London venture capital firm Triple Point hit by tech slump

The London-based company’s listed tech investment fund, Triple Point VCT 2011, saw its net asset value per share slump just over 10% to 102p in the year to the end of February, while total return per share fell 7% to 111p.

Chair Jane Owen signalled that the company’s fintech investments were among the worst performing over the year.

She said: “After perhaps excessive enthusiasm by investors and entrepreneurs between 2019 and 2021, funding became markedly more difficult to come by for companies that were demonstrating anything less than top tier revenue growth rates.

“Tightening monetary policy led to higher bond yields which in turn led to lower valuation multiples for stock market listed tech and growth companies as some of the heady optimism of the 2021 tech boom was deflated.”

Forward Partners, another London-based venture capital business, has also reported a decline in shareholder value in 2022, after its portfolio value sunk to £80 million from £117 million in the previous year. Its shares are down 42% over the past twelve months.

Susannah Streeter, Head of money and markets at Hargreaves Lansdown, said: ‘’Start-up tech companies are labelled as growth stocks and much of their value comes from the anticipation of future earnings. But as interest rates have ramped back up to tame wild inflation, that affects how those future revenue streams are calculated and valuations have been sideswiped.

“The fight for top tech talent has seen wage demands soar adding to costs and as the era of cheap money has hurtled to an end it’s been harder for many to access funding. This appears to be behind the sharp fall in value of Triple Point’s portfolio.

“There is still significant liquidity washing around the financial system, and although clearly there is more caution given the macro-economic climate, there are bright spots of investment. Companies in health-tech, logistics and innovations centred on improving how human resources are managed still attracting venture capital interest and the funding to match.

Seb Wallace, Investment Director Triple Point, said the decline in net asset value per share “recognised last year’s difficult macro-economic environment and its impact on the portfolio’s fair value. Indeed many investment funds, including our peers, made similar adjustments.

“Our fund is fundamentally geared towards investing in promising British startups.

“These investments are not only the backbone of our fund's growth but also catalysts for job creation and economic activity. Over the last year we have made 14 investments linked with over 100 new jobs, injecting fuel into our economy.”