Fintech offers opportunities despite macro headwinds, says Augmentum
Augmentum Fintech continues to believe that there are structural opportunities for the fintech sector, despite macro-economic headwinds.
The only fintech-focused investment fund listed on the London Stock Exchange noted that the sector’s revenue penetration has not even reached 10 per cent of the financial services industry, meaning there is still significant headroom for continued disruption.
Augmentum Fintech returned 9.1 per cent on a net asset value basis over one year, compared with the technology and media sector’s return of -29 per cent, according to the Association of Investment Companies.
Read more: Augmentum Fintech posts £1m loss amid “significant market volatility”
The group now has 24 portfolio companies, including the likes of neobank Monese, alternative lender Iwoca and peer-to-peer lender-turned-digital bank Zopa.
In a ‘Year in Review’ round-up, the firm said that it had made six investments in 2022. It said that the average revenue growth rate for its top five holdings has been 129 per cent in the first nine months of 2022.
Over the year, Augmentum exited its holding in Interactive Investor, receiving £42.8m in proceeds at an 11 times multiple on invested capital.
As of 30 September, Augmentum’s net asset value was £292.1m, and it had £137m of opportunities under active development in the pipeline. The group said it had an annualised internal rate of return of 19.3 per cent.
Although the group sees significant opportunity in the fintech sector, it remains highly selective, investing in just 0.1 per cent of deals it assesses.
Read more: Augmentum Fintech awaiting ‘price correction’ to boost portfolio
