Molten Ventures plc
20 Garrick Street
London, WC2E 9BT
Tel: +44 (0)20 7931 8800
Molten Ventures plc
Annual Report FY24
REGISTRATION NUMBER: 09799594
Annual Report FY24
Financial highlights
*The above figures contain alternative performance measures (“APMs”) - see Note 35 for reconciliation of APMs to IFRS measures.
**EIS and VCT funds are managed by Molten Ventures plc group but are not consolidated. See Accounting Policies on page 116 and Glossary on page 162 for defined terms.
£1,379m
Gross Portfolio Value*
(31 March 2023: £1,371m)
£1,251m
Net assets
(31 March 2023: £1,194m)
662p
NAV per share*
(31 March 2023: 780p)
£57m
Consolidated Group cash
(31 March 2023: £23m)
-1%
Gross Portfolio fair value movement*
(31 March 2023: -16%)
£39m
Cash proceeds from realisations
(year to March 31 2023: £48m)
£55m
Raised, net of fees raised during
the year (31 March 2023: £Nil)
0.1%
Operating costs (net of fee income
and exceptional items) (31 March 2023:
<0.1%) below the targeted 1% of year-
end NAV*
£65m
Invested, £40m direct and £25m representing
Forward Partners share-for-share exchange, in
addition a further £37m from the managed
EIS/VCT funds (year to March 31 2023: £138m
from plc and £41m from EIS/VCT funds)**
Performance highlights
• Investments of £65m during the year from
the Molten Ventures balance sheet, with
a further £37m from the managed EIS/
VCT funds, alongside cash proceeds from
realisations during the year of £39m
• Completed share-for-share acquisition of
Forward Partners plc (‘Forward Partners’)
in March 2024
• Stake acquired in Seedcamp Fund III in
February 2024, continuing the strategy of
acquiring portfolios with high potential for
near-term realisation
• Committed to 6 new seed funds via our
Fund of Funds programme, bringing the
overall Fund of Funds portfolio to 80 funds
• Weighted average revenue growth of
Core portfolio forecast to be over 50% for
calendar year 2024
• Over 85% of companies in the Core
portfolio with at least 18 months of cash
runway as at 31 March 2024 (based on
existing budgets and growth plans)
ESG highlights
• Launched inaugural stand-alone
Sustainability Report on our website
• Delivered tailored climate workshops
to portfolio companies with the aim
of improving their climate literacy and
alignment to the Net Zero transition, in
line with the commitments set out in our
Climate Strategy
• Joined the Steering Group of ESG_VC,
became a member of Ventures ESG and
continued to report against external
standards and frameworks including PRI,
CDP, TCFD, Investing in Women Code
and SECR
• Formally launched the Esprit Foundation
(part of the Molten Ventures Group)
and awarded its first grants to the Social
Mobility Foundation, Included VC and
Foundervine
Post period-end
• On 30 April 2024, Hologic, Inc, a
NASDAQ listed entity, signed definitive
agreement to acquire Endomagnetics
Ltd. (‘Endomag’). The acquisition, which
is subject to completion conditions
and regulatory approval as well as
working capital and other customary
closing adjustments, values Endomag
at approximately $310 million, which is
modestly above NAV
Capital allocation policy
• As reported in our announcement on
30 April, we provide an update to our
capital allocation policy which outlines
how the Company intends to deploy its
capital resources across NAV per share
accretive opportunities in order to deliver
long-term value for its shareholders whilst
ensuring the Company has appropriate
liquidity headroom
1. The Company will continue to focus
its efforts on deploying capital
into exceptional new primary and
secondary investments
2. The Company manages liquidity risk
by maintaining adequate reserves with
ongoing monitoring of forecast and
actual cash flows. Capital resources are
managed to ensure there is sufficient
headroom for 18 months’ rolling
operating expenses
3. Given the strong realisation pipeline,
the Directors likewise believe that
the current share price provides
an opportunity to deliver accretive
benefits to shareholders by purchasing
its own shares at the prevailing discount
levels. The Company therefore intends
to allocate a minimum of 10% of
realisation proceeds to buy back its own
shares, utilising the existing authority
granted to the Board at the AGM
• The Company will continue to balance the
pipeline of new investment opportunities
against the ability to drive returns to
shareholders through share buy backs
whilst maintaining sufficient reserves
Our Sustainability Report can be found on
our website: investors.moltenventures.com/
sustainability
Climate Strategy commitments pages 12 to 14
Esprit Foundation grants page 24
Overview
01 Overview
02 Our business at a glance
04 Our year in review: a Q&A with
our CEO
05 Backing the visionaries of
the future
Strategic Report
08 Chairman’s introduction
09 CEO’s statement
12 Market overview
14 Business model
18 Our strategy
19 KPIs
20 Our strategy in action
24 Financial review
27 Portfolio review
30 Our portfolio
42 Stakeholder engagement and
Section 172 statement
46 Sustainability at Molten
56 Risk management
58 Our principal risks
66 Viability statement
Governance Report
68 Governance ‘at a glance’
69 Corporate governance statement
70 Board of directors
72 Board leadership
74 Division of responsibilities
75 Role, composition and evaluation
78 Nomination committee report
81 ESG committee report
83 Audit, risk and valuations
committee report
86 Directors’ remuneration report
99 Directors’ report
102 Statement of directors’
responsibilities
Financials
104 Independent auditors’ report
111 Consolidated statement of
comprehensive income
112 Consolidated statement of
financial position
113 Consolidated statement of
cash flows
114 Consolidated statement of
changes in equity
115 Notes to the consolidated
financial statements
153 Company statement of financial
position
154 Company statement of changes
in equity
155 Notes to the company financial
statements
161 Board, management and
administration
162 Glossary
We are a leading venture capital firm
investing in and developing disruptive,
high-growth technology companies.
We inject visionary companies with energy to help them transform and grow.
This energy comes in many forms — including capital, knowledge, experience
and relationships. We believe it is our role to support the entrepreneurs who
will invent the future, and that future is being built, today, in Europe.
MOLTENVENTURES.COM 01
OVERVIEW
Contents
Overview
‘One strategy, multiple sources of capital’
Our mission is to empower entrepreneurs to invent the future. Where investments qualify, we combine three pools
of capital (across plc, EIS and VCT vehicles) to invest in the best UK and European technology companies.
01 02 03
PLC
A leading venture capital business listed
on the London Stock Exchange, and
Euronext Dublin.
