Unicorn hunting fund with TransferWise and Revolut stakes ‘a buy’, say analysts

By Daniel Lanyon on 27th September 2018

Fintech

The investment company, launched just 18 months ago, is listed on the Alternative Investment Market.

Unicorn hunting fund with TransferWise and Revolut stakes ‘a buy’, say analysts

Draper Esprit, a venture capital focused portfolio that provides investors with access to many of Europe's technology innovators, is an attractive ‘buy’, according to analysts at investment bank Liberum.

The £619m Draper Esprit fund holds private positions in a host of well known fintech firms such as Transferwise, Revolut, Seedrs and Crowdcube as well as many other well known tech names.

The team behind the portfolio has over 20 years of experience in scaling high-growth technology companies with a long term outlook to build value over time, Liberum says. The company's NAV has increased by 36 per cent since inception in June 2016.

“We expect c.43 per cent NAV growth in the two years to 31 March 2020. We are initiating on Draper Esprit with a BUY recommendation,” Liberum said.

Draper Esprit saw aggregate average annual turnover growth of the core portfolio was 58 per cent and it has completed 10 exits since IPO with an average cash exit multiple of 3.15x.

Liberum says that with €17bn of VC deals in 2017, dry powder and government support in the UK and Europe for home grown companies growth in the sector is robust.

“We assume a 40 per cent  y-o-y growth of the core portfolio and £120m in acquisitions for the next two years. Our TP of 700p is based on a 10 per cent premium to the March 2020 NAV,” it added.

 

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