At Molten’s 2023 Investor Day, we brought together some of the best and brightest of our portfolio to showcase their growth journeys. In his introductory remarks, our CEO Martin Davis gave an update on Molten’s performance, the state of play in the market and a reminder of how Molten invests.

Since the last Investor Day…

Martin began by talking about Molten’s recent history and proven track record of realisations -  realising over £450m between March 2017 and March 2022. Despite contractions, European VC continues to show signs of resilience and performance over the long term with private venture, and particularly European private venture consistently outperforming other private asset classes over the last 15 years.

2023 and beyond

It’s worth reflecting on the market performance of 2023 so far, and what this may mean for the rest of the year.

One encouraging trend that we have observed has been the resilience of consumers. Despite the cost-of-living crisis and global recessionary concerns, individuals and businesses have continued to spend money, supporting businesses across a range of sectors. At the same time, enterprises have been careful to preserve capital, and manage costs to extend runway. Although capital is now more expensive than at any point during the last decade, people appear to be accepting this ‘new normal’.

Of course, there are also macro factors at play, including the evolving attitudes towards inflation and interest rates. Some commentators now believe that interest rates will peak slightly earlier and quicker than previously expected, which would be good news for the market as it could mean that the expected cost of capital becomes more manageable, helping to boost confidence in valuations.

However, there are still concerns around the market, particularly in the wake of the excesses of recent years and high-profile down rounds from companies like Klarna and which have damaged market confidence— and there is an enhanced sense of caution among investors as they reconsider the potential risks and timing of investment opportunities in the current climate.

Despite these challenges, Molten's portfolio has remained relatively stable, and Martin is optimistic about the current environment. History suggests that downturns create sustainable winners, presenting an opportunity for entrepreneurs to scale their businesses and for talented individuals to recycle their skills and expertise. 

Ultimately, Molten's value proposition is rooted in its ability to connect intelligent and inspirational founders with supportive long-term capital. By leveraging expertise, resources, and network, Molten should be well-positioned to help its portfolio companies navigate the challenges of the current market and emerge stronger than before.

What does a Molten portfolio company look like?

Finally, Martin provided a window into what characteristics are shared by Molten’s portfolio companies. A partial summary of his address can be found below:

The companies we invest in are run by visionaries who are looking to disrupt. Disruption doesn't pay attention to economic cycles, and innovation doesn't either. They're trying to solve big problems, and technological innovation doesn't respect a downturn. The advances that our entrepreneurs are working on are by nature long term.

For example, Schüttflix is tackling 100-year-old supply chains in the construction industry, and Gardin is helping to grow plants in parts of the world where they previously could not have been produced. Manna is delivering new and innovative ways of dealing with the explosion in consumer l for delivery, while ICEYE and SatelliteVu are using space imagery to measure the carbon footprint of every building on the planet and to provide imagery to help deal with natural disasters.

Technological advances in recent years have made this possible, and our portfolio companies are stretching the limits of technology to apply them to real world problems.

MostlyAI is dealing specifically with more sophisticated algorithms that touch everybody in most parts of the world almost every day. CoachHub is an innovative way to help develop and manage workforces, which have become more challenging to manage since COVID. Cybersecurity and data integrity are increasingly big issues, and Ledger is at the forefront of security layers.

Finally, digital health is playing an increasingly important role in society, and we have invested in Aktiia, a company that enables physicians to monitor heart rates and blood pressure with much better data. Technological advances are continuing to grow, and our companies need to be able to commercialise them and bring them to a wider audience. 

Our companies will all be disruptive, whether it's a value chain, a supply chain, or dealing with something new. They are also scalable. It's critical that we love good ideas and great founders, and we want them to be big. International markets and an economic model that scales with the growth of the business are essential, with unit costs being very important. Delivering on this model should improve the margin in a capital-light environment, and ambition to scale is key.

We spend a lot of time looking at talent, knowing that the best teams are essential. Entrepreneurs with a track record of building great teams or those who are open to help in building them is what we look for. Improving diversity, inclusion, and transparency are areas we help our founders with, so they can attract and retain the best talent.

We believe that our portfolio companies represent some of the very best businesses to grow, where we can add the most value and create the most value. The opportunity is definitely there—it’s our job to make it happen.