27 September 2024
Mindflair PLC
("Mindflair" or the "Company")
Unaudited interim results for the six months ended 30 June 2024
Mindflair plc (AIM: MFA), the company focused on investing in AI related technology, is pleased to announce its unaudited interim results for the six-month period ended 30 June 2024.
Highlights
Company highlights
- Increase in net asset value ("NAV") to £7,488,000 as at the period end (31 December 2023: £5,844,000), equating to growth of 28% since 31 December 2023
- NAV per share as at the period end of 2.70 pence (31 December 2023: 2.13 pence) compared to a current share price of 0.775 pence with Mindflair trading at a 71% discount to its NAV as at 26 September 2024
- Profit of £1,644,000 during the period (six months ended 30 June 2023 loss before taxation of £512,000)
- Post period end placing to raise £925,000 before expenses in July 2024
- Further investment in SV plc post period end to increase exposure to SVV1, in order to benefit from expected SVV1 realisations, and SVV2 given its exposure to AI
Portfolio highlights
- Completion of the disposal of Landvault, an investment in SVV1, to Infinite Reality for US$450 million in an all-share transaction at a significant multiple of its carrying value
- Profitable sale of shareholding in Smarttech247 Group plc ("Smarttech247")
- Getvisibility, one of the Company's larger direct investments, has continued to make good progress. In particular, post period end, Forcepoint launched a comprehensive security solution for Open AI GPT which is powered by Getvisibility core technology
- SVV1 continues to focus on realising material cash returns from its portfolio given that it is now in its investment realisation phase and expects further exits following on from Landvault
- SVV2, with the British Business Bank as a cornerstone investor, has made a number of new investments in exciting AI companies during the period
-
Post the period end in August 2024, SVV2 made three further new investments in PHINXT
Robotics Limited ("PHINXT"), Purple Transform Limited ("Purple Transform") and Learn Cycle Limited ("Stylus Education"). PHINXT is an innovative AI-led robotics software company that is redefining warehouse automation and Vortex IQ is an AI-powered automation platform for
e-commerce. Purple Transform is a data analytics platform focused on enhancing safety, security and efficiency across industries such as rail and wider transport. Stylus education is an Edutech company whose platform, LearnCycle, uses AI to automate paper-based assessments, cutting down hours of marking while keeping the quality of personalised feedback intact.
Nicholas Lee, Director of Mindflair, commented:
"The Company has made excellent progress in the first half of 2024 with a significant increase in net assets and further progress with regard to the realisation of investments in its portfolio. In particular, the sale of Landvault for US$450 million has been completed and SVV1 now holds shares in Infinite Reality. We expect to receive further details with regard to the planned IPO of this company shortly. There has also been an exciting further development announced regarding Getvisibility's relationship with Forcepoint in connection with data protection across generative AI.
"Furthermore, SVV2 has made a number of new investments in exciting AI companies and Mindflair continues to provide investors with the opportunity to gain exposure to a portfolio of AI focused companies in a sector which continues to thrive and be at the forefront of technology development.
"Post period end, the Company increased its investment in Sure Venture plc in order to increase its exposure to SVV1, which the Company expects will make some exciting realisations in the short term, and SVV2 given its exposure to AI."
Investment overview
1. Summary
Mindflair is a company focused on investing in next generation technology with a focus on the application of AI to transform large traditional industries. Mindflair invests in its portfolio companies directly, or indirectly, as set out below, through: (i) its investments in three funds managed by Sure Valley Ventures ("SVV") and (ii) its investment in Sure Ventures plc.
Investments | SVV1 | SVV2 | SVV3 | Sure Ventures | |
plc | |||||
Direct | Getvisibility, | 13% | 6.1% | 16% | 21.3% |
Low6 and | |||||
Precog | |||||
Indirect | 5.9% via | 1.3% via Sure | Holds stakes of | ||
Sure | Ventures plc | 25.9% of SVV1 | |||
Ventures | and 5.9% of | ||||
plc | SVV2 | ||||
Cornerstone | Enterprise | British | Enterprise | ||
investor | Ireland | Business | Ireland | ||
Bank | |||||
Net interest | 18.9% | 7.4% | 16.0% | 21.3% |
The above table does not include the effect of the additional investment in Sure Ventures plc which took place in August 2024 and which increased the Company's shareholding to 23.8%.
