Zopa backer Augmentum Fintech will use an upcoming general meeting to ask shareholders to approve a change in its investment strategy, to allow it to offer funding to seed-stage companies in the fintech sector.
The investment company has also asked shareholders for permission to reduce its cash holdings and approve a new share issue worth at least £40m.
The new share issue was originally mooted on 7 June as a way to fund additional investments in its portfolio.
“We continue to seek out opportunities ahead of popular adoption of new technologies to the fintech mainstream, and this positions Augmentum competitively at a time when more global institutional investors than ever before are seeking to access European fintech,” said Tim Levene, chief executive of Augmentum Fintech.
“This has led to valuation inflation in parts of the sector, but we continue to remain price disciplined and theses driven, even if that means being contrarian at times.
“We believe that the trend to digital adoption will continue to gather pace and are excited at the varied pipeline of opportunities and relationships currently available to us.”
Following the release of the company’s financial report for the year ending 31 March 2021, Augmentum issued a circular proposing a shareholder meeting on 8 July 2021 at 11am in London.
The board will seek permission to change the company’s investment policy to allow Augmentum Fintech to invest up to one per cent of the company’s net asset value (NAV) in seed stage investments; and to reduce the amount of cash as a percentage of gross assets that the company expects to hold for the purpose of making follow-on investments and for working capital purposes.
In order to provide the company with greater flexibility to invest in the identified pipeline, shareholders will be asked to authorise the board to issue and allot up to 150 million new shares, representing approximately 107 per cent of the company’s issued share capital at the time of writing.
In the 12 months ending 31 March 2021, Augmentum increased its NAV per share by 12.3 per cent, while the portfolio’s overall net asset value increased by 35 per cent to £183.2m.
“I am pleased to present our third set of positive annual results since the launch of Augmentum Fintech in 2018,” said Neil England, chairman of Augmentum Fintech.
“In what has been a challenging year for many businesses, the company’s diverse portfolio of investments have performed well, producing an increase in NAV per share of 12.3 per cent. Fintech has been the beneficiary of a strong trend towards a digital economy, a trend which accelerated during the pandemic.
“The European economy appears set to rebound and the digital economy within that is expected to grow fast. Augmentum, as the acknowledged specialist in early stage fintech is well placed to take advantage of this, with a strong pipeline of interesting opportunities.”