Chrysalis Investments lifted 28% by early bets on Klarna and Starling Bank

By Oliver Smith on Wednesday 30 June 2021

Alternative LendingDigital BankingSavings and Investment

Impressive, even with Klarna’s latest $45.6bn valuation yet to be reflected in the group’s results.

Chrysalis Investments lifted 28% by early bets on Klarna and Starling Bank
Image source: Sebastian Siemiatkowski/Klarna.

Early bets on fintechs like Klarna, Starling Bank and Wise are paying off handsomely for listed investment fund Chrysalis Investments, which reported its interim results to 31 March today.

Per share its net asset value has risen 28.1 per cent in the six month period, with total net assets up 108.1 per cent from £542m to £1.128bn.

Klarna’s latest two latest fundraises, at a $30bn valuation in March and a $45.6bn valuation in June, are yet to be reflected in Chrysalis’s results, still its holding in the company has already grown over 270 per cent since 2019.

"The portfolio has continued to perform strongly, with several companies seeing exceptional growth. In certain cases, this has led to funding rounds at significant uplifts to our prevailing carrying values, including post period end,” said co-portfolio managers Nick Williamson and Richard Watts.

“We believe the trends underpinning many of these performances are well entrenched.”

The fund’s share price has also been soaring, up over 125 per cent in the last 12 months and 35 per cent this year alone, to currently trade at around 260p.

Since March, Chrysalis has also noted several additional deals, including a £35m follow-on investment in Starling Bank, €30m in wefox and £75m in Smart Pension just earlier this month.

In March Chrysalis also raised £300m to continue its investment approach and participate in follow-on opportunities, it today says one potential new investment is currently in the late stages of due diligence with further investments in earlier stages.

Not all the fund's bets have paid off, however. Growth Street, which it backed in 2019 to the tune of £12.6m, completed its wind down in April 2021 after a disastrous 2020 when two of its large loans defaulted. It's now worth a nominal £1.3m according to Chrysalis.

"Shareholders have more than doubled their money since Chrysalis launched in November 2018 and, with the value of its existing portfolio being substantially underpinned by recent portfolio company funding rounds and a strong pipeline of new investments identified, we believe the company is well placed to continue to generate material growth," said chair Andrew Haining.

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