Molten Ventures — Investor day: Five strategic priorities outlined

Molten Ventures (LSE: GROW)

Last close As at 19/02/2025

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Research: Financials

Molten Ventures — Investor day: Five strategic priorities outlined

During Molten Ventures’ recent investor day, Ben Wilkinson (who was appointed CEO in October 2024 after serving as Molten’s CFO for eight years) outlined the strategic priorities for the business. These are centred around five initiatives: (1) refocusing on the core business of investing in Series A and B rounds; (2) driving further scale and efficiencies; (3) a selective approach within its fund of funds programme; (4) preserving a strong balance sheet; and (5) narrowing the discount to NAV. Molten announced that it will allocate an additional £15m to share repurchases (on top of the £15m already committed). The total buyback volume is therefore greater than the 10% of realisation proceeds earmarked as part of Molten’s current capital allocation policy. Molten’s board expects to commit further capital for share repurchases if the wide discount to NAV (currently at c 47%) persists.

Milosz Papst

Written by

Milosz Papst

Director of Content, Investment Trusts

molten03

Investment companies

Listed venture capital

18 February 2025

Price 344.50p
Market cap £640m
Shares in issue 185.7m
Code/ISIN GROW/GB00BY7QYJ50
Primary exchange LSE
AIC sector
52-week high/low 432.5p 215.0p

Fund objective

Molten Ventures is a UK 250, London-based venture capital (VC) firm that invests in the European technology sector. It has a portfolio of 100+ investee companies and includes a fund of funds programme (as well as EIS and VCT schemes) in the group, as well as its flagship balance sheet VC fund.

Bull points

  • Strong position in the European VC landscape coupled with extensive expertise.
  • Downside protection from deals structured through preference shares.
  • Strong recent realisation activity supporting new investments and share buybacks.

Bear points

  • Share of European VC down rounds remains above pre-2023 levels, suggesting that pressure on valuations has not fully abated.
  • Continued low exit activity in the VC markets, although Molten has delivered solid realisation proceeds recently.
  • Strong discipline in selecting new investments needed to offset the dilutive impact of Molten’s last share issue.

Analysts

Milosz Papst
+44 (0)20 3077 5700
Dan Ridsdale
+44 (0)20 3077 5700

Molten Ventures is a research client of Edison Investment Research Limited

Sharpened focus on core investment opportunities

As we noted in our December 2024 update note, Molten has seized several exit opportunities in the current financial year (ending March 2025) from which it expects to receive total proceeds of over £150m (with EIS/VCTs receiving a further £70m). Coupled with the extended credit facility, this provides Molten with a good balance sheet position for primary investments (new and follow-on deals) and secondary investments at discounted prices to position its portfolio ahead of the next VC cycle. The company highlighted that, given the expected realisation profile of its portfolio, it will not seek to raise new equity for the foreseeable future (its last share issue was completed in December 2023; see our May 2024 note for details).

The CEO believes that Series A and B investments are where Molten’s reputation and track record are strongest and where there is ‘the most compelling need for capital’ in the European VC market. The company aims to develop structures that would provide institutional investors with the opportunity to co-invest alongside Molten in Series B rounds. This would support Molten’s deal flow and consistent deployment in later stage deals, allowing it to participate in a greater number of rounds a year. Molten’s intention to launch a growth (Series B+) co-investment fund was put on hold in 2023 given the unfavourable market environment at that time. As conditions across VC markets are gradually improving, the company is now revisiting the idea of a co-investment structure.

The CEO acknowledged that Molten’s fund of funds programme remains an important source of insights and investment opportunities, although going forward Molten will focus on a narrower set of managers that it has the best relationships with. Overall, it has committed to around 80 managers since the start of the programme in 2017.

NOT INTENDED FOR PERSONS IN THE EEA

Over £100m deployed so far in FY25

Molten Ventures has invested £70m so far in FY25 (with a further £34m deployed via EIS/VCTs), including seven new primary investments, in line with the usual six to 12 new investments a year. These include: Concretene (which is developing a graphene-enhanced admixture to reduce the carbon footprint of concrete), Deciphex (which is building a global network of AI-powered pathologists), Modo Energy (a software-as-a-service (SaaS) data analytics platform for renewable energy assets), One Data (providing an AI-powered data product builder), Renew Risk (offering risk modelling and analytics for renewable energy assets), SalesApe.ai (offering AI sales agents) and Sightline Climate (which provides a climate-first market intelligence platform).

A generational shift in technology

Molten’s CEO highlighted that it is an exciting time to invest in the European technology sector given the unfolding generational shift in technology, most notably attributable to AI, automation and robotics, but also Internet of Things (IoT) and edge computing, advanced semiconductors, quantum computing, climate and circular economy tech, spacetech, biotech and synthetic biology, AR/VR/XR, cybersecurity and data privacy, digital health, as well as fusion energy. Molten’s current portfolio has exposure to most of these themes, grouped into four sectors: Enterprise & SaaS, Hardware & Deeptech, Consumer Technology and Digital Health.

The investor day provided insights into several of these themes from members of the Molten team and representatives of selected portfolio holdings, such as Riverlane (a provider of semiconductors and software for quantum error correction), Form3 (a provider of a cloud-native, real-time payment technology platform), causaLens (developer of causal AI-powered products), MOSTLY AI (provider of tools to generate synthetic data using AI), Material Exchange (a SaaS-enabled apparel and footwear marketplace), ICEYE (an operator of a constellation of synthetic aperture radar satellites), Freetrade (a challenger stockbroker whose exit Molten recently agreed), Altruistiq (a climate tech business providing an emission reduction model) and the aforementioned Sightline Climate.

Investor Day 2025: CEO update – Ben Wilkinson

Source: Molten Ventures
Edison executive interview with CEO Ben Wilkinson

Source: Edison Investment Research

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