Tmt Investments Share Discussion Threads

[sev22] 25/10/2021 18:22

Exploiting market anomalies.
By Simon Thompson, Investors Chronicle, 25th October 2021.

Backblaze IPO supports TMT investment case.

*Hugo stake sold for $3.78m, or 112 per cent premium to book value.
*IPO of cloud storage company Backblaze to raise $100m.

TMT Investments (TMT:920¢), a venture capital company that invests in high-growth, internet-based companies, has announced the disposal of its 3.55 per cent stake in Central American delivery and transportation technology company Hugo and the Nasdaq IPO of its second-largest investment, cloud storage group BackBlaze.

The Hugo exit represents a 112 per cent premium to the $1.78m book value of TMT’s 3.55 per cent stake and comes only 33 months after the company made its initial investment. This means that TMT has realised US$20.1m from exits since its 2021 half-year results on 18 August 2021. Furthermore, the company looks set to reap hefty gains on its 9.97 per cent stake in Backblaze. TMT first invested $5m in July 2012 and 2013, made a partial $2m disposal in 2019, and the holding was last valued at $56m (178¢ a share) at 30 June 2021 after which TMT invested an additional $2m in August.

I expect the IPO to be well received given the strong dynamics supporting explosive growth in digital data creation and consumption. These include artificial intelligence and machine learning, regulatory and compliance requirements (driving retention of data), and cybersecurity threats, such as ransomware, all of which make it imperative for organisations to scale up and secure their digital data storage.

Servicing 485,000 customers across more than 175 countries, Backblaze protects their business data on storage capacity of two trillion megabytes. The group’s revenue increased 25 per cent to $31.5m in the first half of this year, an organic growth rate that looks set to be maintained. Based on analysis of International Data Corporation data, Backblaze’s opportunity in the mid-market for Public Cloud Infrastructure-as-a-Service is forecast to grow to $54.6bn by 2025 (compound annual growth rate of 27 per cent) and for Data-Protection-as-a-Service to $11bn by 2025 (CAGR of 19 per cent).

True, Backblaze is lossmaking, posting a $6m pre-tax loss in the first half of 2021. However, with gross margin of 50 per cent (75 per cent excluding non-cash depreciation and amortisation costs), and net revenue retention rates above 100 per cent (average revenue per customer has risen 30 per cent to $133 in the past four years), then this is a highly scalable operationally geared business. It has also required limited outside investment since being founded in 2007.

At a $1bn potential post-money valuation on listing, the group’s holding in Backblaze would lift my pro-forma net asset value (NAV) per share by 15 per cent to 900¢. I have also taken account of the Hugo realisation, and TMT’s recent $19.3m equity raise, at 850¢. The bottom line is that TMT’s shares could be trading close to spot NAV before the year-end, a valuation that fails to reflect potential for further profitable exits from a portfolio of more than 50 investee companies. BUY.

[sev22] 21/10/2021 20:19

TMT invests in another high-growth technology company:

[sev22] 11/10/2021 19:07

Another successful company supported by TMT investments:https://www.p2pfinancenews.co.uk/2021/10/11/german-third-quarter-lending-boosts-estateguru-loanbook/

[sev22] 10/10/2021 09:59

Last-Mile Delivery Company MetroSpeedy Raises $5 Million:

[sev22] 04/10/2021 08:44

Bargain Shares: TMT Investment’s offer worth backing.

A subscription offer from a venture capital company that invests in high-growth, internet-based companies is worth taking up, but you will have to act quickly.

October 4, 2021
By Simon Thompson

US$18.5m placing and US$1.5m subscription offer at 850¢.
Depositphotos and PandaDoc transactions result in 30 per cent plus revaluation uplifts.
TMT’s management and shareholders forming part of Concert Party subscribe for 598,799 shares in offer.

TMT Investments (TMT:895¢), a venture capital company that invests in high-growth, internet-based companies, is raising US$18.5m through a conditional placing and US$1.5m through a PrimaryBid.com subscription offer at 850¢ a share. The announcement was made as the market closed on Friday, 1 October and the PrimaryBid offer is open until 12pm today. It’s worth buying into.

In the first six months of 2021, TMT reported a 23 per cent rise in net asset value (NAV) from $177.9m to $218.6m (749¢ a share), buoyed by gains on two its largest holdings: global ride-hailing and food delivery company Bolt ($30m valuation uplift to $66.2m on TMT’s 1.42 per cent stake), and proposal automation and contract management software provider PandaDoc ($10.4m uplift to $14m on TMT’s 1.32 per cent). TMT has subsequently sold 11 per cent of its interest in Pandadoc for US$2m, implying a fair value uplift of 30 per cent.

The company has also signed a conditional agreement to dispose of its entire holding in Depositphotos, a leading stock photo and video marketplace, for US$14.3m in cash. This represents a revaluation uplift of US$3.5m (or 32.2 per cent) compared the 30 June 2021 valuation. These two transactions increase TMT’s proforma NAV per share to 775¢. Since the half year-end, the company has also made a further 12 investments worth $13m, and currently has net cash of US$11.2m (38¢).