We invest across the UK and Europe,
in private high-growth technology
companies with global ambitions.
We do this because we believe the
future is being built, today, by leading
entrepreneurs across the UK and Europe.
EIS and VCT
Tax-efficient wrapped EIS and VCT
investment strategies, are managed by
Encore Ventures LLP and Elderstreet
Investments Limited, Molten group
entities.
The EIS and VCT typically co-invest
alongside Molten where investments
meet the relevant eligibility requirements.
This co-investment strategy allows us to
lead more deals and increase the total
size of investment in direct investee
companies.
Third-party capital
Alongside EIS and VCT, we are
expanding our third-party capital
offerings, providing investors with
access to our expertise in identifying
and supporting high-growth technology
companies.
We operate a Fund of Funds programme
to invest in seed and early-stage
European tech companies, and launched
a €50m Irish focused fund with Ireland
Strategic Investment Fund (‘ISIF’).
Our investment case
Long-term,
capital allocation
Focused on disruptive, high-
growth technology companies
Diversified portfolio of
leading companies
Molten takes a long-term, patient
capital approach to investing in and
developing high-growth technology
companies across the UK and Europe.
Molten specialises in investing in disruptive,
high-growth technology companies,
capturing their full growth potential by
building meaningful ownership stakes
over time.
We have a diversified portfolio of 110+
companies. The top 20 comprise 62%
of portfolio value across sectors and
stages, spanning the UK and Europe.
Multiple sources of capital Experienced team and
value-added support
Proven track record
We combine multiple pools of capital,
across PLC, EIS, VCT and third-party
investment strategies, to invest in the
best UK and European technology
companies.
Molten has an experienced team with active
Board management; providing strategic
guidance, access to networks, and operational
support to portfolio companies, and helping
them to scale and achieve growth objectives.
Molten Ventures plc has deployed
over £1 billion in capital, and realised
over £520 million from successful exits,
thus demonstrating a strong track
record of value creation for investors.
Returns Multiple*
No return at 0×
<1× 1× < 3×
3×+
16% 25%
_
†
£17m
25%
£93m
34%
£377m
% of Invested
Capital^
Return Proceeds
world
stores
Key
Fully realised Partially realised Accessed via strategic relationships with Earlybird or Seedcamp
FY24 annual results
Returns track record since 2016 IPO
Note: Past performance is not a reliable indicator of future performance. This graph includes larger realisations only and does not reflect certain realisations through
underlying funds and relating to the syndication of our Fund of Funds programme.
* Return Multiple defined as Multiple of Invested Capital for fully realised assets or Valuation Multiple on Exit for partially realised assets .
^ Pertains to “Returns” deals only as appear on this slide and includes exits and interest payments on debt.
† Loss ratio as a percentage of invested capital is 6% which is calculated as the realised loss over the total cash invested since IPO.
A proven track record
Alongside capital, we also commit brainpower, passion and energy to solve problems. We do this by finding and equipping the best innovators
with the tools they need to transform the way the world works. By empowering our people to use their talent, ambition and expertise, we aspire
to push things forward and make the world better.
£9m
Follow-ons
£7m
Secondary
£15m
Fund of Funds
£6m
Earlybird
£25m
Forward
Partners
£3m
Primary
Total investments
by type in FY24
Total balance sheet investments of £65m
(including £25m in relation to the share-for-share
exchange for Forward Partners) broken down.
For more info see p28
Powered by our Purpose
We advance society through technology innovation, focusing on developing
and investing in disruptive, high-growth technology companies.
MOLTENVENTURES.COM 03 02 ANNUAL REPORT FY24
OVERVIEW
Our business at a glance
Total 100%
Emerging portfolio Core companies
Net other
assets/
liabilities
Cash
39% 64% -8*%5%
Molten is built for the long
term, to invest and operate
throughout the cycle and
support entrepreneurs.
Martin Davis
Chief Executive Officer
Can you tell us how
Molten performed?
What was the rationale
for Molten’s recent
fundraising activity?
How will the recent
acquisition of Forward
Partners benefit Molten?
Our portfolio is in good shape, with
valuations continuing to stabilise, and the
validity of our valuation methodology has
been reinforced by the expected realisations
of Perkbox and Endomag (post-period),
subject to completion conditions and
regulatory approvals. We are continuously
working to develop our innovative platform,
and we are ready for the year ahead.
The £55m capital raise (net of fees) gives us
additional liquidity to bridge our cashflow
through to realisations over the next 18
months, pursue primary and follow-on
investments, and access exceptional
secondary investments at attractive valuations.
Also, as part of the secondary strategy, we
(earlier this calendar year) acquired a stake in
Seedcamp’s Fund III, with value concentrated
in six mature, proven assets in attractive
market segments.
The acquisition provides Molten with a
broader and more diverse pipeline with
access to Forward Partners early-stage
deal flow opportunities, in fast growing
sub-sectors like applied AI and digital
marketplaces. This gives us the opportunity
to blend the maturity of our assets through
a wider and more diverse pipeline of earlier
stage companies for follow-on investments.
What is your outlook for
the industry?
How well funded is the
Molten portfolio?
What is your key focus for
the year ahead?
We’re beginning to see greater visibility on
the ‘likely future cost’ of capital (compared
to the last two years), and we’re expecting to
see a greater degree of normalisation in the
realisations’ market as M&A transactions begin
to pick back up. We’re already seeing this in
our portfolio with the expected realisations of
Perkbox and Endomag, subject to completion
conditions and regulatory approvals.
Our Core portfolio remains well funded,
with management teams focused on capital
efficiency. At Molten, our investment teams
work closely with our founders, often sitting
on their Boards, and have been working
proactively to support them on extending
runways and preserving cash, although,
crucially, wherever possible not at the
expense of growth.
Molten is built for the long term, to invest and
operate throughout the cycle, and, as such,
our overwhelming focus is on continuing
to identify and support the entrepreneurs
inventing the future across Europe. We will
continue to develop our innovative platform,
and are committed to generating returns for
our investors.
Our portfolio: a snapshot
We invest in tech companies that see new ways for the world to work.
They’re inventors, they’re visionaries, and they’re driven to push us further.
