 20 million to support the scaling of our existing portfolio companies. And the example I would call out here is Manna, a drone delivery company. Those of you that know me know I love Manna. I've always gone about it, not just because I love takeaways. It's actually a really exciting business. They've done 165,000 deliveries to date now from 2 live hubs in Dublin and Helsinki as they prove out their model and their unit economics, and they're now really poised to scale. They've signed major commercial agreements with DoorDash, Just Eat, and they announced another one with Deliveroo just the other day with a nice Deliveroo-branded drone. So an exciting business. The secondary investment last year was Connect Ventures I, which was done just before the interim. So I covered that really at the time we talked about it. But just by way of reminder, that had 2 key stage later SaaS assets, which were Typeform, which is form building software, and Soldo, which is spend management software. And then finally, we've invested GBP 19 million into our earlier-stage fund-to-funds program on EarlyBird. I know these investments are important in terms of our balanced allocation to different investment types because they feed the pipeline of future winners in the portfolio. So this is our movement through the year split into the 2 halves. As I said earlier, it was pleasing to see a fair value uplift in both H1 and H2, and we'll come on to some of the key portfolio company movements in the next slide. Just to point out the ups and downs. As a European VC tech investor, we obviously have a fairly large FX exposure in euro and USD valuations of portfolio companies. So there was an adverse FX movement in H1 in particular, H2 worked slightly in our favor, which partially offset the gains. But in terms of the GPV progression, year-to-year, again, you can see that exceptional year for realizations. Our exceeding investment has meant that we're very slightly down in terms of GPV despite the fair value uplift. Okay. So this is the fan. I like this fan as a good way, I think, of visually representing the portfolio. This is the core. We've changed the scale slightly this year because Revolut's growth was so large. It was making the right-hand scale look a little bit too small. So we've clearly differentiated them, but it makes it look a bit better. So in terms of the key movements, in terms of the main downward valuation that was Thought Machine. Again, we took really most of that in H1. In H2, there was actually a small fair value uplift in Thought Machine. We talked about it at the time, but the story was really just to do with timing of them getting their contracts live. They're signing Tier 1 clients. Obviously, core banking software is fairly complex. So it takes a bit of time to get those clients live and to generate the ARR. But they're still signing Tier 1 clients. They announced Bpifrance the other day, and we still expect them as that goes live, the ARR is very lumpy and that valuation should come back up. The main movement upward is obviously Revolut, which everyone, I'm sure, is familiar with. It's continuing to grow really strongly, more than 50 million customers, #1 finance app in 19 European countries, revenue over $3 billion and profit of over $1 billion. So we've taken the valuation this year up to $45 billion, which was in line with the secondaries that were announced in the market. And so that's now just under GBP 160 million of our portfolio. Ledger was another mover, a crypto wallet hardware and software business, really strong revenue growth, both in terms of hardware and software. The crypto wallets are sort of Apple-type designed. I think it's Tony Fadell who worked for Apple, has designed really nice products, work really well. They've been selling really well. Importantly, the software that goes with them is being well used as well. And so their revenue mix is improving, and the crypto tailwinds post the U.S. election and that kind of favorable sentiment towards it is obviously helping that business as well. And then probably the other one to call out is Aircall, consistent revenue growth. It's profitable now. It's making further AI-driven enhancements, which should boost the product. So again, all really good news on the portfolio. So just to end before we go back to bed, I would say, Ben, sorry, I'd like to go back to bed. Freudian slip there. Not used to these early starts. So yes, there is a wellness room through there, so I might go and have a lie down afterwards. So looking ahead, we're positive. We have an exciting, resilient and diversified portfolio, which has delivered a fair value uplift and an increased NAV per share in a challenging environment, with strong level of realizations, returning capital to the balance sheet, and we've taken a disciplined, balanced approach to that capital allocation, including share buybacks. So that's the financial results. I'll hand you back to Ben now to talk about the model, the portfolio and the outlook. Thank you very much.

