TIDMWWW
RNS Number : 4131R
SuperSeed Capital Limited
01 March 2023
1 March 2023
SUPERSEED CAPITAL LIMITED
("SuperSeed" or the "Company")
FOURTH QUARTER 2022 RESULTS
SuperSeed, (AQSE:WWW) a company established as a venture capital
fund of funds for early-stage technology investments, announces
unaudited results for the fourth quarter ending 31 December
2022.
Investment Policy
The Company invests in B2B SaaS companies, primarily through
funds managed by SuperSeed Ventures LLP (the "Manager") - a
London-based venture capital firm. SuperSeed's investee companies
help their customers drive revenue growth and efficiency savings
using next-generation software and Artificial Intelligence
(AI).
Highlights
-- SuperSeed II LP (the "Fund") closed an investment into Intelligent AI in Q4.
-- Following the Intelligent AI investment, the Fund's portfolio is now eight SaaS companies.
-- Revenue in the Fund's portfolio companies was up 21% on an
ARR basis for Q4, and 200% for 2022 as a whole, averaging 9.6%
compound monthly growth.
-- The main driver of the strong revenue growth is that
businesses (in particular enterprise customers) are deploying
AI-powered software to enable continued efficiency gains.
-- The Company reported earnings per share of GBP0.06 for Q4.
-- The Company's Net Asset Value is now GBP1.02 per share.
2022 in Review
2022 already seems distant memory, but it was a pivotal year for
tech. Some of the key points:
-- Market crash. Especially for tech stocks.
-- War in Ukraine.
-- Crypto collapse.
-- Implosion of bad business models.
-- Layoffs at major tech firms.
But also:
-- Incredible advances in AI (ChatGPT, MidJourney).
-- A "back-to-basics" focus on building proper companies.
-- Start-up valuations looking more realistic as revenue multiples contract.
Fund Portfolio Commentary
2022 witnessed significant market volatility and economic
uncertainty, resulting in significant falls in SaaS companies'
valuations during the period. The BVP Nasdaq Emerging Cloud Index,
designed to track the performance of emerging public companies
primarily involved in providing cloud software to their customers,
saw its median ARR multiple fall from 12.65x to 5.64x.
For the Fund's portfolio companies, however, robust revenue more
than made up for the multiple contraction.
Companies in the Fund's portfolio more than tripled SaaS revenue
over the course of 2022. Although tech companies generally saw
declining multiples, SuperSeed's companies grew faster than revenue
multiples declined. This delivered a performance for the portfolio
was up more than 23% over the year. Net of costs and expenses, this
led to an uplift of 16% on invested capital.
Outlook for 2023
Since the start of 2023, stocks (and in particular tech stocks)
have rallied. S&P500 is up 4.2%, and Nasdaq 100 is up 10.7%
YTD. We still see volatility on the horizon, but - so far - Q1 has
been a positive for tech stocks.
In the context of the current market backdrop, there are many
exciting investments lining up in 2023 - especially in AI.
Generative AI is a concept that has been building for years, but
it really came to the forefront of the tech industry in 2022. Over
the past decade, AI (/machine learning) has primarily been used for
classification. Show an algorithm lots of data, and it can help
figure out whether it is a cat or a dog; a working product or a
defective product; a stock to buy or a stock to sell.
Classification.
With generative AI, the field of AI is taking a great leap
forward. It's no longer just about classifying things into neat
categories but about creating new things. At first, as digital
objects (e.g. a digital product design). But this now also extends
to physical objects. An example of this is our portfolio company Ai
Build which helps high-end manufacturers in automotive and
aerospace use Ai and 3D printing to create new products, faster and
more efficiently.
With the current economic and market backdrop, it is likely that
wider sentiment towards the technology sector will remain subdued
for some time yet, but we anticipate significant rerating when
markets recover. The portfolio is well placed to continue to
benefit from the increasing adoption of AI technology which
continues apace, in spite of stock market volatility.
