TMT Investments exits Wrike investment, writes down Wanelo holding

Venture capital company TMT Investments has agreed to dispose of its entire holding in Wrike for a net aggregate cash consideration of $22.9m, it announced on Wednesday.

The AIM-traded firm said the disposal would result in a “substantial increase” in its cash resources and its net asset value.

Its board said it believed that the disposal demonstrated the company's ability to identify and invest in early-stage high-growth companies within the technology sector, that had the ability to create “significant” shareholder value through capital appreciation.

The disposal represented a “substantial uplift” in the valuation of TMT's investment in Wrike of about $14.5m and would - on receipt of funds - result in a “material increase” in the company's available cash to more than $25m.

TMT Investments said it would continue to seek to identify and invest in opportunities within the technology sector, adding that it would keep shareholders updated of developments in that regard “as appropriate”.

The company said it had also taken the “prudent decision” to impair its investment in Wanelo by around $3.5m.

Despite the impairment of Wanelo, TMT said the disposal would result in a “significant increase” in the company's net asset value of approximately $11m, equivalent to approximately 37.5 cents per share before adjustments for the company's ongoing operating expenses, bonus accruals, insignificant revaluations, potential future impairments, and similar items.

That represented a material uplift in the firm’s net asset value of approximately 13.7% from the previously-stated figure of $2.75 per share as at 30 June last year.

“Following Vista's partnership with Wrike, we are delighted to have achieved our largest cash exit to date,” said TMT executive director Alexander Selegenev.

“Wrike has always been one of our largest portfolio stars, and we are very pleased at having identified such a talented and professional team, led by CEO and founder Andrew Filev, as Wrike's very first institutional investor back in 2012.

“TMT originally invested $1m in Wrike, and the current exit proceeds are additional to the $0.8m TMT received from its partial exits from Wrike in 2017.”

Selegenev said TMT;’s board believed that a total return of over 23 times on its original investment demonstrated the company’s ability to achieve significant capital growth for its shareholders by identifying and investing in early stage high-growth tech companies, which shareholders would be unable to access otherwise.

“Our focus as investors is on identifying companies that are capable of scaling up globally.

“Founded in 2006, Wrike is today used by over 17,000 organisations, with one million users in 130 countries.”

He added that TMT was continuing to exercise a “diligent” impairment policy, with the company's management using its discretion to impair individual portfolio companies based on their perceived prospects, even in the absence of formal transactions.

“Accordingly, we have taken the decision to impair the carrying value of Wanelo to more accurately reflect Wanelo's likely current valuation.

“Having originally invested only $0.35m in Wanelo in 2011, the new impaired value of $1.8m still represents significant potential upside for TMT.”