Thank you, Andy. Very clear run through of the movements. And I would echo your sentiments about reading the annual report. A lot of work that goes into that, but also a lot more detail on the portfolio of companies. We think that getting across the excitement of those portfolio companies is something that we feel very strongly at the Capital Markets Day when we were able to present. So trying to get that to resonate through the year in the Investor Relations materials is something we're trying to achieve as well. So I wanted to touch on a reminder of our model and a bit more of the detail of what drives the portfolio. Andy has gone through some of the specifics of the companies, but I'll touch on a few of the underlying attributes as well. In terms of our model, as I mentioned, several pools of capital, that's important because raising individual pools of capital, still venture capital can be quite challenging. So actually pooling those investments together to get the right scale of capital for new company deployment, new investments into businesses is the right approach. At the Series A stage, we do that with the VCT money for U.K. qualifying companies. At the later stages at the moment, we just have PLC capital. So we'll look to build that Series B investment capability with other forms of co-investment capital alongside. We then invest directly into companies, which is obviously a proven model that we have and proven over many cycles. And then we'll use other forms of investments. So we'll go through fund-of-fund positions where we'll become an LP in those funds to get exposure principally to the earlier stage of the market, which is a different risk profile. It's a different skill set, but also you need to have geographical presence to get exposure to those very early-stage businesses. So that gives us a network across Europe that can be our direct deal flow for the coming years for those companies that scale and grow. And then finally, we have a secondaries platform. And what secondaries allows us to do is to buy later stage either portfolios or businesses as we did with Connect Ventures in the year or directly into companies themselves that have already proven out their maturity. That gives us the ability to turn those companies to cash in a shorter time horizon than we would have with our direct primary investing, but also you can see the trajectory of those companies. The winners in technology often compound growth particularly in years 10 to 15 onwards. And it's that compounding and winning a market share that gives you the upsized and outsized returns. We then support those companies that we do invest in. That's an important feature of the model. Andy has touched on some of the work that Richard has written about in the annual report from the realization perspective, but there's also sessions we've run this year talking about the support we'll give to the portfolio from the perspective of sitting on their Boards, helping them to build out their management teams through hiring of skilled individuals, but also their go-to-market strategy is helping them to work out the best routes to market, pricing plans and building sales teams. Those tend to be the key areas that we spend a lot of our time on with these companies. And it's a skill set that is beyond just putting in capital. So investing in those companies is one aspect, but then making sure that they can grow and scale through the benefit of our broad network, but also our years of experience is a key feature. And then finally, touching on that point of realizations. It's been an important feature of the model throughout the Molten journey. I think in the public markets, our ability to demonstrate consistently those realizations is arguably even more important because it proves the holding value of the NAV and then also then infers on the share price. So the fact that we've been able to bring back GBP 660 million to date over 9 years really shows that we can turn that value into cash. Touching on the return profile. Portfolio construction is very important. It's a risky asset class, in the sense that some of the companies you're investing can go to 0s. And it's important that we explain those percentages of invested capital and how it bifurcates across the different segments of returns. The fact that you build a portfolio and in venture the portfolio skews to the winners is very much demonstrated on our track record of returns. The GBP 466 million of value that's come back in those winning companies is being delivered from around 30% of our invested capital. So that just goes to show you that the ability to stay in those companies, run your winners, double down on them as they grow and scale is equally important. But what is also true is we're delivering over GBP 150 million of value back from managing that portfolio, managing those middle-stage companies that maybe won't deliver the big upsized returns that you need in venture to drive your growth, but they are good businesses and they're valuable to somebody. They have underlying IP, they have underlying strong margins. And so we can often get value for those companies. But it's in that segment that a lot of the work will be needed to make sure that comes to fruition. And I touched earlier on the importance of vintage creation. I think this slide clearly demonstrates the years that we've invested in certain of the core companies. So we've shown 2016, 2018, 2020, 2022 from the vintage creation of investing in these businesses. And I think the 2 points to take out here are the timing of when we've invested in those companies. You can see with Ledger, that was an investment that we were making in 2016, 2017. So we've already been invested in that business for a good period of time by the time it hits that maturity and starts to hit that scaling that we're seeing now as a core company. And we'll go into a bit more detail on Revolut and Ledger in terms of their case studies in their journeys. But you can see that it is important to stay in the market. It