Number of companies by sectorNumber of portfolio companies (YoY growth)
0
20
40
60
80
100
120
31-Mar-2431-Mar-2331-Mar-2231-Mar-21
Core Core via Earlybird Emerging Emerging via Earlybird
17
14
16
15
92
35
40
45
3
3
5
2
6
118
71
69
70
19
8
8
45%
11%
19%
25%
Consumer tech
Enterprise tech
Digital health & wellness
Hardware & deeptech
What’s in a share?
As our companies grow, we have the ability
to provide follow-on capital to build our stake.
62% of Gross Portfolio Value, and 64% of our Net Asset Value (“NAV”), is distributed in 20 companies, representing our core holdings. By doubling
down on the winners in our portfolio, we manage the risk exposure of the portfolio and generate improved upside potential. Equally, our more
flexible approach to capital enables the companies themselves to grow over a longer period, creating value for the benefit of our Shareholders.
When we exit companies, cash is returned for reinvestment.
NAV breakdown
Core and emerging percentage of NAV is calculated with reference to their proportions of the Gross Portfolio Value.
Emerging portfolio
The Group continually
invests in exceptional
entrepreneurial and fast-
growing tech business.
Core companies
The companies in the portfolio
representing 62% of Gross Portfolio
Value, which is 64% of the NAV. Molten
provides follow-on capital, developing
a more significant stake in the business
once it has proven its business model.
Cash
When we exit from
companies, the cash
generated is returned to the
balance sheet and reinvested
after overheads into new
opportunities in the market.
Net other assets and
liabilities*
Other assets and liabilities
of the Group.
*To see more details on other
assets and liabilities please see the
consolidated statement of financial
position on page 112.
£1,379m
Gross Portfolio Value* at
30 March 2024
£65m
Balance sheet investments during the year
(including £25m relating to the Forward
Partners share-for-share acquisition)
£39m
Cash proceeds from
realisations during
the period
£18m
Net portfolio fair value
reduction*
*The above figures contain alternative performance measures (“APMs”) – see Note 35 for reconciliation of APMs to IFRS measures. See the Glossary on page 162 for defined terms.
For more information see p27
MOLTENVENTURES.COM 05 04 ANNUAL REPORT FY24
OVERVIEW
Our year in review: a Q&A with our CEO Backing the visionaries of the future
MOLTENVENTURES.COM 07
STRATEGIC REPORT
06 ANNUAL REPORT FY24
Strategic
Report
Contents
Strategic Report
08 Chairman’s introduction
09 CEO’s statement
12 Market overview
14 Business model
18 Our strategy
19 KPIs
20 Our strategy in action
24 Financial review
27 Portfolio review
30 Our portfolio
42 Stakeholder engagement and
Section 172 statement
46 Sustainability at Molten
56 Risk management
58 Our principal risks
66 Viability statement
I look forward to supporting
management and the wider team
in continuing to develop a platform
that provides inspirational founders
with long-term capital, access to
international networks and decades
of experience building businesses.
Laurence Hollingworth
Chairman
It is a great privilege for me to join Molten Ventures as Chairman and I am excited
about the opportunities ahead of us.
In the years preceding my appointment, Molten developed and built
an innovative platform, cementing itself as one of Europe’s leading
venture capital firms. We support high-growth, disruptive technology
companies, and through our listing on the London Stock Exchange and
secondary listing on Euronext Dublin, we provide access to the returns
attainable from venture capital to both institutional and retail investors.
I am looking forward to helping Molten Ventures build an even more
successful business in the coming years.
After two years of a very challenging economic and market backdrop,
we are beginning to see some signs of increased market stability,
helped by improved visibility on global interest rates. Our portfolio
remains in good health and the overall underlying performance of our
assets has been strong. While reduced M&A activity since the end of
the pandemic has resulted in fewer transactions and correspondingly
fewer realisations, the coming year shows more promise, highlighted
most recently by the announced sales of Perkbox in the period, and
Endomag post-period end, both subject to completion conditions
and regulatory approval. We anticipate further exits in the course of
the current financial year. In the past year, the management team has
continued to enhance the platform through the equity capital raise, the
all-share acquisition of Forward Partners and the subsequent purchase
of a stake in Seedcamp Fund III. These were important initiatives in
ensuring that Molten is favourably positioned going forward. We have
the firepower to pursue attractive opportunities in a buyer’s market for
venture capital investment in our preferred areas of expertise.
I was pleased to welcome some of the portfolio companies and
colleagues coming across with Forward Partners at Molten’s annual
Investor Day in February, which was also my first. I have also begun
a programme of meeting many of our major Shareholders, as well as
industry bodies and other key stakeholders for the Group. Our AGM
in 2025 will be a policy approval year for executive remuneration, and
we will be proactively engaging with Shareholders on this matter in the
months ahead. In January, the Financial Reporting Council announced the
revisions it is making to the UK Corporate Governance Code that enhance
the transparency and accountability of UK public companies, as well as
help support the growth and competitiveness of the UK, and preparation
is well under way to ensure that Molten continues to be fully compliant.
In my role as Chairman, ensuring Molten has best-practice governance
is an important priority. We commenced our first externally facilitated
Board evaluation in February, and more can be found on this in
the Governance section of this report. We will continue to address
such issues as Board diversity, mindful of the Parker Review’s
recommendations. Ensuring that Molten’s culture, ethos and mission is
carried across future key employees is critical, and succession planning
both for the Board and executive management is underway. We refer to
this in more detail in the Nomination Committee report. We appointed
Lara Naqushbandi as a Non-Executive Director in September. Lara
brings with her a wealth of global commercial, strategic, and investment
experience. Gervaise Slowey has succeeded Richard Pelly as the
designated Non-Executive Director for employee engagement.
ESG issues are important to us, and as we have stated in the past,
Molten’s contribution to sustainability is two-fold, both through
our consideration of ESG in investment decision-making and our
excitement about investment opportunities in the climate tech
space in particular. We also continue to develop our reporting and
remuneration structure in alignment to ESG and wider sustainability
best practice. More information can be found in the ESG pages of our
Annual Report, and in our inaugural stand alone Sustainability Report
which has also been released today.
I am conscious that Karen Slatford and Grahame Cook (who adeptly
covered her role as Interim Chair) will be hard acts to follow. They have
served Molten with distinction over several years – Grahame continues
to do so as Senior Independent Director and Chairman of the Audit,
Risk and Valuations Committee – and have helped to develop the firm
into the innovative venture capital investor it is today. I would like to
thank them both for their leadership of the Board, and in particular
Grahame for an informed and seamless handover. I look forward to
supporting management and the wider team in continuing to develop
a platform that provides inspirational founders with long-term capital,
access to international networks and decades of experience building
businesses. Finally, I would like to thank our Shareholders for their
support during the past year as well as our Executive Directors, and,
importantly, each of our employees who are so vital in ensuring the
continued growth of Molten Ventures plc.