The Company's principal investment portfolio categories are summarised below:
Category | Cost or valuation at 30 | Cost or valuation at |
June 2024 | 31 December 2023 | |
£000s | £000s | |
Investment in Sure Valley Ventures | 7,124 | 4,932 |
Direct investments | 1,534 | 1,563 |
Cash/other listed securities | 360 | 206 |
Total | 9,018 | 6,701 |
During the period under review, the Company's investment portfolio grew significantly, principally driven by an increase in the valuation of the Company's investment in Sure Valley Ventures due to the sale of the holding in Landvault to Infinite Reality for US$450 million. Post period end in July 2024, the Company undertook a placing to raise £925,000 before expenses in July 2024, however, the cash balance above as at 30 June 2024 does not include the proceeds from this placing.
2. Sure Valley Ventures Fund ("SVV1")
SVV1 is SVV's first fund which has completed its new investment phase and has now entered into its realisation phase. It has already achieved four realisations/liquidity events to date, with more expected in the short term.
Within the SVV1 portfolio, highlights during the period include:
- Getvisibility is a cybersecurity company focusing on data visibility and control and uses state-of-the-art artificial intelligence ("AI") to classify and secure unstructured information. Getvisibility, one of the Company's larger investments, has continued to make good progress during the period. In particular, post period end, Forcepoint launched a comprehensive security solution for generative AI platforms part of which is powered by Getvisibility.
Mindflair also has a direct interest in Getisibility and, an additional indirect interest through SV plc.
- LandVault, a large metaverse builder, was sold to Infinite Reality for US$450 million in an all-share transaction. SVV1 has a 7% shareholding in Landvault and Infinite Reality is expected to seek a listing on Nasdaq. This transaction has the potential to generate proceeds of circa US$6 million for Mindflair, although there can be no guarantee that a listing will take place.
- Smarttech247 Group plc (AIM: S247) is an established global artificial intelligence-based cybersecurity business, specialising in automated managed detection and response. SVV1's shareholding was sold during the period.
As at the period end, SVV1 had a portfolio of 11 investee companies at different stages of development, spanning a range of sectors. This portfolio provides Mindflair with exposure to a number of key,
cutting-edge and rapidly growing technology sectors. Further details of the portfolio companies and recent developments are set out below:
Security | |||||
Nova Leah | An artificial intelligence cyber-security risk assessment and protection | ||||
platform for connected medical devices. | |||||
(Nova Leah Limited) | |||||
Getvisibility | An Artificial Intelligence security company addressing the substantial | ||||
(Visibility Blockchain | |||||
problem faced by corporations | in storing, | sorting, | accessing | and | |
Limited) | |||||
protecting data. | |||||
PreCog | An artificial intelligence security | solution | platform | company | that |
provides data intelligence to combat crime, terrorism and protect | |||||
(Polience Limited) | |||||
vulnerable people. Customers include leading law enforcement and | |||||
security agencies, and transport infrastructure groups. | |||||
Immersive | |||||
Technologies | |||||
Engage XR | A developer of virtual reality and immersive experiences with a specific | ||||
focus on education and enterprise learning and development. The | |||||
(Engage XR Holdings | |||||
company is listed on AIM, has over 100 commercial customers and is | |||||
plc) | |||||
rapidly growing revenue and margins. | |||||
Infinite Reality | LandVault (formerly Admix) was sold to Infinite Reality ("iR"). iR is an | ||||
innovation company powering the next generation of digital media and | |||||
ecommerce through AI and immersive technologies. iR's virtual worlds | |||||
enable brands and creators to fully control how they distribute content, | |||||
engage audiences, and monetise their creations while maintaining | |||||
ownership of their data. | |||||
VividQ | A deep tech software company which has developed a framework for | ||||
(VividQ Limited) | real-time 3D holographic displays for use in heads-up displays and AR | ||||
headsets and glasses. | |||||
Volograms | An artificial intelligence deep learning company that uses Al to create | ||||
