Katalysen Ventures AB (publ) hereby publishes the report for the second quarter of 2023.
General KPIs [thousand SEK]:
Q2 2023 Group, (Q2 2022 in brackets)
- Net sales: 716 (496)
- Profit after financial items: -9 928 (-5 953)
- Balance sheet total: 89 271 (102 970)
- Solidity: 94% (98%)
- Earnings per share: -1.49 (-1.07)
- Number of outstanding shares: 6 675 209 (5 570 005)
Q2 2023 Parent company, (Q2 2022 in brackets)
- Net sales: 716 (469)
- Profit after financial items: -7 833 (-4 938)
- Balance sheet total: 91 042 (102 327)
- Solidity: 98% (99%)
- Earnings per share: -1.17 (-0.89)
- Number of outstanding shares: 6 675 209 (5 570 005)
Venture Development KPIs (last period in brackets)
- Number of ventures in portfolio at end of period: 24 (26)
- Estimated portfolio market value at end of period: 167 MSEK (180 MSEK)
- Cash resources in bank at end of period: 0.7 MSEK (5.5 MSEK), note that a share issue was completed after the 2023 Q2 period, adding 3.7 MSEK to the company's cash reserves
Important events during the period
- Apr 6: Katalysen Ventures published its annual report for 2022 (available at ir.katalysen.com).
- Apr 18: Katalysen Ventures formed strategic partnership with issuing specialist Nordic Issuing.
- Apr 18: Katalysen Ventures announced that portfolio venture Manico is preparing a possible IPO.
- Apr 19: Katalysen Ventures announced Mangold Fondkommission AB as liquidity gurantor for the company’s shares traded on Spotlight Stock Market.
- Apr 19: Katalysen Ventures’ portfolio company InvitePeople reported strong progress in DACH.
- Apr 24: Katalysen Ventures appointed Anders Dahlgren as new full-time CFO.
- Apr 27: Katalysen Ventures held its 2023 AGM. The Parent Company's and the Group's income statements and balance sheets for 2022 were established and approved. It was decided that dividends will not be paid out for the period. The Board of Directors and the CEO for the financial year 2022 were discharged from liability. The sitting Board of Directors was re-elected, Heinrich Weber was re-elected as Chairman of the Board of Directors, and Öhrlings PricewaterhouseCoopers AB was re-elected as auditor. Renumeration to independent members of the Board of Directors will remain unchanged. Additionally, the AGM granted the Board of Directors an authorization to conduct share issues.
- May 16: Katalysen announced a new venture development agreement with Manico, to support the venture in its upcoming IPO project.
- May 23: Katalysen Ventures published its 2023 Q1 report.
- May 24: Katalysen Ventures announced an LOI for a merger between its portfolio venture Alaco Analytics, and VALEGA Chain Analytics.
- June 5: Katalysen Ventures announced seizure of operations for two portfolio ventures, PRFKT Rights AB and OptiMobile AB.
- June 6: C-Quadrat Investment Group and Katalysen Ventures announced an intention to explore the launch of a Nordic, early-stage venture capital fund.
- June 8: Katalysen Ventures portfolio venture Swiperoom announced a strategic partnership and merger plans with Bytboo.
- June 13: Katalysen Ventures announced a strategic partnership with Gärde Design, to provide startups with world-class brand and design support.
Important events after the period
- July 10: Katalysen Ventures announced the closure of a successful share issue, adding approximately 3.7 MSEK to the company's cash reserves.
- Aug 11: Following up on the May 24 announcement above, Katalysen Ventures announced that it has become a partner and shareholder in fast growing digital forensics company VALEGA Chain Analytics, via a sale of IP from its portfolio company Alaco Analytics. VALEGA offers corporate customers an easy-to-use compliance tool, which analyses the data in monetary transactions and promotes greater transparency and security within the digital-asset sector. The company is exceptionally well positioned for the new regulatory framework dubbed ”Markets in Crypto Assets (MICA)”, which will successively enter into force between June 2023 and June 2024. VALEGA also offers a set of services within cryptocurrency forensics, a market that has grown substantially in the past couple of years. The transaction is jointly made with Katalysen Ventures’ portfolio company Alaco Analytics and will result in an initial ownership stake of 10% in VALEGA with an additional 15% stake conditional on certain milestones. Katalysen Ventures’ chairman Heiner Weber will join the board of VALEGA, and VALEGA becomes the latest addition to Katalysen Ventures’ portfolio.
