Yesterday, it was announced that the CFO is leaving there is a relatively long 6-month transition period until the end of July if needed, meaning there is plenty of time to recruit a replacement.
The CEO changed last summer, and one could imagine that this was a natural moment for a close working partner to also consider what they want to do next. Springvest is a compact organization, and key person risks are higher than usual. From a continuity standpoint, it’s also good that the current CFO will have had roughly 6-12 months to work with the new CEO before a new CFO takes over.
Antti has written a fresh company report on Springvest.
Despite the ice-cold IPO market, Springvest’s funding rounds have raised an amount of funding over the past 12 months equivalent to the peak levels of 2021. The company’s goal to increase round sizes appears to be progressing faster than we expected, and we have significantly raised our forecasts, which previously anticipated smaller rounds. In our view, the share price increase (+36%) since our previous report has already priced in this growth leap, assuming that exit activity remains calm, in line with our expectations.
I’m replying here in the company thread, as it fits better here. @OsakasOssi good question, which @Putti already commented on well, and here is my view.
Springvest has a fairly extensive group of investors ready, whom they can contact effectively. I dare say that the most potential investors for these funding rounds can be found on Springvest’s lists.
This is exactly what Springvest sells to those in need of funding, and what companies are willing to pay about 5% of the company’s ownership for. They also have good experience in what can be offered to investors and at what price. Evidence of this is that the rounds regularly reach the minimum target and are filled at a quite good rate.
So Springvest has a damn valuable email list
CEO Aki Soudunsaari was interviewed by @Antti_Luiro.
Topics:
00:00 Introduction
00:16 H2 summary
01:38 Market weakness not reflected in the figures
04:00 Investments in growth
05:12 Guidance
06:06 Changes in strategy and business
07:27 Financing packages
09:47 Springvest’s role as a growth partner
11:02 IPO market
14:38 An even more mature portfolio
Here is some operational reflection. I don’t know if Aki can be reached through the forum, but if not, @Antti_Luiro, please bring this topic up with Aki and share your thoughts here.
Would Springvest have the possibility to offer funding rounds with a sliding pre-money valuation that would be determined by how successful the round is?
If not, could you offer investors an investment commitment-type option, involving a so-called subscription reservation that turns into a subscription once the amount of money raised reaches a certain level in terms of investments/reservations? (The investor could decide the level)
I’m considering and asking these because currently, as Springvest mostly organizes multi-million euro funding rounds starting from zero, two situations can easily arise:
An investor makes an investment decision in the early stages of the round based on the round being fully subscribed. If the round happens to fall far short of full and ends up near the minimum, even if the pre-money valuation is the same, the investment case is likely completely different than in a fully subscribed round.
Due to the above, more and more investors may just stay on the sidelines monitoring the round’s progress, which can create a so-called unconscious “mass-wait,” where every investor is waiting for subscriptions from other waiters.
Or have you already come up with something for these?
Sisäpiiritieto: Springvest Oyj:n portfolioon kuuluva Finbiosoft Oy myydään
Springvest Oyj:n portfolioon kuuluvan yhtiön Finbiosoft Oy:n (”Finbiosoft”) osakkeenomistajat ja lääketieteen laboratorioiden ja diagnostisten yritysten tiedonhallintaratkaisujen toimittaja BYG4lab (”Ostaja”), ovat 12.3.2024 allekirjoittaneet sopimuksen Finbiosoftin koko osakekannan ostamisesta (”Yrityskauppa”) Growth Buyout -sijoituksia tekevän pääomarahaston Keensight Capitalin tuella.
Springvest on järjestänyt laboratorioiden laatuun erikoistuneelle ohjelmistoyritykselle Finbiosoftille oman pääoman ehtoiset rahoituskierrokset vuosina 2015 sekä 2018, joissa Finbiosoftille on kerätty rahoitusta yhteensä 3,09 miljoonaa euroa.
Yrityskauppa pyritään toteuttamaan vuoden 2024 toisen vuosineljänneksen aikana. Toteutettavalla kaupalla on noin 0,3 miljoonan euron positiivinen nettovaikutus Springvestin taloudelliseen asemaan. Springvestille suoritettava kauppahinta kirjataan Springvestin soveltaman käytännön mukaisesti suoraan Springvestin omaan pääomaan.
The exit is very small for Springvest and the valuation in absolute terms was close to the current value we roughly estimated for the company, so it has practically no impact on the sum of parts. In terms of exit activity, this is of course a good sign, although I am still waiting for IPO activity to pick up and along with it, the broader exit market to turn more clearly towards better momentum.
Based on the announcement, it is open to interpretation whether the approximately +300k net impact on the financial position refers to a cash flow of current book value + 300k or just 300k.
I was mulling over the same thing I got an answer from the company that it is the latter, meaning the net impact corresponds to the expected sales proceeds minus capital gains taxes; so, about 0.3 MEUR in net cash should flow into Springvest’s coffers from the transaction. This was the company’s first exit announcement on the stock exchange, so now the logic for interpreting these is clearer for the future
On the other hand, it seems we won’t get brilliant visibility into company-specific balance sheet values, which could in principle, according to the company’s view, even be zero.
Exactly. From the owners’ perspective, the most important thing is to know how much net cash the exit generates, so in that sense, this way of reporting is logical. The wording of the announcement just left room for interpretation this time.
How should the General Meeting’s decision on dividends and the distribution of unrestricted equity be interpreted? The authorization is for ”up to”, so surely they aren’t going to start just handing out money?
This went unanswered — so the authorization for dividend distribution is a total of at most €0.15/share, which can be distributed in one or more installments. In practice, I would expect the entire sum to be distributed; the amount is approximately half of the net cash, and the company has practically no capital requirements. Last year, the dividend was distributed at the end of August.
Another round for Solar Foods within a short period (the previous 8 MEUR was done in the autumn) seems to be filling up rapidly; it’s already halfway through and the round has only been open for a couple of days.
Clearly, depending on the success of the company selection, there is sufficient demand even for these larger rounds. Of the last 10 completed rounds, 5 were subscribed to the maximum limit, while the others exceeded the minimum target but reached about 20-70% of the maximum.
It’s really interesting how a massive amount of money is channeled into poor products with a good story, whereas there isn’t enough money for good products with a poor story:
The food business is a poor sector for investors because all countries in the world subsidize its production to drive down prices and products are substitutes for one another, so consumers have a very limited willingness to pay high prices for mere raw materials.
there is a relatively long 6-month transition period until the end of July if needed, meaning there is plenty of time to recruit a replacement.
