What is your background briefly?
The earlier part of my career was in investment banking, covering equity capital markets and corporate broking at Teather & Greenwood (one of the larger AIM nominated advisers and brokers at the time), Daiwa Securities SMBC Europe and Sumitomo Bank. In particular, I worked with a large number of companies seeking to IPO on the AIM Market of the London Stock Exchange and raising capital from institutional investors.
Does it seem like a logical background to what you do now?
Yes. It took us nine months to get TMT registered and IPO-ready by December 2010 so my AIM expertise was directly relevant. Since then I have been acting as TMT’s Executive Director. A large part of my role is satisfying the regulatory requirements of an AIM-quoted company, dealing with various professional advisers and continuously interacting with institutional investors and other shareholders, so I am making good use of my previous professional experience.
1 min pitch for what you are doing now?
In addition to the general investing and portfolio management activities, I have overall responsibility for managing the group’s business and promoting, protecting and developing the investment business of TMT. I also regularly meet with current and prospective investors to keep them updated on the progress of our portfolio companies as well as with investee companies. I am a member of the investment committee and a member of the nomination committee.
Tell us more about TMT, what sort of projects do you invest in?
TMT is practically a unique AIM-quoted investment company providing investors with liquid exposure to a portfolio of earlier-stage, primarily US-based tech start-ups. Investing directly into a privately held start-up means that it is hard to sell your investment, as there is no public market in the shares. In contrast, TMT’s shares are freely tradable. That makes for a good way for investing in fast growing companies, with the added benefit of liquidity and portfolio diversification.
Our main focus is on Big Data, E-Commerce and SaaS (Software as a Service) companies. We know these sectors in-depth. That allows us to have an intelligence edge when it comes to selecting companies. Since joining AIM in December 2010, we have made over 40 investments and successfully exited (fully and partially) from 12 portfolio companies.
What sort of investors do you work with?
As a quoted company any investor can freely buy TMT shares through an online share dealing platform or through their broker. That is why TMT has practically the entire spectrum of investors: private shareholders who typically invest around £2,000 per person; private client brokers; family offices; and institutional investors investing for their funds.
In terms of other venture capital funds that co-invest with TMT, it’s good news to see that famous investors have followed in our footsteps. Over 20 global venture capital funds such as Bain Capital Ventures, Google Ventures and Andreesen Horowitz have invested over $400M into our portfolio companies following our first investment.
What sets you apart?
We are company builders ourselves, not just investors, so we know what it takes to build a company from scratch. German Kaplun and Alexander Morgulchik were the founders of RBC, the first Eastern European unicorn, which they grew to over 5,000 employees and a $1.5bn public market valuation. Igor Shoifot created several successful start-ups and chaired high-tech accelerators in the US, Europe and Asia. Other members of the team have been working in tech investment for over 10 years.
Tell us about some of your best investments, what criteria do you use to decide who to invest in?
Our key priorities are assessing the team of the investee company and whether the business model is capable of scaling up at a global level. We like to invest in straightforward business models that can be replicated globally. Some of our best investments fit these criteria, and have been software businesses such as sales management service Pipedrive which serves over 75,000 companies worldwide (17x revaluation of our stake to date), work management platform Wrike which has its European HQ in Dublin (9x revaluation of our stake) and perfume subscription service Scentbird which has over 250,000 subscribers globally (4x revaluation of our stake).
In order to offset some of the risk of investing in early stage companies, we generally only invest in companies with at least $50,000 revenue per month. This means their business model has already been validated and we know that our money will not be used to just test product ideas.
Our best investment to date has been Taxify, the global ride-hailing service. We were one of the first investors in 2014 when Taxify was a one-year-old start up present in only four cities in Estonia and Latvia. Roll on four years later and in 2018 Taxify has over 500,000 drivers in 64 cities worldwide. Our stake has been revalued 53x since investment. In May this year Taxify raised $175m in a round led by Daimler making it the first unicorn in our investment portfolio with a $1bn valuation.
How can people find out more about you & your work?
We publish our annual and half year results, portfolio updates and other company information on the London Stock Exchange and TMT websites. Investors can also contact [email protected] for more information.
Anything else you’d like to add / we should have asked?
TMT is an ideal way for ordinary, private investors to invest in a diversified portfolio of over 35 companies from as little as $2.28 per share (the current TMT share price).
For many retail investors, accessing high quality start-ups is nearly impossible because early-stage investment is typically offered only to friends and family and recognised venture capital funds. TMT is one of those early-stage investors, in turn offering itself as a collective channel for end investors who are unable to access such opportunities. Picking multi-bagger start-ups is hard work, which is why many investors prefer to invest via specialist companies such as ourselves.
TMT is a bit of a hidden jewel but is getting onto more radar screens now, including its first batch of UK institutional investors in March this year when TMT raised $3.5m in a secondary round.