is important to be investing in new technologies and new themes. And quite often, by the time that we're talking to the investors about them as core companies and the markets are talking about these subsectors of technology as being ubiquitous, we've invested in those companies 5, 6 years previously. That's the time when we'll be looking at those new technology trends to get our access and help them to grow into the core companies of the future. We've also done some work in the past year talking about the segments that we invest in. We are a generalist investor. We've always talked about 4 core areas of investment in terms of consumer technology, enterprise technology, digital health and also deep tech and hardware. But we recognize that, that broad grouping glossed over some of the underpinning of the subsectors of technology that we get access to. And within the core portfolio, we have over GBP 800 million of value. And in the emerging portfolio, there's another GBP 500 million of value. And this is quite significant, I would call it, relative scale, still not scaled to the extent that we should be, but certainly, within the market, there's a lot of underlying value that's been invested. That's ahead of our market cap. It's about GBP 840 million of invested capital underpinning that GBP 1.4 billion of value. And if you look at the subsectors that we've been investing in, there are all the domain themes that people would want us to be exposed to, that they want to be exposed to the next generations of quantum technology. The AI that underpins across all of these segments that we want exposure to and space technology has become particularly prominent in the last few months with companies like ICEYE providing low earth orbit satellites and Earth observation. Cryptocurrency and blockchain, Ledger, as I explained, we invested in, in 2016, 2017 as those thematics were coming to fruition. And so getting exposure to those is an important feature for us as a technology investor, but also for our shareholders and our investors to make sure that they can trust our teams to get them exposure to those most exciting themes. Touching a little more on the breadth of that portfolio. We've added a bit more detail again in the annual report and here in the investor presentation, where we're trying to pick out a little bit more of the features of the emerging portfolio, with the core demonstrating its maturity now and its strength, we're wanting to shine a bit more of a light on the underlying investments that we've made. And of the GBP 500 million that sits in the emerging portfolio, GBP 300 million of that is directly into companies that are going across each of those themes that we've just touched on in the previous slide. And the top 15 of those companies are growing over 100%. And that's the kind of growth we would expect to see for the stage of those businesses where they're scaling, they're getting their customer tractions coming through. And then if they're compounding that growth, that's how they can quickly build to maturity. And you can also see that there's a good split of enterprise, consumer, digital health and deep tech across that emerging portfolio. So a very consistent thematic spread as well. I think when you look across the market and you think around the portfolio value and you see that the core is demonstrating maturity, and it's in 17 companies that you can get comfortable with, there's over GBP 800 million of values out there. When you look below at the emerging, that's our job as Series A, Series B investors to put that capital to work and build on the themes that in 3, 4, 5 years' time we'll be talking about when I stood here as the emerging technology themes and the new core companies. And you can see that although we're a generalist investor, we have deep domain expertise within our team into each of those subsectors. And that maturity of the core is demonstrated here. Some of the growth is slowing as those companies are growing from a higher base. The average of GBP 400 million of revenue, 70% gross margins, still growing at 35%, 36%. I think if you put those stats into a public company arena, even in the slightly depressed London markets that we find ourselves in, you could see that we have a lot of value in these businesses already. The average holding time that we've had them is 5 years, but the average age of the company is 11 years. And that's even with companies like Revolut, who have gone very quickly, which we'll touch on in a minute. But that shows you that this 6 years of growth in those businesses before we start to invest in them as an average here. And I think that's a compelling feature of why we go to invest at Series A, Series B because you can start to see the traction, you can start to see the proof points before we'll put our capital to work. And 44% of those companies now turning to profitability as well, which, again, just another demonstration of that maturity. So in that interest of trying to shine a bit more of a light on the portfolio and how we create value, we've got a couple of case studies here, the first one being Revolut, which has garnered a lot of attention, a lot of excitement and rightly so, their growth, as Andy outlined, they're still growing at 70%, even now delivering over GBP 3.5 billion of revenues. But at the time that we put our investment to work in that 2018 period, the business was showing very strong growth. You can see on the chart here that we had revenue GBP 195 million in 2018 when they raised their Series C and valuation of GBP 1.7 billion, so around an 8x type multiple. But at that point, the business was gross margin negative. So for most investors being able to see that trajectory of growth, but understanding the underlying product suite and understanding the market opportunity is absolutely key. You can't really invest just purely on the numbers. You've got to have a vision of where these businesses are going to move to. And you've got to be able to back the teams to solve the problems that