Laurence Hollingworth
Chairman
Our flexible investment model
has consistently demonstrated
its resilience, and ability to
generate significant returns.
Martin Davis
Chief Executive Officer
Our adaptable model allowed us to act quickly to identify opportunities at attractive
valuations in the year, with a focus on providing value for our Shareholders.
Overview
It has been a busy and productive year for Molten Ventures, marked
with significant achievements amid an economic backdrop that has
been challenging for most technology companies and those who
invest in them.
We continued to develop our platform, operating model, and
acquisition strategy while simultaneously navigating ‘higher-
for-longer’ interest rates, inflationary pressures and the ongoing
geopolitical tensions which have cast a cautionary shadow over some
notable signs of stabilisation in the second half of the year.
Our focus within this context has been on what we can control. We
have maintained discipline around our own investment process and
worked closely with our portfolio companies to extend cash runways,
control costs, and retain talent. Our business performance and the
revenue growth of our portfolio companies has remained strong, and
the disruptive entrepreneurs we have backed across UK and Europe
continue to transform the industries in which they operate.
Our adaptable model allowed us to act quickly to identify
opportunities at attractive valuations in the year, with a focus on
providing value for our Shareholders. Data from previous downturns
suggests that investments made in periods of economic decline have
yielded some of the greatest returns of all vintages for technology
investors. We continued to support innovation through our fundraising
activity, and by offering exposure to investors of privately owned
technology assets in the year.
Forward Partners acquisition
In November 2023, we announced a share-for-share acquisition
of Forward Partners, adding a portfolio of over 40 companies.
The acquisition, completed in March 2024, blends the maturity of our
assets with a more diverse pipeline of earlier-stage companies for
follow-on investment.
Forward Partners was founded in 2013 by Nic Brisbourne, a former
Molten Partner. Forward Partners investment strategy has been
focused on earlier-stage businesses than Molten has traditionally
invested in previously. We see significant opportunity for continued
growth in these portfolio companies and to accelerate value creation.
The Molten platform can provide the winners with the additional
support and resource to reach their potential and generate returns.
We extended an official welcome to Nic Brisbourne and the rest of the
Forward Partners team in March, with the history between Molten and
Forward allowing for a smooth integration which can be attributed
in part to a similar set of experiences, investment ethos and cultural
affinity. Several of our Forward Partners’ colleagues have now joined
our investment and finance teams, leading to cost synergies and
alignment across operational functions.
Alongside the Forward Partners transaction we successfully completed
an oversubscribed fundraise of £55 million (net of fees) by way of
issuance of new shares on the London Stock Exchange, and the
Euronext Dublin, to capitalise on attractive primary and secondary
investment opportunities during a period of market dislocation.
Seedcamp III acquisition
Our acquisition of a stake in Seedcamp III in February 2024, builds
on Molten’s strategy to access exceptional Secondary investments
at attractive valuations. Our Secondaries acquisition strategy acts
to leverage our network in the venture capital market to provide
liquidity to Limited Partners in later life funds, with a focus on
acquiring portfolios of high-quality assets with nearer-term visibility
on realisation opportunities. To date, the Secondaries strategy has
delivered 2.5x returns (as a multiple on invested capital).
The Seedcamp acquisition is an illustration of our strategy in action and
comes on the back of a strong track record of Secondary investments;
including Seedcamp Funds I & II, Earlybird DWES Funds IV and
Earlybird Digital East Fund I.
MOLTENVENTURES.COM 09 08 ANNUAL REPORT FY24
STRATEGIC REPORT
Chairman’s introduction CEO’s statement
£65m
Balance sheet investments
£1.4bn
Gross Portfolio Value
662p
NAV per share
Third-party asset activity
Elsewhere, we continued to make progress with our
third-party assets strategy through the launch of our
Irish-focused fund in July 2023, which continues our
long-standing relationship with the Ireland Strategic
Investment Fund as a strategic partner – as we continue
to back promising Irish technology companies and
founders, in a key European centre for the global tech
industry.
We are pleased to welcome Isabel (‘Izzy’) Fox as the
Head of Third-Party Funds, a new strategic role aimed
at expanding the firm’s impact through various targeted
investment funds complementing its publicly listed core
model, EIS and VCT investment vehicles. With Izzy’s
appointment, Molten intends to make further progress
in building its third-party assets under management and
associated income, including via its syndicated Fund of
Funds programme and other third party private funds
strategies.
Venture capital as an asset class has typically generated
equal or better returns compared with listed equities or
other alternative asset classes, and the UK Government
is keen that Defined Contribution (‘DC’) pension
schemes are able to invest in these types of assets.
This has the full support of the British Private Equity &
Venture Capital Associations (‘BVCA’), and is something
we at Molten are supporting wholeheartedly.
Facilitating access to venture capital for high-growth
companies remains a priority for UK and European
governments, and forms part of the UK’s proposed
pension system reforms. Molten Ventures is among the
20 signatories to the BVCA’s Venture Capital Compact,
supporting the UK government’s Mansion House
initiative to improve DC pension schemes’ access to
venture capital investments.
Molten Board
Our most valuable asset is our people, and we continue
to bolster our strength and expertise year-on-year.
We appointed Lara Naqushbandi as a Non-Executive
Director in September 2023, followed by the
appointment of Laurence Hollingworth in January 2024
as Chair of the Board. Lara brings a wealth of experience
from previously held roles in both finance and
sustainability, and Laurence brings significant capital
markets, investment banking and leadership experience
to Molten.
Integrating ESG
We continue to develop our ESG agenda as part of
our commitment to being a responsible investor. The
integration of ESG across our portfolio is a business
priority throughout the full investment cycle, and
through our portfolio management we continue to fulfil
our broader corporate purpose of advancing society
through technological innovation.
We aim to invest in businesses and entrepreneurs
who recognise and embrace the need for more
sustainable practices, and strive to improve their ESG
performance to contribute towards a more sustainable
and prosperous future for all. You can read more
about these efforts in our Sustainability Report, also
published today.