The outlook for the Fund's portfolio in 2023 is very
encouraging. Revenue for the existing portfolio is expected to more
than double over the course of the year before any new SaaS and AI
companies are added to the portfolio.
New investment - Intelligent Ai
Key information
Intelligent Ai ("IAI") enables insurance companies and asset
owners, for the first time, to have a 360-degree view of risk.
IAI's multi-layered platform delivers data to allow insurers,
brokers and corporations the access they need to near real-time,
location-based risk insights to make sure they have the correct
insurance cover.
Investment name Intelligent AI
Industry AI
Geography UK
Currency of investment GBP
Stage of initial investment Seed
Website https://www.intelligentai.co.uk/
Investment Rationale
The Team - IAI has exceptionally deep industry knowledge. They
have designed and delivered 6 of the top Insurers' Risk and
Underwriting Platforms (RSA, AXA, XL Carlin, Aviva, MS Amlin and
QBE).
Defensibility - The data held in the platform generates a
significant defensible competitive moat.
Traction - The company already has five major insurers as
clients and have analysed 20,000+ global properties with great
results. IAI automatically reads bulk risk reports, augmenting them
with Construction, Occupancy, Protection, Exposure (COPE) data.
This can then integrate smoothly into an Underwriter's
Workbench.
Other Fund Portfolio Highlights
Ai Build
Ai Build is a rapidly growing SaaS business that enables its
clients to fully automate the additive manufacturing process from
planning to printing, vastly improving the speed, quality and
scalability across the entire enterprise.
Highlights:
-- Contracted SaaS revenue grew more than 8x in 2022.
-- The company has signed contracts with Global Tier 1 manufacturers.
-- The company has landed the first six-figure contracts with
the expectation that the largest contracts will grow into 7-8
figures, annually.
-- The company has formed strategic partnerships with a number
of large-format 3D printing hardware.
Duel
Leading Brand Advocacy SaaS platform that allows consumer brands
to track, measure and coordinate thousands of their own advocates
at scale, massively accelerating social commerce.
Highlights:
-- ARR increased 51% from December 2021 to December 2022.
-- Q4 2022 signed a large contract with a huge multinational brand in consumer goods.
-- In advanced talks with other leading fashion and beauty groups.
-- Projected to grow 2x ARR in 2023.
-- One leading jewellery design company has seen a revenue
increase of +GBP1m annually directly attributable to deploying the
Duel platform.
ThingTrax
Integrated platform that enables manufacturers to set targets
and track performance using sensors and manage the continuous
performance improvement of manufacturing plants using digital
workflows.
Highlights:
-- Grew contracted SaaS revenue +125% in 2022
-- Organic expansion in customer accounts led to the first 6-figure contracts signed in the year
-- Projected to more than double revenue again in 2023
Related Party Transactions
-- The Company has sold GBP1,000,000 of commitment in the Fund
(representing 18.2% of the Company's interest in the Fund) to the
Manager. This sale has taken place at the Net Asset Value,
representing a profit of 12.4% above the purchase price. The sale
is being settled in cash.
-- To align the Company's policies with normal market practice,
it is now paying the Manager a 20% performance fee on successful
investments. This is the industry standard, and it ensures that the
Company will continue to benefit from access to the best investment
opportunities going forward.
Having considered the matter carefully using skill and
diligence, the independent directors Mr Andrew Hatton and Mr Joseph
Truelove consider both matters to be fair and reasonable for the
shareholders of the Company.
-- Further to the announcement made on 16 September 2022 in
respect of the establishment of a GBP1,000,000 loan facility
through the issue of convertible loan notes (the "Convertible Loan
Notes") to the Manger, on 22 February 2023 the Company issued
50,000 Notes to the Manager for a Subscription Price of
GBP50,000.
Appointment of Alternate Director
The board has appointed Mrs Colette Taylor as a permanent
alternate non-executive director to Mr Andrew Hatton with effect
from 27 February 2023. Mrs Taylor is a member of the Association of
Chartered Certified Accountants and has more than twelve years'
experience in the private equity sector.