they'll encounter along the way. And I think we can fairly say that Revolut have delivered on that, that they've grown the capital base. They've grown the customer base. And in 2021, with the Series E at a $33 billion valuation, that was clearly reflecting the market at the time. They raised capital at a good price with revenue still then just under $1 billion, around $800 million of revenue. But what they've done is they've compounded growth, and so the business we see today is scaled year-on-year and compounded that growth so that now it's over $3.5 billion of revenues, demonstrating a multiple that's in line with public market peers, and getting a valuation that's appropriate for where the business is. And in fact, growth continues into the subsequent years, clearly, they'll be demonstrating themselves as one of the largest businesses, which likely to go public. But I think if you look at that chart and consider the investment decision point and then the delivery of that company over several years, by the time we're sat here now and everyone's rightly saying Revolut is a great business, it's at scale, it's got a proven model, it's likely to be the market leader, then we've already had to take that bet, if you like, that assumption, 7 years previously. And when you're doing that, you need to play a portfolio because clearly, not all of those will come to fruition. But the ones that do, you hold them and you can create that value accretion over time, and that's how the venture capital model works. We touch on Ledger in a similar way. The stats here are showing not their revenue, but our holding values and their product range that's expanded over time. Andy touched on the fact that they're building software alongside the hardware model that improves their margins. It improves the stickiness of their revenue and also the multiples that the business will get valued on. And it's grown at scale. It's had ups and downs with the Bitcoin and cryptocurrency markets, but it's addressing those markets in a significant way in the security layer. And it's another example of how we like to invest in those technology themes by investing in the infrastructure that unlocks those themes, we're able to play those upsides and downsides with a degree of security, but ultimately betting on the fact that cryptocurrency and blockchain was a technology that was here to stay. And now it's become more institutionalized. It's more regulated. It's becoming more ubiquitous. So we're seeing that scaling point that's been starting to come to fruition. But again, this is in a company that we invested in over 7 years ago. And that value that's coming through in the core now is really accelerating as they're growing out their business model and as those markets are maturing. So I just wanted to finish the presentation with a look ahead to the current year. We've had a very strong start to the year already, continue the realization themes that we've touched on from the prior year with Freetrade realizing one of the core companies, and also Lyst that's brought GBP 30 million back to the balance sheet, so increasing our liquidity and increasing that financial strength. Andy has touched on the fact that we have the ongoing buyback program. We have another GBP 6 million roughly to go. That's clearly supportive to the NAV per share. And as we get more realizations coming through, what we said as a Board is that we'll continue to monitor the level of those buybacks. Clearly, we're trying to close the discount of our share price to the NAV. We've proven that the NAV is robust. We've proven the portfolio is very attractive and we've proven our ability to manage that through cycles. So I think we're really looking at a timing difference here, hopefully, with the public markets, seeing more liquidity coming through. And one of those points of liquidity is obviously global funds flows, but also some of the announcements the government is making in terms of Mansion House, promoting capital into the private markets. And then hopefully, we'll see similar measures coming into public markets as well. But our continued focus that we have on those strategic priorities is the parts of the business that we can control. And as a group, we want to make sure that we have the best team investing in the best companies and making sure that we manage that portfolio well and that we're good custodians of the capital that we raised across all of those different pools. So the investment rationale for Molten we think is clear. We think that buying a share in Molten gives people access to a part of the market they can't access themselves. It's a part of the market that requires skills to manage investments over time, and we can give people access to that with daily liquidity through the share price of the PLC. So we think this is a very compelling structure. The evergreen balance sheet allows us to hold our winners for longer. We've touched on why that's important in the portfolio creation and the value creation model. And having pools of capital allows us to manage those different pools across different periods of time, but collect those pools together for investing in the right companies at the right levels. As Europe scales from a venture capital perspective, the depth of capital is increasingly important. And being able to lead investments into the best companies require you to have that depth of capital to put those tickets to work, but also to do that consistently to build those portfolios. So that disciplined approach to capital, making sure that we can look at every opportunity to put money to work, be that in a new growth opportunity, be that in a secondary that we're purchasing at discounts or be that into capital allocation back to buying our own shares, we all look at those equally, and we look at the best opportunities to put value to work, both for the short term in terms of our share price, but also for that longer-term vintage creation. So we'll just wrap up and say thank you. We'll move across to questions.