(Volograms Limited) | 3D augmented reality from 2D photos and videos. The company has | ||||
launched a consumer AR Camera app called Volu and has pro user and | |||||
enterprise versions in development. | |||||
Virtex | A company building a platform for the next-generation of live, | ||||
(Virtex Limited) | immersive entertainment within the virtual reality gaming and esports | ||||
industries. It is developing its new Stadium app. | |||||
Internet of things | |||||
CameraMatics | An Artificial Intelligence platform enabling transport fleet managers to | ||||
reduce risk, increase driver safety and comply with growing industry | |||||
(MySafe Drive | |||||
governance and compliance. The company is growing revenues | |||||
Limited) | |||||
considerably and building its presence in the very significant US market | |||||
where it has already won a number of new contracts. | |||||
Wia | Provides a platform solution for smart buildings. Its platform provides | ||||
full device and application management, security, data capture and | |||||
(WIA Technologies | |||||
storage, analysis and control. | |||||
Limited) |
EveryAngle
An artificial intelligence platform that uses machine learning to provide enterprises, such as large retailers, with line of business solutions to reduce fraud, churn and waste using machine vision.
3. Sure Valley Ventures UK Software Technology Fund ("SVV2")
In March 2022, the Company invested in a second SVV fund, the Sure Valley Ventures UK Software Technology Fund. The principal investor in SVV2 is the British Business Bank ("BBB") an investment arm of the UK Government. The first close of this fund amounted to £85 million, with the BBB investing up to £50 million and other investors ("Private Investors"), including Mindflair, investing up to £35 million over the 10 year life of the fund.
Mindflair expects to invest up to £5 million in total over the life of the fund which would provide it with a circa 6.1% interest. SVV2 invests in a range of private UK software companies with a focus on companies in the Artificial Intelligence sector and within the subsectors of AI in the enterprise, AI in Immersive Technologies (such as AR/VR) and AI in Cybersecurity sectors.
SVV2 is managed by the same SVV team which, to date, has been highly successful in achieving a number of cash realisations from, and upward revaluations of, companies in the SVV1 portfolio. The profit share arrangements within SVV2 are designed to encourage the involvement of private investors alongside the BBB, meaning that Mindflair and the other Private Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standard.
SVV2 made one new investment during the period in Ittybit, a pioneering developer tools company. This portfolio now comprises five investments which are described below:
RetÌnÍZE Limited | RETiniZE Limited is an award-winningcreative-tech company based in Belfast, |
Northern Ireland. The company is developing an innovative software product | |
called Animotive that is harnessing the latest VR and Generative Al technologies | |
to transform the 3D animation production process. | |
Jaid | Jaid is a rapidly growing platform that uses Al as a Service (AIaaS) solution to help |
businesses reduce costs, improve efficiency and make data-driven decisions, | |
including client service automation, sales automation, payment exception | |
processing and claims administration processing. Jaid is working with major | |
banks, wealth managers, fund administrators and clearing banks on a global basis | |
Captur | Captur is a company that has built an enterprise AI platform for real-time, rules- | ||
based image recognition. Existing investors, MMC Ventures and Ascension | |||
Ventures participated in this round, along with other investors including ex- | |||
Deliveroo, and enterprise AI investors Concept Ventures and Two Culture | |||
Capital, backers of ElevenLabs and Electric AI. | |||
The company's technology uses Edge AI, the implementation of artificial | |||
intelligence in an edge computing environment, which allows calculations to be | |||
completed nearby to where data is created, rather than an offsite data centre | |||
or a centralised cloud computing facility. This localised processing allows | |||
Captur's technology to make decisions using visual AI in under 3 seconds. | |||
Captur's visual AI solution is fast to implement and offers product owners easy- | |||
to-embed APIs and SDKs that act as a smart camera within their mobile apps. | |||