Report from CEO Peter Almberg
From 2017 to the first half of 2023, we invested resources worth approximately 138 MSEK into our portfolio of early-stage innovation start-ups. This includes both liquid capital and all operational expenditures. We noted remarkable growth during the buoyant market phase from 2019-2021. This was followed by a period marked by relative valuation stability in the portfolio despite global disruptions such as the 2020 pandemic and geopolitical tensions following the 2022 Russian invasion of Ukraine. Noting that unique deals have become available in this interesting market, we have continued to invest resources, albeit at a slower pace and with a focus on opportunistic deals that simultaneously strengthen the existing portfolio.
We note that the Katalysen share was trading at a 35% discount to the company's Net Asset Value (NAV) at the close of Q2, no doubt linked to the often illiquid nature of early-stage assets. In the medium-term, Katalysen will have to display its full ability to nurture repeated exits from the portfolio via avenues such as IPOs, trade sales, or Series A/B exits. Shorter-term, our time as venture developers is best invested into preparing individual ventures for a market upswing, fortifying Katalysen's own resilience, and pursuing opportunistic deals whenever possible.
Allow me to elaborate on the first two:
1. Optimizing Portfolio Ventures for Market Upswings: The recent period has seen very encouraging progress within portfolio ventures. For instance, Manico's IPO is progressing well, underscored by solid sales growth. Skawen reported record sales, and iReality is about to introduce SkyRunner – a product backed by five years of rigorous R&D, attracting international attention. Notably, these three ventures, where we hold an average 19% share, currently constitute only 14% of the total portfolio value. Meanwhile, ventures such as InvitePeople and MealMakers continue their steady ascent. The merger of Alaco Analytics and VALEGA Chain Analytics further reflects our commitment to continuously develop the portfolio.
2. Fortifying Long-Term Resilience: Strengthening Katalysen's resilience has led to some important decisions. By the end of Q1, we had implemented previously announced cost-saving strategies. Our vision for Katalysen involves a dynamic core team adept at propelling entrepreneur-led ventures forward. Collaborations with co-development partners, such as our partnership with Gärde Design, augment our venture development capabilities. Similarly, this co-developer framework has unlocked unique partners for Manico, partners with experience that is typically hard to access in early-stages. With this focus on fortifying long-term resilience, pragmatic choices are often demanded, both from us and the entrepreneurs we work with. After displaying plenty of grit and carefully evaluating the options available, two portfolio companies filed for bankruptcy during the period (PRFKT and Optimobile, as previously communicated), contributing to the decline in portfolio value during the quarter.
Additionally, VenturePort is an exceptionally interesting venture in the portfolio, but at a stage of high development activity. A decision was made during the quarter to recalibrate to the current market, bolstering VenturePort's medium-term sustainability, but also decreasing its short-term valuation in our portfolio.
Longer-term, Katalysen is undoubtedly exit-driven – this has been the plan all along, and we have conducted two exits historically. Shorter-term, we prefer to lean towards alternative avenues over divesting high-potential ventures at less-than-ideal valuations. After the Q2 period, we executed a modest share issue. The board suggests that an additional warrant issue might occur in Q3, and an Extraordinary General Meeting (EGM) will be convened for shareholder consensus.
In conclusion, immediate focus is on prepping our portfolio ventures for an eventual market upswing and bolstering resilience in the interim. Early signs from the US suggest an early-stage stabilization, which is encouraging. We're also keen on forging alliances with institutional partners unfamiliar with early-stage investments, offering them a favourable entry point into the segment. The past quarter saw significant strides towards initiating a financial instrument to attract sizable institutional capital. Our collaboration with the European asset manager, C-Quadrat Investment Group, marks a monumental step in potentially launching a strategic VC-fund. The advancements in these initiatives have been very promising, and we look forward to continuing our intense efforts towards making the most of the current, highly interesting market.