Draper Esprit publishes first results since its float

Venture capital firm Draper Esprit, which has backed businesses such as snackbox deliverer Graze and online medical service provider PushDoctor, has released its first set of results since listing last year.

The firm, which wanted to make venture capital more available to the average retail investor, ended its financial year having generated £42m from realising certain investments – £37.1m of which has already been ploughed back into its portfolio.

Its gross primary portfolio value has increased by 43 per cent since it floated, after Draper Esprit invested in 13 new and six existing companies.

"At the time of the IPO in June 2016, we set out to demonstrate our model in a public market setting of investing in high growth private technology start-ups,” said the firm's chief executive Simon Cook.

“Through our fast-growing portfolio and a series of successful exits and further investments, we have demonstrated that the public venture capital model is working.”

Over the year, the firm raised £100m in just six weeks for its investment fund from Invesco, Woodford Investment Management, Hargreave Hale, Baillie Gifford and the Ireland Strategic Investment Fund, and has gathered another £60m for its other vehicles.

These include its Enterprise Investment Scheme and secondary funds, which acquire existing venture capital portfolios and stakes in companies.

Draper Esprit said it listed for two reasons, namely to reduce the need for it to sell out of companies within five years and to democratise access to the asset class.

Venture capital funds must usually invest within five years and then produce returns within another five years by selling their stake, so they can give capital back to investors.

But Draper Esprit believed its money could be put to better use if it could be involved in a company for longer.

Added to that, to invest in a venture capital fund a person generally needs to commit a significant amount of money.

With the rise of technology companies which employ fewer staff, so theoretically have more wealth to share out among investors, Draper Esprit believed this was causing the rich to get richer.

"We need a new way of distributing the wealth that private investors enjoy," the firm said in a statement, and it believes its public model offers the best opportunity.

Draper Esprit has not yet announced dividends, but may when the directors "feel it is appropriate".

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