During the year, we have made significant progress
against the commitments set out in our Climate Strategy,
particularly with regards to our portfolio engagement
programme. We have also continued to disclose against
PRI, CDP, TCFD and the Investing in Women Code.
Finally, The Esprit Foundation awarded its first four
grants to charities and organisations, whose objectives
focus on the advancement of education for the public
benefit (especially those aged under 30), with particular
emphasis on the fields of technology, business and
entrepreneurship.
Market environment and the
Molten model
The cost of capital remains a significant factor for
investors, and we have adapted to an environment of
higher-for-longer interest rates. More recently, we have
seen forecasts for interest rates stabilising, which is set to
allow greater visibility of the cost of capital over the next
12 to 24 months.
We have seen early shifts towards fresh capital raising,
with a much higher proportion of ‘flat rounds’, and in
some cases small up-rounds, compared to last year.
General Partners are typically raising less and taking
longer to close funds due to a more restricted liquidity
environment.
We believe the visibility over the interest rates
provides further confidence across the private market
valuations. Although public and private markets are
interconnected, any anticipated rise in confidence
among public investors will take time to reflect in private
market valuations.
We remain confident that our unique and flexible
model will lead to significant returns for our investors.
Financial position and our
portfolio
We have retained the discipline of preserving our
balance sheet, and raised funds, which has provided us
with a sufficient cash position of £57 million, along with
the £60 million additional headroom that our undrawn
revolving credit facility provides. I am pleased to say
that these measures have provided us with the ability
to support our existing portfolio and to invest in high-
quality opportunities where identified. Our portfolio
has remained resilient and well-funded, and we have
continued to realise investments which provides capital
back for reinvestment in a period of muted liquidity.
The Gross Portfolio Value at 31 March 2024 was
£1,379 million, which is marginally up from £1,371 million
at 30 September 2023, predominantly resulting from
investments in Seedcamp III and Forward Partners. We
have generated realisations of £39 million and a fair
value uplift (excluding the impact of FX) of £6 million.
We are rightly proud of our strong track record, having
deployed more than £1 billion of capital and realised
over £520 million since our IPO in 2016, achieving a 16%
average return per year for our Shareholders.
Realisations and exits
During the period, realisations remained fairly low
relative to previous years as a consequence of uncertain
global macroeconomic conditions and the resulting
downturn in corporate transactions across almost all
industries and markets. While we do not anticipate the
IPO market for high-growth technology companies
to return to pre-downturn levels immediately, there is
evidence that some high-tech companies are publicly
considering an IPO.
Historically, most of our exits have been through trade
sales, and we have seen an uptick in M&A enquiries,
alongside the exits of Perkbox and Endomag, subject to
completion conditions and regulatory approvals (both
due to take place above our holding NAV).
Capital allocation
With a number of realisation processes either underway
or planned across the portfolio, we expect to be able
to deliver in the region of £100 million in realisations
this upcoming financial year alongside our existing
meaningful cash resources.
As reported in our announcement on 30 April, we
provide an update to our capital allocation policy which
outlines how the Company intends to deploy its capital
resources across NAV per share accretive opportunities
in order to deliver long-term value for its shareholders
whilst ensuring the Company has appropriate liquidity
headroom.
1. The Company will continue to focus its efforts
on deploying capital into exceptional primary and
secondary investments
2. The Company manages liquidity risk by maintaining
adequate reserves with ongoing monitoring of forecast
and actual cash flows. Capital resources are managed
to ensure there is sufficient headroom for 18 months’
rolling operating expenses
3. Given the strong realisation pipeline, the Directors
likewise believe that the current share price provides an
opportunity to deliver accretive benefits to shareholders
by purchasing its own shares at the prevailing discount
levels. The Company therefore intends to allocate a
minimum of 10% of realisation proceeds to buy back its
own shares, utilising the existing authority granted to
the Board at the AGM.
The Company will continue to balance the pipeline of
new investment opportunities against the ability to drive
returns to shareholders through share buy backs whilst
maintaining sufficient reserves.
Outlook
Our flexible investment model has consistently
demonstrated its resilience and ability to generate
significant returns. We have implemented a capital
allocation policy that aligns with our current share
price discount to NAV and the anticipated timeline
for realisations. This policy ensures that we are well-
positioned to maximise value for our Shareholders
while maintaining a prudent approach to capital
management.
We remain cautiously optimistic on the stabilisation of
interest rates, and the early signs of renewed capital
raising activity, indicating a potential shift towards a
more favourable investment climate. The strength of our
business model stands us in good stead.
I extend my thanks to the Molten team and look forward
to delivering on our strategy in the year to come.
Martin Davis
Chief Executive Officer
Our strategic
acquisitions
and disciplined
investment
approach provide
a foundation
to capitalise
on emerging
opportunities.
MOLTENVENTURES.COM 11 10 ANNUAL REPORT FY24
STRATEGIC REPORT
CEO’s statement continued
Venture capital: an overview
We believe that venture capital works best when VCs give their energy to help companies succeed.
At Molten this ‘energy’ can come in the form of capital, experience or knowledge, as well as building
relationships with our portfolio companies that demonstrate our commitment for the long term.
In its most basic form, venture capital (VC) is a form of financing where
capital is invested into a company—a privately held start-up or small
business—in exchange for equity or convertible debt in the company.
While investing in early-stage technology companies comes with
a degree of risk, VCs are driven by a conviction that tomorrow’s
problems won’t be solved by today’s conventions, and that the
process of rapid technological innovation and transformation is set to
continue.
As well as generating returns for investors, VC is about empowering
start-up businesses with capital, mentorship, and advice to help them
succeed in their endeavours, and in doing so, helping them create
products and services that improve the human experience.
Sometime these endeavours are connected to some of the world’s
largest and most complex challenges, and at other times they could
involve entirely new problem sets which are yet to be clearly defined.
Starting a new business is always a daunting experience, and
entrepreneurs often find themselves having to educate investors,
customers, and the broader market as to why they exist at all.
Companies raise money from VC investors to:
1. help build their business and products
2. recruit and retain a good pipeline of talent
3. make acquisitions and invest further into intellectual property
4. acquire access to relevant networks and relationships, and
5. gain advice and guidance from seasoned operators
VC investors take the opportunity to assess companies, and invest
in those they believe to have highly credible management teams, a
unique product offering, and a framework to execute a business plan
and become a prominent competitor in their respective market niche.