The placing and subscription offer not only widens the shareholder base, but will enable TMT’s investment managers to take advantage of an attractive pipeline of further investments. The offer is effectively pitched at a 9.6 per cent premium to proforma NAV, a price point that reflects investment managers impressive track record, having generated an eye-catching NAV-based internal rate of return (IRR) of 34.2 per cent over the past five years, and increased NAV per share 675 per cent since IPO in December 2010.

TMT’s shares have risen from 318¢ to 870¢ on an offer-to-bid basis since I turned buyer again 16 months ago (‘On the hunt for recovery buys’, 6 July 2020), and are currently offered in the market at 895¢, in line with the level of my last buy recommendation ('Bargain Shares: On the technology beat’, 24 August 2021). I advise taking up the PrimaryBid offer before the 12pm deadline today and continue to rate the shares a buy.

[sev22] 30/9/2021 19:46

Looks like TMT participated:

[sev22] 26/8/2021 07:14

Here is Simon Thompson's recommendation in full from yesterday:

NAV per share surges 23 per cent in first six months of 2021.
Massive valuation uplifts on stakes in Bolt and PandaDoc following successful equity funding rounds.
Profitable exits from two investee companies.
20 investments worth $21.4m made in 2021.

TMT Investments (TMT:898¢), a venture capital company that invests in high-growth, internet-based companies, has reported a 23 per cent rise in net asset value (NAV) from $177.9m to $218.6m (749¢ a share) in the first six months of 2021, buoyed by eye-watering gains on two its largest holdings.

The major contributors were global ride-hailing and food delivery company Bolt ($30m valuation uplift to $66.2m on TMT’s 1.42 per cent stake), and proposal automation and contract management software provider PandaDoc ($10.4m uplift to $14m on TMT’s 1.32 per cent). Both investee companies completed equity funding rounds at significant premiums to the pre-money valuations used in TMT’s carrying valuations, thus highlighting the conservative nature of its accounting practises.

True, there was no movement on TMT’s second-largest holding, a 9.97 per cent stake in cloud storage provider, Backblaze, which remains valued at US$56m (192¢). However, in the event of an IPO of the company, as seems highly likely, the stake could easily be worth double TMT’s carrying value as I reported at the end of last year (‘Exploiting share price dislocations’, 7 December 2020). Moreover, it would wipe out TMT’s current 20 per cent share price premium to NAV at a stroke.

Importantly, there was enough movement on smaller holdings to suggest that TMT’s investment managers have been working their magic again, successfully recycling the US$41m cash proceeds from last December’s exit from customer relationship management software tool developer Pipedrive.

For example, TMT’s 1.22 per cent stake in Novakid, an English language school for children, has been revalued from $500,000 to $2.3m after the company completed a new equity funding round. TMT only made its investment last November. In addition, 3S Money Club, a UK-based bank challenger providing corporate clients with multi-currency bank accounts, completed a new equity funding round which led to an uplift of $1.9m (to $5.2m) in the fair value of TMT's investment. The company first invested in April 2020.

In the first half, the investment managers made $14.1m of investments across 13 new and existing portfolio companies, and have completed a further seven investments, worth $8.3m, since the 30 June 2021 period end including: a further $640,000 in Novakid; $2m in Collectify, a tech-enabled patient billing platform; $1.1m in VertoFX, a UK-based cross-border payments and foreign exchange solution that is rapidly expanding in Africa; and $1m in Academy of Change, a personalised educational service for women on lifestyle topics. TMT still has $14.2m of cash reserves to deploy, so expect further investments to be made.

In my opinion, there is clear potential for TMT to realise further material investment gains on its portfolio of 45 investee technology companies, the majority of which are focused on big data/cloud, e-commerce, SaaS (software-as-a-service), marketplaces and EdTech, areas that are benefiting from the accelerated shift to online consumer habits and remote working. Indeed, the tech venture capital investment space is one of the few beneficiaries of the new market environment caused by Covid-19. Importantly, the general trends in the digital technology sector are also leading to highly profitable exit opportunities – TMT booked $1.6m of gains in the first half from two full exits, for example.

TMT’s shares have risen from 318¢ to 870¢ on an offer-to-bid basis since I turned buyer again 13 months ago (‘On the hunt for recovery buys’, 6 July 2020), albeit the share price has pulled back from the 1,100¢ level when I suggested running profits ahead of this month’s results (‘Bargain shares: Tapping into high growth technology stocks’, 6 July 2021). The share price subsequently hit 1,290¢ after that July article was published before profit taking took hold. I think it has now run its course.

So, with TMT’s shares currently priced around 900¢, the risk-reward is skewed to the upside once again for a company that has generated an eye-catching NAV-based internal rate of return (IRR) of 34.2 per cent over the past five years, and increased NAV per share 650 per cent since IPO in December 2010. TMT has paid out special dividends from realisations, too.

Please note that 81.8 per cent of the 29.2m shares in issue are owned by the 10 largest shareholders in the $263m market capitalisation company, so a below-average free float means that the shares can be volatile. I have taken factor this into account. STRONG BUY.

