ASX-listed VC Bailador Technologies results reveal a mixed bag for investors

While the failure of online retailer Brosa was a $4.5 million hit to the bottom line of ASX-listed venture capital firm Bailador Technologies Investments (ASX: BTI), the sale of healthtech startup InstantScripts was a massive win for investors in a difficult 12 months revealed in the company’s annual results today.

Ironically, it was another ASX-listed business, SiteMinder, and the slide in its share price in the first half of 2023 that had the biggest impact on the FY23 numbers, with Bailador posting a net profit after tax of $5.4 million (FY22 $34m).

The final dividend of 3.2 cents per share, fully franked, delivers an annual 5.3% yield (7.3% inc. franking credits). Over the past three years, Bailador has paid a total $0.155 per share in fully franked dividends.

Bailador cofounder and managing partner David Kirk, who knows a bit about winning World Cups as a former All Blacks captain, said the year delivered a solid rise in the value of BTI’s private company investments alongside a decline for its public ones, falling 19%, led by a 17% decline in SiteMinder’s value.

The upside is SiteMinder’s share price subsequently increased 44% last month.

“We are pleased to have achieved a solid result for shareholders in FY23,” Kirk said.

“Our private company investments performed very well delivering an IRR of 36.3% with all valuations backed by independent third-party transactions. Overall portfolio performance was muted by the decline in value of listed company investments, but we expect to see strong performance from them in FY24.”

The VC now has stakes in eight companies, including Nosto, Mosh and Rezdy. It saw a combined uplift of 28% in valuations for its private investments.

After keeping its powder dry for 12 months as the startup sector valuations, which Kirk considered too hot, began to tumble, Baildor invested $32 million, including $9.8m in the volunteer management software startup Rosterfy.

The big win was the sale of InstantScripts, just 10 months after Bailador tipped in a $5 million follow on investment. In June Wesfarmers put $135 million on the table for the 5-year-old healthtech venture, with the deal going through last month.

Bailador scored a 62% IRR (internal rate of return) with $52m in cash proceeds from InstantScripts

While the net tangible asset (NTA) per share (post-tax) was down $0.07 over prior year to $1.52, it was up $0.04 after adding back dividends paid during the period.

Kirk’s cofounder Paul Wilson, said they’re ready to make new and follow-on investments in FY24, with a $104m war chest at the end of July.

“Bailador is very happy to be positioned with substantial cash to invest, now that valuations for emerging technology companies have largely returned to more realistic levels based on historical data,” he said.