There are three major VC markets globally which are the US, Europe, and
Asia, and in 2023, over $300bn was invested between those regions in
start-up businesses. While the US and Asia are larger than the European
VC market, Europe is growing at a faster rate, and the capital sought to
support that market growth is failing to keep pace. For this reason, Molten
continues to see great opportunities to invest in the category-defining
businesses of tomorrow, with a focus on investing in the best venture-
stage opportunities throughout Europe.
17%
European VC market CAGR
(2015-2023)
$66bn
European VC market valuation
(2023)
189
No. of active unicorns in Europe
combined value over $500bn (2023)
EU deals by round size ($bn) per year
<$2M $2-$10M $10-$20M $20-$50M $50-$100M $100-250M $250m+
0
2,000
4,000
6,000
8,000
10,000
12,000
2024
(YTD)
202320222021202020192018201720162015
Source: Pitchbook data up to 31 March 2024
Capital invested by stage ($bn) per year
<$2M $2-$10M $10-$20M $20-$50M $50-$100M $100-250M $250m+
0
20
40
60
80
100
120
140
2024202320222021202020192018201720162015
Source: Pitchbook data up to 31 March 2024
Our market at a glance
Market events that have occurred
in VC in the past year
Over the past 12 months the global economy has experienced
stabilised high interest rates across most major currencies, including
the USD, EUR and GBP. Towards the end of 2022 (and into the
beginning of 2023) asset prices were volatile which seeped into the
private markets. Across 2023 and early 2024, both valuations and
volatility began to stabilise, with recent new heights on the S&P 500,
STOXX 600, and the FTSE 100.
Going forward, the consensus for global monetary policy appears
to favour dovish sentiment which historically has supported upside
potential for equity prices. As these market dynamics filter into the
VC market there is a sense of cautious optimism for new compelling
investment opportunities. In September 2023 we saw the highly
anticipated Tech IPO for ARM Holdings which was widely regarded
as a barometer for the IPO market. ARM successfully raised nearly $5
billion and has shown promising after-market performance. This is
evidencing that ‘good deals can get done’ and that the public market
is ready to support outstanding high growth technology businesses.
The market is showing signs of improvement, and technology
businesses are coming back into focus to drive performance through
innovation. Much of the tailwind experienced in the technology
market over the past 12 months has been driven by the potential
productivity gains through rapid adoption of artificial intelligence.
Microsoft’s most recent investment in Open AI valued the business
at $80 billion, NVIDIA’s market cap had crossed $2 trillion, surpassing
Google and closing in on Apple and Microsoft. At the earlier stages of
the business lifecycle, Molten is seeing companies take the next step
in this market and focusing more closely on real-world applications to
drive productivity gains.
Private markets typically lag public markets and 2023 displayed the
largest contraction in European VC within the last ten years. 2023
saw $66 billion invested in European VC deals which was down 42%
from the previous year. Much of that contraction was due to liquidity
restrictions in a challenging fundraising environment coupled with
repricing dynamics as a result of a higher interest-rate environment.
Given the public sphere showed more promising returns than
anticipated over the last 12 months to March 2024, we anticipate
seeing improvements in the private market over the next 12 months
due to that lag effect.
Currently in 2024, we are witnessing more capital invested in European
VC than in 2023. Since 2015 that continues to follow a growth trajectory
for the market which is scaling more rapidly than the US or Asia.
Looking closely at the quarterly investment data for European VC (see
charts on bottom of this page), it was the larger rounds in excess of
$100 million that saw the biggest contractions throughout 2023, while
investment in smaller/earlier rounds continued to persist at more
modest valuations. Q1 2024 saw some larger deals (in excess of $250
million) come to market, raising over $7 billion in aggregate in the first
quarter. Comparatively, the total investment in rounds at or above $250
million over all four quarters in 2023 was only $11 billion.
Heading into the remainder of 2024, Molten sees value opportunities
in the market. With the recent acquisition of Forward Partners, and
having acquired a stake in Seedcamp III, we have an expanded
portfolio of assets, combined with those in our Fund of Funds
programme, which continue to present us with unique investment
opportunities. With this in mind, Molten is well positioned to invest in
the most interesting and competitive deals in the market throughout
the next 12 months.
Who are Molten and how do they fit in the VC sphere?
Molten disrupted the conventional venture capital model,
recognising the limitations of traditional approaches in driving
sustainable, transformative growth by pursuing an IPO in 2016.
Our focus is to collaborate with entrepreneurs who share in our
conviction that disruptive innovation is imperative for building
enduring, category-defining businesses.
Molten’s legacy traces back to 2006 when Esprit Capital Partners
was established as a spin-off from a larger asset manager.
Since then, we have scaled into a well-established VC platform,
supported by a team of over 60 professionals dedicated to
investing in promising start up and growth-stage businesses.
While headquartered in London and Dublin, Molten’s investment
platform has a pan-European mandate, spanning the entire lifecycle
from seed stage (typically as a limited partner) to later stages
(typically as a direct investor) through to IPO or acquisition. Our
adaptable platform is designed to facilitate long-term investments
and support companies throughout economic cycles, with a focus
on businesses capable of fundamentally disrupting the status quo
and becoming category leaders.
As a minority equity investor, Molten fosters early relationships
with portfolio companies, and adds value through active Board
participation. Beyond capital, we provide entrepreneurs and
management teams with strategic advice, mentorship, and access
to a global network, which creates outcomes for all stakeholders,
including our Shareholders.
Molten operates a unified strategy across three vehicles: the plc,
and the managed EIS and VCT funds. Where investments qualify,
this structure enables us to combine three capital pools to invest in
the UK and Europe’s most promising technology companies in a
risk-adjusted and tax-efficient manner for our respective investors.
Additionally, our Fund of Funds programme, established in 2017,
enables us to gain exposure and invest in the most promising seed
and early-stage venture capital funds across the UK and Europe.
Seed and early-stage investing is a highly localised endeavour,
requiring deep networks within local ecosystems of angel investors,
incubators, and technology entrepreneurs. We believe that
nascent businesses are best funded by investors who can engage
founders locally or within specific verticals, and our Fund of Funds
programme (complemented by the acquisition of Forward Partners)
allows us to effectively leverage this expertise.
Our decision in 2016 to IPO on the AlM growth market of the
London Stock Exchange, and Euronext Dublin, thereby adapting
beyond the traditional GP/LP model to become one of the largest
public venture capital firms in Europe, was partly driven by our
commitment to ‘democratise’ the returns available from venture
capital as an asset class, and make the rewards of our investments
accessible to public market investors, not just a small group of
Limited Partners.