[sev22] 25/8/2021 09:15

Bargain Shares: 'On the technology beat.'

A venture capital company that invests in high-growth, internet-based companies has increased NAV per share by 23 per cent in the past six months, and has clear potential to generate further material gains.

Tipped by Simon Thompson in the IC this morning.

Forecasting a return to previous highs of 1,290¢ in the short term.

[andrbea] 08/7/2021 11:53

we're climbing again (up 6%)

[widescreen07] 26/5/2021 12:16

Looks promising andrbea, thanks for flagging! Looks like an interesting bunch of companies presenting.

[andrbea] 25/5/2021 15:13

TMT due to appear

[petrossian] 09/4/2021 13:09

This may explain why



TMT’s eye-catching results

163 per cent valuation uplift on Backblaze shareholding.
US$41m Pipedrive exit realises 51 times original investment.
Cash recycled into exciting new investments.

Annual results from TMT Investments (TMT:738¢), a venture capital company that invests in high-growth, internet-based companies, fully justified my decision to turn buyer on the shares, at 318¢ (‘On the hunt for recovery buys’, 6 July 2020).

Net asset value (NAV) per share surged by 73 per cent to US$178m (610¢ a share), buoyed by a US$29.3m gain on the sale of TMT’s holding in customer relationship management (CRM) software tool developer Pipedrive. Other major contributors were global ride-hailing and food delivery company Bolt (US$14.1m valuation uplift), and cloud storage company Backblaze (US$34.8m uplift).

Since admission to Aim in December 2010, TMT has invested in over 65 companies, realised 14 profitable full and partial exits, and increased NAV per share 6.4 times including dividends. The portfolio of 35 companies has real potential to deliver further material gains especially as TMT’s 10.85 per cent holding in Backblaze is still only valued at US$56m (192¢). The holding could double in value again if Backblaze gets anywhere near to achieving a rumoured US$1bn IPO (‘Exploiting share price dislocations’, 7 December 2020), a valuation supported by forecast growth in the global cloud storage service market from $50.1bn to $137.3bn by 2025 (MarketsandMarkets estimates).

TMT’s astute investment managers have been deploying a cash-rich balance sheet to make 16 investments including an additional US$0.5m in Scalarr, a machine learning-based fraud detection solution focused on the advertising market; US$0.5m in NovaKid and US$0.75m in Virtual Mentor, online schools for children learning English; and US$0.3m in perfume, wellness and beauty product subscription service Scentbird. The short-term impact of the Covid-19 pandemic on Scentbird’s revenues has been positive as the company continues to grow its annualised revenue at double-digits, and its subscriber base now exceeds 400,000, up 20 per cent year on year. TMT’s holding has doubled in value to US$6.6m in the past 12 months.

The same is true for TMT’s fifth largest portfolio holding, proposal automation and contract management software provider, PandaDoc. Its solutions, which enable sales teams to remotely manage their selling processes “from propose to close”, have become even more relevant since the Covid-19 pandemic, so much so that following a recent equity round TMT’s investment has been revalued upwards by 63 per cent to US$3.6m.

The bottom line is that with material gains likely to be realised on a conservatively valued portfolio, and net cash of US$34.6m providing ample firepower to fund more investments, the 16 per cent share price premium to NAV should be more than wiped out this year. Buy.

[mnuttall69] 26/3/2021 07:18

Yet again outstanding results announced yesterday. What a track record, pipeline and management team. Read the Report and then invest!

[gary1966] 07/12/2020 19:35

Have looked at these a few times but never got around to buying. Well done on the rise today.

Some of you may be interested in Primorus Investments which currently is valued at cash but has a few nice investments thrown in for free.

GLA

[warno01] 15/11/2020 14:01

Very good news. Been in this at $4.02 a share for a year with lots of movement. Think this should move to >$5 per share since it's been trading at about 15% above NAV. If you add a $ to the $3.46 NAV and then 15% we're in $5.10 territory

[petrossian] 13/11/2020 15:58

Did people see this?

$41m cash exit for Pipedrive stake!!

Shares have moved up but likely more to go as other investments crystallize and exit as well as new ones made and in pipeline. Very impressive!

[petrossian] 27/10/2020 14:55

Simon Thompson at IC backing TMT again, full article in their news section. Share price up already but could be lot more to to go.

hxxps://tmtinvestments.com/

[energeticbacker] 16/9/2020 08:43

For those wanting exposure to the exciting world of early stage companies, and the often stratospheric valuations they command, TMT could be an interesting vehicle. However, it is certainly not the place to be should sentiment change!

More on the Investor's Champion website.

[andrbea] 06/7/2020 19:31

Looked up Pipedrive.

About Pipedrive Inc.
Founded in 2010, Pipedrive is the first CRM platform developed from the salesperson's point of view. Today, Pipedrive is used by sales teams at more than 90,000 companies worldwide. Pipedrive, the top-rated CRM, is headquartered in New York, and has offices in London, Lisbon, Prague, Riga, Dublin, Tallinn, Tartu, and St. Petersburg, Florida. Learn more at www.pipedrive.com.