The $7 billion stock market flotation of online car seller Cazoo has given a boost to venture capital firm Draper Esprit (GROW) which owns a stake in the business.

The value of Draper Esprit’s investment in Cazoo has more than tripled in a matter of months. Based on $9 per share, Draper Esprit’s holding in Cazoo is valued at £37 million. This equates to an increase of £11 million from a March 2021 valuation. From an net asset value perspective Liberum estimates this will add approximately 6p to Draper Esprit’s NAV.

Draper Esprit has enjoyed a good year on the stock market with its shares up 56% so far in 2021. Transaction activity has been high this year, with the firm making a total of £130 million of investments. This comprises of eight new and six follow-on investments.

It recently put in another £25 million to support platform technology group Form 3, as part of a broader £90 million ($125 million) fundraise.

Based on the valuation implied by the Form 3 fundraising, Draper Esprit’s gross fair value holding (before carry deductions) is approximately £58 million. Excluding the £25 million of newly invested capital, this is an uplift of approximately £23 million to the March 2021 gross fair value of £10 million. Liberum believe this will enhance NAV by 13p.

Both Liberum and Numis have positive reactions to the portfolio update.

Numis emphasises that Draper Esprit will also benefit from an £99 million uplift in the July Series E $800 million funding of Revolut, and a £38 million uplift from a marking to market of its Trustpilot holding.

It says: ‘These known uplifts total £171 million which compares against the March 2021 gross portfolio value of £984 million (17% return), suggesting another period of strong returns for the group.’

Liberum is equally bullish, saying: ‘We estimate recent funding rounds by portfolio companies added 74p (10%) to the March NAV….Strong gains from the public technology companies since March should also support strong NAV performance when the releases its trading update next month.’

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Issue Date: 17 Sep 2021