Our innovative structure as a public company allows us to direct
capital from institutional and retail investors towards our portfolio
companies. We benefit from an evergreen balance sheet strategy
that offers flexible investment terms, and allows Molten to focus
on helping portfolio companies grow, while evaluating the market
for optimal exit conditions, which we aim to achieve above NAV to
maximise value for our Shareholders. This structure also provides
us with the flexibility to raise capital from public market investors,
including retail investors via the PrimaryBid platform, giving us the
‘firepower’ to pursue investment opportunities.
Our direct investment strategy primarily focuses on early and
growth-stage opportunities. We maintain a balanced portfolio that is
diversified across four key sectors of consumer tech, enterprise tech,
digital health and wellness, hardware and deeptech.
MOLTENVENTURES.COM 13 12 ANNUAL REPORT FY24
STRATEGIC REPORT
Market overview
Seed stage
Seed funding round provides the capital
a business needs in its early stages to go
from an idea to a real product or service.
Investment
process
Realisation
returns
Early stage
Early stage capital mostly covers all the
investments a start-up needs to begin
generating positive and continuous
revenue.
Growth stage
The growth stage of the
business is when it expands,
market share increases, and
profits start to accumulate.
Late stage
Companies at this stage reach scale
with sustained revenue. Cash flow from
operations is an inflow as the company
maximises profits.
Buyout/IPO
Businesses have reached maturity and
is typically when VCs look to exit via
PE buyout or IPO.
Fund of Funds
EIS
VCT
Molten Ventures plc
Third-Party Capital Strategy
B
u
s
i
n
e
s
s
l
i
f
e
c
y
c
l
e
We back businesses with the capital, expertise and networks to fuel their growth.
Our brand, people, networks, and Fund of Funds programme offer a large
pipeline of promising private technology companies from across Europe.
Thousands of
companies
raising in Europe
We talk to,
closely track, and
screen thousands
of companies
per year
We aim to make
15-30 new
and follow-on
investments per
year
Fully
realised
Partially
realised
Accessed via strategic relationships
with Earlybird or Seedcamp
Key
1x exits:
£19m
of returns
1-3x exits:
£93m
of returns
3x exits:
£377m
of returns
3x exits:
£377m
of returns
1-3x exits:
£93m
of returns
1x exits:
£19m
of returns
MOLTENVENTURES.COM 15 14 ANNUAL REPORT FY24
STRATEGIC REPORT
Business model
Team structure and supporting companies for growth
Investment Team meetings
Quarterly Investment Team meetings to (i) establish and
develop a strategy around high priority deals and (ii)
separately review, discuss and plan more broadly the
ongoing delivery of the Company’s overall investment
strategy.
Dealflow
Deals reviewed each week in the Investment Team weekly
dealflow meeting. Investment Committee review and
approval process takes place if a company moves onto the
next stage (and Board process if required).
Partnership Team
Our seasoned and stable Partnership Team boasts
extensive cross-sector expertise. Whether facilitating
connections or sharing insights, they’re dedicated
to supporting growth. Many have been founders
themselves, adept at guiding companies through
international expansion, customer acquisition, hiring,
funding rounds, exits, and IPOs.
Platform Team
Our Platform Team handles investments, evaluations,
and post-investment portfolio engagement. Supported
by legal, compliance, investor relations, finance, and
ESG specialists, we aid companies with branding,
regulatory compliance, public markets, governance, and
implementing sustainable ESG strategies as they scale.
Integration of ESG in our investment strategy
We are committed to responsible investing through the life cycle of our investments, from pre-screening to exit. We believe that
ESG integration across our portfolio is paramount and enables us to fulfil our broader corporate purpose: to advance society through
technological innovation. All prospective portfolio companies in which we consider making a direct investment are initially screened against
our Exclusion List and thereafter assessed as part of our ESG due diligence process before a final decision is taken on the investment.
See page 15 of our Sustainability Report.
We invest in high-growth private technology companies in the UK and Europe.
We back businesses with the capital, expertise and networks to fuel their growth.
Investing in early-stage companies is our core business, with access to seed stages
via our Fund of Funds programme and Earlybird partnership.
Fund of Funds
Our Fund of Funds programme – now
connected with third-party capital – allows
us to support fund managers across the UK
and Europe, investing at an earlier stage
and providing our investors with access to
seed-stage businesses. By seeding the early-
stage ecosystem, we can also source the
best companies for Series A and B, pooling
expertise from sector-specific funds based
across the UK and Europe.
Earlybird
As well as a co-investment partner, we have
invested into seven of the Earlybird funds,
allowing us to expand our investment
footprint in the European market.
SPVs
As an extension of our
existing strategy of
deploying capital via
other vehicles through
our Fund of Funds
programme, co-
investments with some of
our seed and early stage
fund managers have
enabled us to access
exciting opportunities
into forward-thinking
European companies
via investments through
Special Purpose Vehicles.
Direct
We invest directly,
deploying capital in
the UK and across
Europe, generally
in early and growth
stage deals.
Secondaries
We look to access
exceptional secondary
investments at attractive
valuations from time-
to-time, by acquiring
investments held by other
investors and founders.
This enables us to further
diversify our investment
strategy and blend
the maturity of assets.
Secondary investments
typically span a shorter
period of time, reaching
maturity quicker.
We invest in four core sectors
using several deployment strategies
and our responsible investment process
Consumer technology Hardware and Deeptech
New consumer-facing products, innovative business
models, and proven execution capabilities which bring
exceptional opportunities that are enabled by technology.
R&D-heavy technologies which emerge to become
commercially dominant, upending industries and
enabling entirely new ways of living and doing business.
Enterprise technology Digital health and wellness
The software infrastructure, applications and services that
make enterprises more productive, cost-efficient, and
smoother to run.
Using data, software and hardware to create new
products and services for the health and wellness market.