In accordance with Rule 4.3 of the AQSE Growth Market Access
Rulebook, it is confirmed that there are no additional details to
be disclosed in relation to Mrs Taylor.
The directors of the Company accept responsibility for the
content of this announcement.
For more information, please contact:
SuperSeed Capital Limited +44(0) 203 405 3060
Mads Jensen, Investment Manager
Natasha Head, Investor Relations
VSA Capital - AQSE Corporate Adviser and
Broker +44(0) 203 005 5000
Corporate Finance: Andrew Raca, Richard Kauffer
SuperSeed Capital Limited
Condensed Statement of Comprehensive Income
for the period from 1 October 2022 to 31 December 2022
Current Quarter
1 October
2022
to
31 December
2022
GBP
Income
Investment income 175
Unrealised gain on investments held at fair value
through profit or loss 163,222
Other income 141
Total income 163,538
----------------
Expenses
Establishment costs -
Administration fees 7,500
Audit fees 5,293
Directors' fees 4,500
Insurance 259
Legal & professional fees 12,505
Regulatory fees 3,525
Sundry expenses 448
Total expenses 34,030
----------------
Total gain/(loss) and comprehensive income for
the period 129,508
================
Basic earnings per share GBP0.062577
Diluted earnings per share GBP0.060946
SuperSeed Capital Limited
Condensed Statement of Financial Position
as at 31 December 2022
31 December
2022
GBP
Non-current assets
Investments 2,126,898
Total non-current assets 2,126,898
----------------
Current assets
Trade and other receivables 24,018
Cash and cash equivalents 235,089
Total current assets 259,107
----------------
Total assets 2,386,005
================
Current liabilities
Trade and other payables 265,985
----------------
Total current liabilities 265,985
----------------
Total liabilities 265,985
================
Net assets 2,120,020
================
Equity
Share capital 2,080,000
Retained earnings 27,027
Warrants 12,993
Total equity 2,120,020
----------------
Net asset value per ordinary share GBP1.019240
The financial statements were approved by the Board of Directors
and authorised for issue on 27 February 2023.
SuperSeed Capital Limited
Condensed Statement of Changes in Equity
for the period from 1 October 2022 to 31 December 2022
Share Capital Retained Total
Earnings
GBP GBP GBP
Issue of Ordinary Shares 2,080,000 - 2,080,000
Total comprehensive gain for
the period - 27,027 27,027
Balance as at 31 December
2022 2,080,000 27,027 2,107,027
-------------- ---------- ----------
SuperSeed Capital Limited
Condensed Statement of Cash Flows
for the period from 1 October 2022 to 31 December 2022
Current Quarter
1 October 2022
to
31 December
2022
GBP
Cash flows from/used in operating
activities
Net cash flow used in operating activities 218,452
Cash flows used in investing activities
Net cash flow used in investing activities (312,190)
Cash flows from financing activities
Net cash flow from financing activities -
Net movement in cash and cash equivalents
during the period (93,738)
Cash and cash equivalents at the
beginning of the period 328,828
Cash and cash equivalents at the end
of the period 235,090
================
SuperSeed Capital Limited
Investment Analysis
for the period from 1 October 2022 to 31 December 2022
31 December 2022
GBP
Cost 1,782,875
Capitalised expenses 400
Cumulative movement in value 343,623
Fair value 2,126,898
=================
Investment fair value can be further analysed as follows:
Current Quarter
1 October
2022
to
31 December
2022
GBP
Cost
Cost at beginning of the period -
Cost of investment - settled 1,791,035
Cost of investment - due for settlement -
after period end
Cost of investment - prepaid, closing
equalisation (8,160)
Total cost of investment 1,782,875
=================
Fair value movement
Fair value adjustment at beginning of -
the period
Revaluation of underlying investments 409,319
Capitalised expenses 400
SuperSeed II LP management fee and other net movements
in NAV (65,696)
344,023
=================
Fair value of investments 2,126,898
=================
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END
NEXSEDFAAEDSEIE
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