Vela Technologies - Initiation of Coverage
Listed venture capital style investor trading at a modest discount to NAV, offering exposure to disruptive technology growth companies
Vela Technologies is an investing company focused on early stage and pre-IPO long-term disruptive technology investments. There are currently 12 investments in the portfolio which either have developed ways of utilising technology or developing technology with a view to disrupting the businesses or sector in which they operate.
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Remit to invest in disruptive technology companies
Vela’s investment policy gives it a wide remit to invest in disruptive technology businesses, while at the same time following some more focussed principles. Vela is looking for companies to have four key components: a strong management team; an innovative scalable product proposal; revenue enhancing or cost saving capabilities; and high growth potential.
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Portfolio of twelve disruptive enterprises
Vela has built an investment portfolio which currently contains holdings in 12 disruptive technology companies operating across a range of sectors. Major holdings include stakes in travel technology business Portr (trading as AirPortr), social payments (VibePay) and ticketing (VibeTickets) platforms provider Vibe Group and social e-commerce platform developer WeShop.
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Undervalued listed companies provide further opportunities
More recently, Vela has expanded its focus towards potential investments in listed companies, seeking to take advantage of unloved and undervalued businesses which it believes have the potential to deliver growth or are priced at a significant discount to net assets. Current listed holdings include crypto miner Argo Blockchain, big-data analytics firm Rosslyn Analytics and blockchain technology platform provider Interbit.
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Shares trading at a modest discount to NAV while offering significant upside opportunities across the portfolio
We calculate a current investment portfolio value of £2.057 million, with net assets of £1.72 million. Vela’s market cap of £1.46 million is therefore a 15% discount to our estimated sum-of-the-parts. While this discount is in line, if not slightly higher than, discounts seen amongst similar listed venture capital/small cap style investment entities, we see significant upside potential for investors given a number of material valuation upside opportunities across Vela’s portfolio. Speculative Buy.
Vela Technologies plc is a United Kingdom-based investment company. The Company is engaged in acquiring and consolidating holdings in small and medium sized enterprises (SMEs), which are active in the development of technologies or engineering solutions. It operates through the holdings and supports of investments segment. The Company seeks investment opportunities, which can be developed through the investment of capital or where, part of or all of the consideration could be satisfied by the issue of new ordinary shares or other securities in the Company. It focuses on investments in companies, which are based in the United Kingdom or Europe.
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
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