For more info see p 28
Our investment criteria
Molten and its wider Group aims to seek
out high-growth companies originating
from across Europe that:
• operate in new markets with the
potential for strong cross-border or
global expansion
• have the potential to address large
new markets or disrupt major existing
ones, utilising disruptive technology to
achieve this
• have competitive barriers to entry to
encourage strong margins and capital
efficient business models
• have the potential to be global sector
leaders
• are run by impressive entrepreneurs
who have the ability to build
world-class management teams
• are backed by strong syndicates of
investors to reduce financing risk in
future rounds
• will be attractive candidates for
acquisition by large corporations,
private equity or public ownership by
institutions by way of an IPO
• aim for sustainability and/or
are committed to positive and
sustainable growth
• have the potential to generate
multiples of invested capital for
investors
MOLTENVENTURES.COM 17 16 ANNUAL REPORT FY24
STRATEGIC REPORT
Business model continued
Our strategy consists of six clear objectives, underpinned by our corporate purpose ‘to advance society
through technology and innovation’.
Strategic objective FY24 progress FY25 outlook Links
To back disruptive
high-growth
technology companies
to invent the future
• Continued development of our platform
and team.
• Investments of £65 million made during the
year, including £25 million share-for-share
exchange for Forward Partners, with an
additional £37 million from the managed EIS/
VCT funds.
• Invested into 13 new and existing companies
(direct) and committed to 6 new funds via our
Fund of Funds strategy.
• Trading performance of our portfolio
companies continues to be strong, with
weighted average revenue growth rates in
the core portfolio expected to be over 52%
in 2024.
• Expected level of annual
deployment in the region of
£100-150 million, including the
managed EIS/VCT funds.
Link to
principal risks
(pages 58 to 65)
1, 2, 3, 5,
6, 7, 8
Link to KPIs
3, 4
To fuel their growth
with access to capital
• Investments of £65 million made during the
year, including £25 million share-for-share
exchange for Forward Partners, with an
additional £37 million from the managed EIS/
VCT funds.
• Expected level of annual
deployment in the region of
£100-150 million, including the
managed EIS/VCT funds.
Link to
principal risks
(pages 58 to 65)
1, 3, 4, 5, 9
Link to KPIs
3
To provide a
holistic capital
model, supporting
entrepreneurs through
the duration of their
journey
• £57 million of cash and £60 million undrawn
RCF at 31 March 2024, with a further £66 million
available for investment from EIS/VCT funds.
• Committed to a further six Fund of Funds,
leading to total commitments in 80 funds as
part of our Fund of Funds programme.
• Investments from the managed EIS/VCT funds.
• Continue to utilise our flexible
model to support entrepreneurs
through the duration of their
journey.
• Continue to support our Fund of
Funds programme.
Link to
principal risks
(pages 58 to 65)
1, 3, 4, 7, 8
Link to KPIs
3, 5
To scale our platform
for growth while
maintaining the
integrity of the
investment process
• The platform’s AUM (including EIS and VCT) is
c. £1.8 billion.
• Share-for-share acquisition of Forward Partners
contributing 40+ companies to the portfolio,
and new Investment and Finance team
members.
• Continued development of our team.
• Continue to consider
opportunities to introduce third-
party capital, enabling the Group
to build a more material stake in
companies.
• Continue to develop our
processes as we grow.
Link to
principal risks
(pages 58 to 65)
1, 2, 3, 4, 7, 9
Link to KPIs
1, 3, 5
To maintain a
high-quality bar for
investments to continue
to deliver strong
investment returns
underpinned by cash
realisations
• Fair value increase of 0.4% in the gross
portfolio.
• Realisations of £39 million during the year.
• Continued target of 20% fair value
growth through the cycle.
• Continued target of 10% in
realisations of the Gross Portfolio
Value through the cycle.
Link to
principal risks
(pages 58 to 65)
3, 4, 7, 9
Link to KPIs
1, 2, 4
To support visionaries
who find new ways for
the world to work in the
future. We want that
future to be sustainable,
fair and accessible to all
Achievement of FY24 ESG KPIs - see page 48 of
this report for further details, or see more in our
inaugural Sustainability report, also published
today.
• See page 49 for details of FY25
ESG KPIs.
Link to
principal risks
(pages 58 to 65)
3, 4, 5, 7, 9
Link to KPIs
6
We are focused on delivering a strong financial performance and achieving the targets we have set.
These core KPIs demonstrate our strategy’s effectiveness, and validate the value delivered to Shareholders.
KPIs Measurement Progress this year Focus for 2025
01
Growth in value
of the portfolio
Gross Portfolio Value determined
using IPEV Guidelines.
Gross Portfolio Value has increased
to £1,379 million, with a fair value
movement of £6 million, reflecting
a fair value increase of 0.4% from
FY23 (FY23: £1,371 million).
Continued target of 20% fair value
growth through the cycle.
02
Realising
cash
Cash generated from portfolio
company exits against original
cost.
£39 million realised in the year
(FY23: £48 million).
Continued target of 10% in
realisations of the Gross Portfolio
Value through the cycle.
03
New
investments
Deploying funds for investments
into new portfolio companies,
follow-on investments into existing
companies, stake building into
existing companies and secondary
investments.
Investments of £65 million
made during the year, including
£25 million share-for-share
exchange for Forward Partners,
(FY23: £138 million), with an
additional £37 million from the
managed EIS/VCT funds (FY23: £41
million).
Expected level of annual
deployment in the region of
£100-150 million, including
EIS/VCT.
04
Dealflow
We maintain an internal database
of opportunities.
We continually track deals done
at stages earlier than our target
investment criteria and filter to
pre-qualify future potential deals.
Through our brand and network,
continue to access high quality
dealflow across Europe.
05
Cash
balances
Maintaining sufficient liquidity to
meet operational requirements,
take advantage of investment
opportunities and support the
growth of portfolio companies.
£117 million cash available to plc,
incluidng undrawn £60 million
revolving credit facility balance
from our £150 million debt facility
at year-end with £90 million term
debt drawn (FY23: £83 million,
£90 million drawn, with undrawn
revolving credit facility of £60
million) at year-end.
£66 million (FY23: £48 million) cash
in the managed EIS and VCT funds
available for investment.
Target maintenance of 12-18
months of cash resources.
06
ESG
Progress and track ESG
performance in line with our ESG
KPIs (see page 48).
We continued to make progress
in our ESG efforts, particularly
with regard to tailored portfolio
engagement (Please refer to our
Sustainability Report for more
detail).
Summary of our progress against
FY24 ESG KPIs (see page 48).
Execute on the Company’s FY25
ESG KPIs, which can be found in
the Sustainability section of the
report on page 49.
MOLTENVENTURES.COM 19 18 ANNUAL REPORT FY24
STRATEGIC REPORT
Our strategy KPIs