Captur is currently being used in the delivery sector for drivers to map doorways | |||
and verify the correct address, reducing delivery to incorrect addresses and | |||
fraud by up to 40%. Captur has recently made significant progress on new | |||
business and product features. They have launched their real- time camera SDK | |||
into production, which is now being used by tens of thousands of users per | |||
month. They have continued to grow their market lead in mobility with plans to | |||
launch with new clients in the US and AUS markets in H1'24. They are also | |||
expanding into delivery and logistics and are in late-stage negotiations with a | |||
Fortune 100 retailer in the US. | |||
Ittybit Limited | Ittybit provides cutting-edge APIs and tools designed to simplify the uploading, | ||
storing, and delivery of large video, image, and audio files. Leveraging state-of- | |||
the-art computer vision models, Ittybit empowers developers to filter unsafe | |||
uploads, enhance content searchability, and automate tagging and transcription | |||
processes. A standout feature of Ittybit's offering is its innovative AI-based | |||
compression tool (akin to those used by industry giants like Netflix and Meta) | |||
which ensures faster downloads and reduced storage costs without | |||
compromising visual quality. | |||
Vortex | IQ | Limited | Vortex IQ is an AI-powered automation platform for e-commerce. Vortex IQ's |
("Vortex IQ" | AI-driven platform provides actionable insights and seamless implementation, | ||
enhancing efficiency and Customer Lifetime Value. Positioned to meet the | |||
growing demand for intelligent automation, it offers tools for staging, coding, | |||
data backup, and migration. | |||
Post the period end in August 2024, SVV2 made three further new investments in PHINXT Robotics Limited ("PHINXT"), Purple Transform Limited ("Purple Transform") and Learn Cycle Limited ("Stylus Education"). PHINXT is an innovative AI-led robotics software company that is redefining warehouse automation and Vortex IQ is an AI-powered automation platform for e-commerce. Purple Transform is a data analytics platform focused on enhancing safety, security and efficiency across industries such as rail and wider transport. Stylus education is an Edutech company whose platform, LearnCycle, uses AI to automate paper-based assessments, cutting down hours of marking while keeping the quality of personalised feedback intact.
4. Sure Valley Ventures III Limited Partnership ("SVV3")
On 23 February 2023, Mindflair announced that it had agreed to invest in SVV's new venture capital fund, SVV3, alongside Enterprise Ireland, the fund's cornerstone investor that committed 50% or €15 million to the fund. SVV3 plans to invest in circa 15 high-growth Al software companies in sectors such as Enterprise, Immersive Technologies and Cybersecurity across the Republic of Ireland.
In June 2024, this fund made its first investment in Inspeq AI, a transformative full-stack AI Ops platform, alongside Delta Partners and a number of other leading investors. Inspeq AI aims to become the trusted source of safe and reliable AI development, enhancing generative ("Gen") AI application deployment with its comprehensive platform designed for effective and efficient production. The platform addresses AI performance issues throughout the Large Language Model ("LLM") development lifecycle, ensuring optimal safety and ethical compliance. Inspeq AI's advancements have notably reduced security and hallucination (events in which machine learning models produce outputs that are coherent and grammatically correct but factually incorrect or nonsensical) issues by up to 80%, significantly improving reliability and trustworthiness.
5. Sure Ventures plc ("SV plc")
SV plc (LSE: SURE) is a London-listed investment trust which invests in early-stage software companies in the rapidly growing technology areas of Augmented Reality, Virtual Reality, Internet of Things and artificial intelligence. As at 30 June 2024, Mindflair had a 21.3% shareholding in SV plc whose principal investment is a 25.9% interest in SVV1 and a 5.9% interest in SVV2.
Post period end, the Company increased its investment in Sure Venture plc in order to increase its exposure to SVV1, which the Company expects to make some exciting realisations in the short term, and SVV2. SV plc also announced a significant increase in NAV as a result of the Landvault disposal which also resulted in a sharp increase in this company's share price.
