Fram Skandinavien AB (publ) publishes interim report Q2 2023
Significant events during the quarter
Fram Skandinavien's strategic focus on driving profitability and cultivating a robust venture pipeline
As of the 31st of July 2023, the estimated total net asset value for Fram B shareholders amounted to 303 mSEK, which corresponds to approximately 84 SEK per share. The closing price for the B share was SEK 30 per share.
The NAV per share was approximately +180% above the closing price of the Fram B share on the same day and represented an increase of +13% compared to 30th of April 2023. The closing price per share resulted in a discount of approximately -64% compared to the NAV per share.
In the past quarter, Fram has prioritized enhancing the profitability of its portfolio companies, improving capital efficiency, and supporting the fundraising processes for the ventures. The investment team at Fram has also been actively evaluating and conducting thorough research on technology startups in Vietnam and the Southeast Asia ("SEA") region to establish a robust pipeline for future investment opportunities.
In June, Fram successfully received the full earn-out of 4.2 mSEK from the divestiture of its IT development business. Additionally, in early July, Fram made a profitable divestiture by selling its shares in Grab. The return on the invested amount was +23%, as the shares were sold at ca. 1.4m SEK.
During Q2 and July 2023, