The boss of Europe’s leading listed VC fund today signified that the fintech market was returning to more stable valuations after the market “largely lost its head” in 2020 and 2021.
Tim Levene, CEO, Augmentum Fintech, said valuations “were kind of back to where we were in 2018 and 2019”.
Fintech valuation boomed in 2020 and 2021 but is now resetting amid a tightening of capital investment.
Augmentum, which backs UK challenger bank Monese, UK SME lender Iwoca, and German tech rental platform Grover, said the value of its top 10 investments, which make up 73 percent of its portfolio, grew from £182 million to £199 million in the six months to the end of September.
Augmentum upped the value of its stake in Zopa from £30 million to £34 million and from £36 million to £41 million in Tide. However, it cut the value of its stake in Grover from £43 million to £41 million.
Levene said Augmentum did not make any investments in new startups in the period, due to investments being priced too high.
He said 2023 had been a “tale of two halves”, with the first half “quieter” in terms of deal flows but Augmentum had started to see more quality companies coming to the market in the second half.
In the first half of the year, he said:
“I think a lot of companies resisted coming to the market unless they absolutely had to because they felt the market wasn’t necessarily conducive for fundraising.”
But Levene said startups were now returning to the market by necessity, as they needed to top up.
“We have been busier in the last quarter than the previous three quarters combined.”
Levene painted a cautiously upbeat picture moving forward but said that 2024 and 2025 could be “really strong vintages” for venture funds that “get it right”.
Shares in Augmentum were trading up over seven percent to 91.80p today.
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