21 March 2016
("TMT" or the "Company")
Final results for the year ended 31 December 2015TMT Investments PLC, which invests in high-growth, internet-based companies across a variety of sectors, is pleased to announce its final results for the year ended 31 December 2015.
NAV per share of US$1.91 (up 40% from US$1.36 as of 31 December 2014)
1 full (Tracks) and 1 partial (Pipedrive) cash exit
10 positive revaluations, including significant uplifts in values of our portfolio stars Backblaze, Depositphotos, LeTote, Pipedrive, Virool, and Wrike
2 write-downs (Unicell and Appsindep)
US$1.43 million allocated to new and follow-on investments (Depositphotos, ScentBird, and Weaved)
Diversified portfolio of 31 companies focused around mobile software applications, cloud solutions, social discovery shopping, and business SaaS tools
Many portfolio companies continue to experience rapid growth Alexander Selegenev, Executive Director of TMT, commented:
"2015 was our fifth full year as a publicly traded company. As reported in our 2014 Annual Report, given the rapid growth experienced by a significant number of our portfolio companies, we expected 2015 to produce a number of positive revaluations across our portfolio. We are delighted that this is exactly what happened: our NAV per share as of 31 December 2015 increased by 40% to US$1.91, despite two sizable write-downs. It is especially pleasing to see that a number of companies in which we invested at an earlier stage have attracted the attention of large, blue-chip investment groups at higher valuations in order to fund their continued growth.
We continue to see exciting investment opportunities in our chosen sectors and look forward to updating our shareholders on the Company's progress in the near future."
The Annual Report and Accounts for the year ended 31 December 2015 are available on the Company's website at www.tmtinvestments.com, where an electronic copy can be accessed.
For further information contact:
TMT Investments Plc Alexander Selegenev www.tmtinvestments.com
+44 1534 281 843
alexander.selegenev@tmtinvestments.com
ZAI Corporate Finance Ltd. NOMAD
Richard Morrison/ Peter Trevelyan-Clark/ Irina Lomova
+44 20 7060 2220
Hybridan LLP Broker
Claire Louise Noyce
+44 20 3764 2341
EXECUTIVE DIRECTOR'S STATEMENTKinlan Communications David Hothersall
Tel. +44 20 7638 3435
davidh@kinlan.net
2015 has been a successful year for the Company, with a big number of sizable revaluations across our portfolio. As a result, our NAV per share as of 31 December 2015 increased significantly to US$1.91 (up 40% from US$1.36 as of 31 December 2014). Importantly, this result takes into account two sizable impairments that were not triggered by any actual independent transactions, but which the management considered appropriate to recognise at this stage. TMT has now invested in 39 companies since its flotation in December 2010 and has a diversified portfolio of 31 investees focused primarily on mobile software applications, cloud solutions, social discovery shopping, and business SaaS tools.
Portfolio Performance
For the last few years we have noted the biggest "reporting challenge" faced by the Company, which is in the business of investing in earlier-stage, privately held companies that typically do not have a sufficiently long history of earnings. This means that, regardless of how impressively some of our portfolio companies may have grown in terms of revenue and operating metrics, positive changes in fair value of our portfolio companies cannot be justified under the IFRS rules unless there has been an independent equity financing round or other measurable reliable evidence to support a change in the valuation. On the other hand, any write-offs or impairments are recorded immediately as negative revenue on the Company's Profit and Loss Account. 2015 was an important year for the Company, as we were delighted to see a large number of significant positive portfolio revaluations among our portfolio companies. It is especially pleasing to see that a number of companies in which we invested at an earlier stage are now attracting the attention of large, blue chip investment groups at higher valuations to support their continued growth.
The following developments took place within the Company's portfolio in 2015:
Cash and part-cash exits:
In September 2015, the Company's portfolio company Kanvas Labs, Inc. ("Kanvas") was acquired by AOL, Inc. TMT's total maximum potential consideration for the transaction (including amounts in escrow) is US$797,529, representing a premium of approximately US$247,000 (or 45%) to the value of TMT's original investment in Kanvas made in November 2011 and March 2013, or an internal rate of return ("IRR") of up to 11%.
In November 2015, the Company sold a small part of its equity stake in Pipedrive, Inc. ("Pipedrive"), a SaaS- based sales CRM software provider, for US$249,490 in cash. (Please see further details of this transaction in the "Positive non-cash revaluations" section below.)
Positive non-cash revaluations:
In February 2015, Drippler, a mobile tech discovery media service, completed a sizable equity financing round. The transaction represents an uplift of approximately US$97,000 (or 48%) in the fair value of TMT's investment in Drippler, compared to the amount announced as of 30 June 2014.
In April 2015, Wrike, a SaaS-based work management platform, completed a US$15 million equity financing round. The transaction represents an approximately US$2.3 million (or 116%) uplift in the fair value of TMT's investment in Wrike, compared to the latest reported amount reported as of 31 December 2014.
In April 2015, Pipedrive, a SaaS-based sales CRM software provider, completed a US$9 million equity financing round led by Bessemer Venture Partners. The transaction represents an approximately US$1.82 million (or 235%) uplift in the fair value of TMT's investment in Pipedrive, compared to the latest reported amount as of 31 December 2014.
