British Smaller Companies VCT2 plc · LSE:BSC
British Smaller Companies VCT2 — British Smaller Companies VCT — Investor Presentation (June 2022)
43 slides from British Smaller Companies VCT2's investor presentation, June 2022
Slide 1: Investor Workshop
Investor Workshop British Smaller Companies VCT plc British Smaller Companies VCT2 plc June 2022
Slide 2: Agenda
Agenda 11.00 11.40 12.40 Welcome Relative Insight Portfolio Update Peter Waller, Chairman Ben Hookway Charles Winward, British Smaller Companies VCT2 plc CEO, Relative Insight Head of Portfolio - South 11.05 12.05 13.00 Heuristics for VC investing in New Investment Activity Wrap Up and Q&A Uncertain
Slide 3: Financial Performance
YFM Equity Partners Marcus Karia, CFO, YFM Financial Performance YFM Equity Partners 4
Slide 4: Historic Quarterly Total Return growth
Historic Quarterly Total Return growth BSC BSC2 100 BSC 100 100 90 90 90 80 80 80 p/share p/share p/share 70 70 70 60 60 60 50 50 50 40 40 40 Dec 20 Mar 21 Jun 21 Sep-21 Dec-21 Mar-22 Dec 20 Mar 21 Jun-21 Sep-21 Dec-21 Mar-22 Dec 20 Mar 21 Jun 21 Sep-21 Dec-21 Mar-22 NAV/share Div/share NAV/share Di
Slide 5: Key developments in 2021 (both VCTs)
Key developments in 2021 (both VCTs) • Investments of £15.7m Normal dividends paid of 4p (BSC) and 3p (BSC2) • 3 new investments - £8.5m Special dividend of 5p (both) • 8 furthers - £7.2m • BSC portfolio growth of £32.0m TotalReturn Total Returnofofc29% c.29% • BSC2 portfolio growth of £26.0m (12mon
Slide 6: Key updates in 2022 YTD (both VCTs)
Key updates in 2022 YTD 2 new investments - £7.5m (both VCTs) 3 furthers - £1.7m Normal dividends ongoing Fundraising of £60m allotted Past performance of BSC or BSC2 is no guide to future performance and may not be repeated. The value of investments may go down as well as up and you may not get bac
Slide 7: VCT Returns – periods to 31 March 2022
VCT Returns – periods to 31 March 2022 30% 25% 20% 15% 10% 5% 0% 10 yr 5 yr 3 yr 2 yr 1 yr BSC BSC2 Past performance of BSC or BSC2 is no guide to future performance and may not be repeated. The value of investments may go down as well as up and you may not get back the full amount invested. YFM Equ
Slide 8: Average investment rate of return p.a. over 10, 5, 3, 2 and 1 years
Average investment rate of return p.a. over 10, 5, 3, 2 and 1 years to 31 March 2022 30% 25.9% 25.2% 26.3% 25% 24.0% 20% 14.3% 15% 13.3% 11.1% 9.4% 10.1% 10% 7.4% 5% 0% 10 yrs 5 yrs 3 yrs 2 yrs 1 yr -5% BSC BSC2 Shaded area represents benefits of DRIS Past performance of BSC or BSC2 is no guide to f
Slide 9: YFM Investors Presentation: Relative Insight
Presentation: YFM Investors Relative Insight Presentation Date: Presented by: June 2022 Ben Hookway info@relativeinsight.com • www.relativeinsight.com YFM Equity Partners 10
Slide 10: What does Relative Insight do?