6. Direct investments
Getvisibility | Details of this investment are covered in the section above. |
Low6 | Low6 continues to focus on its underlying revenue growth and scaling as the leading |
Free2Play supplier in the iGaming, sports betting and sports verticals, whilst | |
continuing to expand its in-app purchase revenue approach as part of the | |
company's mobile gaming strategy. The company's accounts for the period to July | |
2024 are expected to be finalised soon which are expected to show significant | |
revenue growth and positive EBITDA. | |
Precog
PreCog is a patent pending software solution that understands visitor flow, protects borders, detects persons of interest, and ensures locations are protected from those who wish to cause damage or commit crime. PreCog provides totally unique, scalable, actionable intelligence solution. Customers include top UK and International Government security and law enforcement agencies and Transport infrastructure organisations.
Key financial indicators | ||||
The key unaudited performance indicators are set out below: | ||||
Performance indicator | 30 June 2024 | 31 December 2023 | Change | |
£000s | £000s | |||
Profit / (loss) attributable | £1,644 | £(2,665) | ||
Net asset value | £7,488 | £5,844 | 28% | |
Net asset value - fully diluted per share | 2.70p | 2.13p | 27% |
Other
In February 2024, John May, a Non-Executive Director of the Company, decided to retire from the Board, effective 31 March 2024, in order to devote more time to his other roles. The Company will be looking to appoint a new director in due course.
Outlook
Overall, we are pleased with the progress that has been made so far in 2024.
Going forward, we are looking forward to seeing some additional realisations or liquidity events from the investment portfolio in the short term, particularly given that SVV1 is very much in its realisation phase. As mentioned earlier, we believe that our AI focused portfolio should be attractive to investors wanting exposure to this exciting and fast-moving sector.
This announcement contains inside information for the purposes of the UK Market Abuse Regulation. The person who arranged the release of this information is Nicholas Lee, Director of the Company.
Enquiries: | |
Mindflair plc | |
Nicholas Lee, Director | Tel: +44 (0) 20 3368 8961 |
Nominated Adviser | |
Cairn Financial Advisers LLP | Tel: +44 (0) 20 7213 0880 |
Liam Murray/Ludovico Lazzaretti |
Broker
Peterhouse Capital LimitedTel: +44 (0) 20 7469 0935 Lucy Williams/Duncan Vasey
Notes to Editors
About Mindflair plc
Mindflair plc (AIM: MFAI) (formerly Pires Investments plc / AIM: PIRI) is a company providing investors with access to a portfolio of next-generation technology businesses with significant growth potential and focus on AI.
The Company is building an investment portfolio of high-tech businesses across areas such as Artificial Intelligence, Internet of Things, Cyber Security, Machine Learning, Immersive Technologies and Big Data, which the Board believes demonstrate evidence of traction and the potential for exponential growth, due to increasing global demand for development in these sectors.
For further information, visit: https://mindflair.tech/.
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2024
Unaudited | Unaudited | Audited | ||||
6 months | 6 months | year | ||||
ended | ended | ended | ||||
30-Jun | 30-Jun | 31-Dec | ||||
2024 | 2023 | 2023 | ||||
Continuing activities | £000s | £000s | £000s | |||
Notes | ||||||
Income | ||||||
Other income | 2 | 2 | 4 | |||
Total Income | 2 | 2 | 4 | |||
Gain/(loss) on investments held at fair | ||||||
value through profit or loss | 1,819 | (251) | (2,169) | |||
Operating expenses | (177) | (263) | (500) | |||
Operating profit/(loss) from continuing | ||||||
activities | 1,644 | (512) | (2,665) | |||
Profit/(loss) before taxation from | ||||||
continuing activities | 1,644 | (512) | (2,665) | |||
Tax | - | - | - | |||
Profit/(loss) for the period from | ||||||
continuing activities | 1,644 | (512) | (2,665) | |||
Total Comprehensive Income | ||||||
attributable to equity holders of the | ||||||
Company | 1,644 | (512) | (2,665) | |||
Basic profit/(loss) per share | 3 | |||||
Equity holders | ||||||
Basic | 0.6p | (0.28)p | (1.44)p | |||
Fully diluted | 0.5p | (0.28)p | (1.44)p |