In May 2015, farm management software provider VitalFields completed a new equity financing round. The transaction represents an uplift of approximately US$36,000 (or 27%) in the fair value of TMT's investment in VitalFields, compared to the latest reported amount as of 31 December 2014.
In June 2015, PandaDoc, a SaaS-based sales management tool, completed a US$5 million equity financing round. The transaction represents an uplift of approximately US$90,000 (or 22%) in the fair value of TMT's investment in PandaDoc, compared to the latest reported amount as of 31 December 2014.
In September 2015, Drupe, a mobile app that brings all your contacts and communication apps together in one place, completed an equity financing round. The transaction represents an uplift of approximately US$0.3 million (or 132%) in the fair value of TMT's investment in Drupe, compared to the latest reported amount as of 31 December 2014.
In October 2015, Virool, a native video advertising platform, completed a sizable equity financing round. The transaction represents an approximately US$1.31 million (or 161%) uplift in the fair value of TMT's investment in Virool, compared to the latest reported amount as of 31 December 2014.
In November 2015, the Company sold a small part of its equity stake in Pipedrive, Inc. ("Pipedrive"), a SaaS- based sales CRM software provider. The transaction represents a further US$751,212 (or 29%) uplift in the fair value of TMT's investment in Pipedrive, compared to the amount announced as of 30 June 2015. TMT's cash consideration received pursuant to the transaction is US$249,490. The Company's remaining equity stake in Pipedrive is worth approximately US$3.1m, which represents a further US$0.5m uplift compared to the previous valuation announced as of 30 June 2015.
In December 2015, LeTote, a Netflix-style fashion rental platform, completed a US$15 million equity financing round. The transaction represents an uplift of approximately US$0.62 million (or 137%) in the fair value of TMT's investment in LeTote, compared to the latest reported amount as of 31 December 2014.
In December 2015, Depositphotos, a stock photo marketplace, completed a US$5 million equity financing round, led by the venture capital arm of the European Bank for Reconstruction and Development ("EBRD"). The transaction represents an uplift of approximately US$8.12 million (or 163%) in the fair value of TMT's investment in Depositphotos, compared to the latest reported amount as of 31 December 2014.
Based on the results of an independent valuation report commissioned by Backblaze, Inc. ("Backblaze"), the fair value of TMT's equity stake in Backblaze has increased by approximately US$3.4 million (or 55%), compared to the amount reported as of 31 December 2014.
Impairments and write-offs:
The Board of TMT considers it prudent to incur an impairment charge equal to US$1,527,383, or 51.2% of the fair value of the Company's investment in Unicell. Unicell's traditional business has reduced significantly in the last two years, and the company is quite leveraged. On the other hand, Unicell's 50% equity stake in Pango, a successful and fast-growing parking payment operator in Israel, has become more valuable. The combined valuation produces the fair value of TMT's stake in Unicell of US$1,455,088, compared to US$2,982,471 reported as of 31 December 2014.
Online games developer AppsIndep, in which TMT invested in 2012, has experienced difficulties in gaining satisfactory traction for games launched in the last two years. Accordingly, the Board of TMT considers it prudent to incur an impairment charge equal to US$1,397,764, or 75% of the fair value of the Company's investment in AppsIndep reported as of 31 December 2014.
Key developments for the 10 largest portfolio holdings in 2015 (compared to 2014; source: TMT's portfolio companies)
Depositphotos (photobank):Revenues up 21%
Total number of files in the photobank up 45%
$5m new equity raised, with EBRD leading the round
Backblaze (online data backup and cloud storage provider):Revenues up 25%
Total number of licensed computers up 30%
Launched "B2": a new low-cost commercial cloud storage product (direct competitor of Amazon's S3).
Wanelo (online social shopping platform):Revenues up 311%
Total subscribers up 19%
Over 550,000 stores and 30 million products on the platform
Wrike (work management and collaboration software):Revenues up 131%
Total number of paid accounts up 55%
$15m new equity raised from Scale Venture Partners
Pipedrive (sales CRM software):Revenues up 116%
Total paying customers up 84%
$9m new equity raised from Bessemer Ventures
Adinch (online advertising platform):Revenues up 24%
Russian part of the business negatively affected by the financial crisis
Virool (native video advertising platform):Sizable new equity round completed
Significant growth in new clients and revenues
Unicell (provider of digital marketing solutions and mobile applications and services):Traditional business is not growing
Generally breakeven, but quite leveraged
50%-owned Pango, a parking payment operator in Israel, is fast-growing and successfully developing
LeTote (Netflix-style fashion rental platform):Revenues up more than 400%
$15m new equity raised
Anews (news reading app):Total app downloads up 33% to over 3.5m
Revenues up 56%
New investments
In 2015 the Company invested US$400,000 in fragrance subscription service ScentBird, as well as made additional investments in two existing portfolio companies (US$1,000,000 in Depositphotos and US$27,000 in Weaved).
NAV per share
The Company's net asset value per share as of 31 December 2015 increased to US$1.91 (31 December 2014: US$1.36).
Operating Expenses