I think what we'll do is start with questions on the floor here first, and then we'll move to any that we'll have online. Maybe, Shannon, if you don't mind starting the mic on the front, and we'll work backwards, if that's okay. Tintin, if you'd like to go first.

Tintin Stormont from Deutsche Numis. A couple of questions for me. In terms of new investments and the valuation multiples, when you're looking at new investments at the moment, if you compare that, say, a year ago, 18 months ago, how have multiples moved? Obviously, probably AI investments has to be taken separately. But just generally speaking, if you could give some color on that. And then secondly, in terms of availability of capital for the companies, how much sort of kind of competition are you seeing sort of kind of in the current environment versus, say, a year ago? And in terms of the investments you're planning this year, particularly on follow-ons and your new investments, do you feel that sort of you're still a little bit hamstrung? Or do you feel like actually the level that you've kind of penciled in as it were, would be enough for the strategy?

Yes. So touch on the market a little first. Certainly, AI, you have to look distinctly. I think all the stats show that anything with an AI wrapper is getting a roughly 30% premium in terms of pricing. Clearly, those companies are growing very rapidly. So you can offset the pricing, if you like, with the growth when those companies deliver. Overall, I would say that pricing has remained fairly static to prior year. The pricing is a feature of, one, the scale of the company, its revenue and its growth that's projected, but also the dilution that the business is taking. So how much capital is it raising? I think we're definitely seeing businesses become more capital efficient and therefore, raising less capital than certainly 2, 3 years ago. Also making those rounds last longer, so probably more like an average of 2 years before they raise additional capital. Maybe in a periods where capital was more available, we saw 12 to 18 months around cycles, now more like 2 years, I would say. But pricing is probably reasonably static. We see competition for the best deals always. And that's the feature of the market and always will be, and that's very healthy. But we're being very disciplined on our own pricing. So we will let deals go if we don't feel we're getting the right pricing. And clearly, there's a trade-off to that if the companies execute and perform well, then pricing, as you see with Revolut on that case study, pricing doesn't look that crazy when you go 1 year on, and they've delivered. So it's always about that trade-off of being disciplined on the pricing, but making sure you're getting into the businesses that are growing and scaling and executing. In terms of our capital and the kind of market depth, Europe invested about GBP 66 billion last year, which is probably equivalent to maybe 3 years ago, not the peak period of '21, '22, but sort of maybe '19, '20 and then subsequently. So it's showing a depth of capital. What is true is that, that capital is skewed to some big rounds and maybe less companies receiving the capital they need. When I look at our position in the market, particularly at Series B, you want to be investing GBP 15 million to GBP 20 million for a lead ticket. And if we're building the right size of portfolio, we'd probably want to be doing around 6 new deals a year in that ecosystem. So I think with the roughly GBP 90 million that we've invested or will invest in the coming year, we're probably about half the level of capital that I think we could be for the size of the market. However, that's still plenty in my mind that we're going to get access to good opportunities. It's just about us being disciplined with the allocation of the capital.

It's Conor Finn from Barclays. A quick follow-on to that. In relation to the third-party capital, can you give an indication of how well progressed you are on discussions in terms of raising that? You mentioned obviously LTPS at the CMD. And should we expect, say, some of that within transactions this year?

So it will be a long-term horizon. It's something we're spending time on and have been for over a year or so in terms of conversations, what we have been exploring is the right vehicle to do that within, whether that's a GPLP structure or an LTAF or that sort of capital vehicle that would be underpinning that. And there's different pockets in the market that are more attractive to different vehicles. I think it will be a longer-term horizon to raise that money. The most near-term third-party structure that we have in place is Molten East, which is a fund which we'll raise, we think a first close around EUR 100 million. Hopefully, within this financial year is what's being targeted, and that's a team that's focusing on the Eastern European development centers, development talent. And that companies themselves could be incorporated in the U.K. or could be incorporated in Western Europe, but it's where the developers are situated in places like Turkey, Poland, Estonia and such like. And we've seen quite a lot of companies come out of those regions. They're very capital efficient, usually and also product-led growth is a driver for those businesses. So the team behind that have been working for a couple of years behind the scenes to get that raised. So hopeful we'll see that this year, which will deliver roughly EUR 100 million as a starting position in terms of that first close. But I think the institutional capital at Series B will have to be at a bigger scale, and so it will take a bit longer to pull together.

Great. Will Larwood from Berenberg. Just a couple from me. Just in terms of the split of investments, sort of what's going to be follow-on, what's going to be direct secondaries Fund of Funds for this year. And then just another one on the secondaries piece. Obviously, you acquired fund last year. What's the typical time frame for that to be realized?

So in terms of the split of capital, follow-ons for the last 2 years have been around GBP 15 million to GBP 20 million. And we consider that as maybe, say, defensive follow-ons. So giving businesses capital usually to move them towards the next part of their journey, be that raising a new round or be that an exit in the case of the realizations. So we think we'll do a similar amount this year. When we think around positive follow-on capital for businesses that are scaling, we see that capital competing with a new deal. So mentally, we put that into a new deal bracket. We will have probably about GBP 15 million going into Fund of Funds and into the Earlybird positions and then a similar number to last year in terms of secondaries. So probably another GBP 15 million to GBP 20 million going for new secondary opportunities, and the rest will go to primary capital. You had a question then on the secondaries themselves. The time horizons of those tends to be around within 3 years. Obviously, it's specific to certain businesses. When you're buying a portfolio of late-stage assets, you're normally saying 1 or 2 of those will be the lead assets. Those are the ones that you want to price and put value to, and then the rest of the portfolio somewhat comes alongside that. But usually a 2- to 3-year horizon is when we'll look to turn them into capital. We've seen that work out with companies like UiPath, which listed, obviously, also with TransferWise, now Wise, which went on to list, and that same horizon is comparable to say a primary deal where we probably have an average hold of 7, 8 years.

