Augmentum Fintech remains bullish on fintech, despite slashing investment

Listed fintech fund Augmentum Fintech said today that its belief in the “potential of the sector remains as strong as ever”, despite slashing its fintech investment in the second half of the year.

The backer of fintechs including Zopa and Tide reported that it has invested £16.4m in fintech in the second half of its financial year ending March 31 2022, a marked slowdown compared to the £44.4m it invested in the first half of the period.

Tim Levene, CEO of Augmentum Fintech, said economic uncertainty and the changing geopolitical situation in Europe had contributed to its slowdown in fintech investment.

Levene also flagged up new investors in fintech who were willing to “pay any price to build exposure” as another reason for curbing investment.

He added: “We are starting to see some of this money leave the sector which will continue to lead to a healthy correction in entry prices later this year and beyond. 

“We must remain disciplined on price while continuing to deliver advantaged deal access for our shareholders."

“Our belief in the potential of the sector remains as strong as ever, yet our investment bar must remain high.”

Augmentum Fintech, which is the UK’s only publicly listed investment company solely focused on the fintech sector, reported that its portfolio of investments increased Net Asset Value (NAV) per share after the performance fee by 19 per cent to 155.2p, compared to 130.4p the previous year.

Over the year, it invested £60.8m in seven new fintechs and seven existing fintechs, compared to the previous year when it invested £15.4m in two new fintechs and 11 existing firms.

The total equity raised by its portfolio of fintechs came to £1.3bn.

Highlights of the year include portfolio company Interactive Investor being acquired by Abrdn for £1.5bn’; Grover completing a €113m Series C funding round and Tide growing its market share of UK SME banking to 7 per cent.

Augmentum is currently sitting on c.£60m of 'dry powder' - cash it is yet to invest - a big portion of which comes from the sale of Interactive Investor.

Neil England, chairman of Augmentum Fintech added: “The company’s portfolio of investments has again performed very well with an increase in NAV) per share after a performance fee of 19 per cent.

“However, the share price and total shareholder return do not reflect the strong performance of the portfolio and have been influenced by the global markdown of listed technology stocks and associated market sentiment.”

In May this year, Augmentum Fintech-along with Tencent-invested in fintech Previse.

The round was led by Tencent, with participation from existing investors including Reefknot Investments and Augmentum Fintech.