LANCASTER / LONDON / NEW YORK What does Relative Insight do? What? Why? How? An AI based text data Companies currently have access By using innovative comparative analytics platform which delivers to huge amounts of valuable text data, yet techniques to highlight critical high value audience insight
Slide 11: Relative Insight originated in law enforcement
LANCASTER / LONDON / NEW YORK Relative Insight originated in law enforcement, where we compared text data to detect criminals online Real people Vs Masquerading criminals Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 12 ww
Slide 12: Relative Insight originated in law enforcement
LANCASTER / LONDON / NEW YORK Relative Insight originated in law enforcement, where we compared text data to detect criminals online Language differences Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 13 www.relativeinsight
Slide 13: This technique was applied to the business world
LANCASTER / LONDON / NEW YORK This technique was applied to the business world Digital marketing Consumer analytics Customer experience Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 14 www.relativeinsight.com
Slide 14: The same data can be analysed and split in different ways
LANCASTER / LONDON / NEW YORK The same data can be analysed and split in lots of different ways Data can be split by age Vs In their 20s Over 40s “Wear” “Apply” Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 15 www.relative
Slide 15: The same data can be analysed and split in different ways
LANCASTER / LONDON / NEW YORK The same data can be analysed and split in lots of different ways Data can be analysed over time Pre ad campaign Post ad campaign Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 16 www.relativei
Slide 16: What do we mean by 'text data'?
LANCASTER / LONDON / NEW YORK What do we mean by ‘text data’? Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 17 www.relativeinsight.com
Slide 17: Key Highlights
LANCASTER / LONDON / NEW YORK Key Highlights 14.84 5.46 97% 56/44 215 2020 2021 2022 2023 2024 2025 2026 Yr on Yr ARR Growth % split US/UK Subscribers May 22 Market Size - $bn customers Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity
Slide 18: Why do I believe?
LANCASTER / LONDON / NEW YORK Why do I believe? Demand for Data trends Great Team Truly differentiated more business making more text data Product intelligence available Relative Insight, Fraser House, White Cross Business Park, Lancaster. LA1 4XQ info@relativeinsight.comYFM • Equity Partners 19 www
Slide 19: It's all Relative
It’s all Relative YFM Equity Partners 20
Slide 20: New Investment Activity
YFM Equity Partners Jamie Roberts, Head of New Investments - South New Investment Activity YFM Equity Partners 21
Slide 21: New investment process
New investment process How we How we Why they find them assess partner them with us YFM Equity Partners 22
Slide 22: B2B Software solution selling to global blue chips
• B2B Software solution selling to 29 global blue chips • Sits alongside Global Software Systems (Salesforce, Microsoft and ServiceNow) to assess the health of the infrastructure • Founded in 2016 by 2 ex IT consultants to solve a problem their clients had • QC had 26 people across London, Barcelona
Slide 23: How we find them
• We see c600 opportunities a year How we find them • 37% from Corporate finance firms – the rest from direct origination and a large network of introducers • Quality Clouds is a good example of that network - Company Lawyers - Blaser Mills in Buckinghamshire • PWC Raise appointed to support negotia
Slide 24: How we assess them
How we assess them We went to see Direct referencing existing them….. London and and former customers Used the YFM network Barcelona (development to talk directly to various team) • 10 existing customers sector experts • 4 former customers Financial and Legal • Director of Customer diligence success
Slide 25: Why they partner with us
• We met them early and face to face Why they partner with us • Worked our network to understand it quickly • Industry and functional experts de-risking execution • Referenced us heavily • Once we decided we wanted to do it we moved quickly YFM Equity Partners 26
Slide 26: Going forward
• Already grown revenue to c£1.6m • Global offices open and key hires in the US • Short term pipeline very strong – targeting c140% YOY growth Going forward • Investing in marketing • Self serve product in Salesforce and ServiceNow market places • Series B funding round in 2023 Introductions to Comp