Patrick O'Donnell from Goodbody. Just a couple for me. On realizations, obviously, you've had a strong start to the year. I know you're still sort of guiding towards that [ 50 ] on the full year, but looking further out in the maturity you referenced in the portfolio, how should we think about kind of '27 and beyond and kind of like an average over the next couple of years in terms of quantum? And then secondly, you've talked about the Connect Ventures investments. Any update on the 2 core assets within that, whether they're getting closer to coming to market? I know it's early in the process, but given it was a late-stage fund. And then just lastly, just positioning yourself for the sort of AI wave within the sort of primary investments team. Have you had to sort of upskill there where you had skill sets that you didn't have that you were looking to bring in-house in terms of whether it was network or connecting into that ecosystem?

Yes. I might take them in reverse order. The team point is interesting because I think as you see generational shifts in technology, you naturally think around who in the team has got those capabilities and expertise. And it's true that as you bring new people into the team, they're often augmenting what you already have with talent in those networks. One of the areas of focus we've had is shifting some of our cost base back into that investment team to hire into that. So we've announced -- we hired an investment manager. We've hired an associate. One of the more senior roles I brought in is a Chief People Officer, and that's really to help manage those more junior members of the investment team on their own growth journey and making sure they get the right levels of training, and that we keep the people that we want to keep and grow them through to future generations of partners. But certainly, we're open in terms of bringing more talent into that team. I think the bench strength has been somewhat diminished and it is true that as you refresh through technology themes, you also want to think about bringing that talent and that expertise coming through because as the market moves quickly, for technology, so too does the market for the people and talent that are coming out of those ecosystems. You have to remind me of the question because you did them in a few different orders.

Yes. So the first one was really just realizations and sort of pathway through the next couple of years.

Yes. So on the core portfolio, let's focus on that, that's the most mature aspect. You've got over $800 million of value out there with companies that are close to IPO in the case of a Revolut, could IPO in the case of an Aircall or a Ledger. And so they're now at that stage where they're thinking around those next steps. There's also mature businesses, which are scaled and we put them in the category of companies that could be acquired by strategics. And usually, trade sales into U.S. tech businesses, there's been quite a lot of the flow that we've had in terms of realizations. So over the coming years, that $800 million, call it, 2, 3, 4 years, should be turning to cash. And that's the way we look at it. I won't kill my Chief Portfolio Officer by giving averages and numbers that I want him to come to, rather he'll kill me. But certainly, that's the way we look at it. And we are very active with that. Right now, we've got a list of maybe 15 companies across the portfolio, not just in the core that we're working through.

Okay. And just the last one was just the -- any update on the companies within the Connect Venture Fund in terms of...

Yes, Typeform and Soldo, more mature businesses, Typeform over 100 million ARR publicly, so you could see a pathway. Again, it comes down to markets. I mean, everyone in this room knows that better than I do. So if there's markets for IPOs, but if there's no markets for IPOs, you see companies that will maybe go down different paths. We saw that with M-Files, which had a private equity recap, which was our exit point, and we made a good return on that investment of over 7x multiple. But we tend to prefer technology sales into strategics. That's where we'll get cash out early, and that's where we tend to get the strategic value being paid. And similar with Soldo, it's on that journey. It's well over GBP 35 million, GBP 40 million ARR mature business. Any more questions in the room? In which case, maybe we'll check if there's any online?

[Operator Instructions] There appears to be no questions at this time. I'm handing back over to the room.

Thank you very much. We'll take that as an admission of a comprehensive presentation. Just to finish, I think a final reminder for me really is just to think around the shape of the market in the coming year. I think we've demonstrated over 3 years that breadth that we have as a group. There's a lot more scaling to be done, to Tintin's question around scale in the market. I think there's a lot further for us to go, but we're really growing from a strong base, and we've proven our model out. We can tweak our model. We've shown that flexibility. We've shown that innovation in terms of capital pools over time. So in the coming year, we're very excited to continue to show that demonstration of innovation and show that demonstration of what the portfolio can deliver as well. And I think the share price will largely take care of itself if we keep continuing to deliver results that we have. Thank you, everyone, for your time.