TMT Investments, the AIM-listed venture capital company investing in high-growth technology companies, has disposed of its entire holding in Wrike for a net aggregate cash consideration of US$22.9m.
The Board of TMT believes that the disposal demonstrates the Company’s ability to identify and invest in early-stage high-growth companies within the technology sector that have the ability to create significant shareholder value through capital appreciation.
TMT told GBI Magazine that the disposal represents a substantial uplift in the valuation of TMT’s investment in Wrike of approximately US$14.5m and will, on receipt of funds, result in a material increase in the Company’s available cash to over US$25m. The Company will continue to seek to identify and invest in opportunities within the technology sector and will keep shareholders updated of developments in this regard as appropriate.
The Company has also taken the prudent decision to impair its investment in Wanelo by approximately US$3.5m.
Despite the impairment of Wanelo, the disposal will result in a significant increase in the Company’s NAV of approximately US$11.0m, equivalent to approximately 37.5 cents per share (before adjustments for the Company’s ongoing operating expenses, bonus accruals, insignificant revaluations, potential future impairments, and similar items).
This represents a material uplift in the Company’s NAV of approximately 13.7% from the previously stated figure of US$2.75 per share as of 30 June 2018.
Alexander Selegenev, Executive Director of TMT, said: “Following Vista’s partnership with Wrike, we are delighted to have achieved our largest cash exit to date. Wrike has always been one of our largest portfolio stars, and we are very pleased at having identified such a talented and professional team, led by CEO and founder Andrew Filev, as Wrike’s very first institutional investor back in 2012. TMT originally invested US$1.0 million in Wrike, and the current exit proceeds are additional to the US$0.8 million TMT received from its partial exits from Wrike in 2017.
“The Board believes that a total return of over 23 times on our original investment demonstrates our ability to achieve significant capital growth for our shareholders by identifying and investing in early stage high-growth tech companies, which shareholders would be unable to access otherwise. Our focus as investors is on identifying companies that are capable of scaling up globally. Founded in 2006, Wrike is today used by over 17,000 organisations, with 1 million users in 130 countries.
“TMT continues to exercise a diligent impairment policy, with the Company’s management using its discretion to impair individual portfolio companies based on their perceived prospects, even in the absence of formal transactions. Accordingly, we have taken the decision to impair the carrying value of Wanelo to more accurately reflect Wanelo’s likely current valuation. Having originally invested only US$350,000 in Wanelo in 2011, the new impaired value of US$1.8 million still represents significant potential upside for TMT.”