Slide 27: See website page for the Matillion interview
See website page for the Matillion interview YFM Equity Partners 28
Slide 28: Portfolio Update
YFM Equity Partners Charles Winward, Head of Portfolio - South Portfolio Update YFM Equity Partners 29
Slide 29: Portfolio Profile – Value by Sector
Portfolio Profile – Value by Sector Retail & Brands Other 2% • A diversified portfolio with the focus on sectors with positive 4% Data & long-term dynamics Business Services Analytics 9% 49% • Data & Software - growth sectors with positive long-term dynamics (increasing use of software and data acro
Slide 30: Top 10 Portfolio by value – 31 March 2022
Top 10 Portfolio by value – 31 March 2022 Value Cumulative Company Type of business Cost £m Years £m % Nav Matillion Cloud-based integration technologies 3.2 51.7 19.1% 5.4 Springboard Retail performance data tools 4.7 11.1 23.2% 7.5 Unbiased Tech enabled market-place for professionals 4.9 10.4 27.0
Slide 31: Portfolio Value Creation Process
Portfolio Value Creation Process Investment Stage Active Portfolio Management Further funding & Exit Improve governance Refine Build and KPIs sales Follow on Back good teams Teams proposition investment – back with growth plans winners Drive Improve change operations Focus on key execution Position
Slide 32: The Opportunity – Outpost VFX
The Opportunity….. • Visual Effects Studio for TV, Film and Streaming markets • £2.5m investment in February 2021 • International expansion, studio development, IT infrastructure and recruitment • Revenues of £7m, plan to grow to £30m over 4 years YFM Equity Partners 33
Slide 33: Outpost VFX – rapid international scaling
Outpost VFX – rapid international scaling… The Journey so far… • 16 months later… • YFM Chair appointed (Eikon, Ncam, • FY22 revenue growth 250% decades in VFX) • FY23 200% growth expected • LA and Indian offices opened • Improved customer profile – growing • Trebled workforce reputation (Tier 1-2)
Slide 34: The Opportunity – Force24
The Opportunity… • Marketing Automation platform (SaaS) • £4.0m investment in November 2020 • Investment in scaling sales team and product • ARR of £2.8m, plan to grow to £9.0m over 4 years YFM Equity Partners 35
Slide 35: Force24 – growth but with growing pains
Force24 – growth but with growing pains… The Journey so far… • 19 months later… • Build out of Exec Team complete • Complete senior team maturing sales function • Sales team growth and sales growth of +40% yoy • CTO recruited and product roadmap established • But scaling and recruitment challenges e
Slide 36: The Opportunity – Wooshii
The Opportunity….. • Tech enabled video production • New and disruptive “thin-agency” model • £3.6m investment May 2019 • Investment in sales, marketing and account management • Revenues £2m, plan to grow to £15m over 4yrs YFM Equity Partners 37
Slide 37: Wooshii – disruptive service model now adding tech
Wooshii – disruptive service model now adding tech… The Journey so far… • 36 months later… • Appointed Chair with agency experience • Delivered £5m revenues, targeting £10m this year • YFM input in building out Exec Team • Growing blue chip customer base, land, • Hired, fired and rehired a team in U
Slide 38: Wrap Up and Q&A
YFM Equity Partners David Hall, Managing Director, YFM Wrap Up and Q&A YFM Equity Partners 39
Slide 39: What lies ahead
What lies ahead Trends Regulatory Fundraising • Investment • Sunset Clause • Market • Increasing Specialism • Other asks • Future • Scale YFM Equity Partners 40
Slide 40: What lies ahead: Trends
What lies ahead: Trends Investment Specialism Increasing Scale • £1.2bn in pandemic • Stage • Creating bigger companies • 2022 70% > 2021 • Sector • > Capital per business • Multiple rounds • Quoted vs Unquoted • Portfolio: new • Higher value • New entrants investment businesses • Scaling VCTs YFM E
Slide 41: What lies ahead: Regulatory
What lies ahead: Regulatory Sunset Clause Other Asks • When: April 2025 • After sunset extended/removed • What: EIS/VCT • Tidying up Upfront relief Age limit/New territory • Dialogue: 2022-23 • Recycling capital? YFM Equity Partners 42
Slide 42: What lies ahead: Fundraising
What lies ahead: Fundraising Market Future • Portfolios £5-6bn • Similar levels • > further • Realisations react to economy • New investment £300m+ • Past any guide? YFM Equity Partners 43
Slide 43: Summary BSC VCTs – Thank You
Summary BSC VCTs Strong Performance THANK YOU Resilient Portfolio Q&A Increasing Investment Opportunities YFM Equity Partners 44
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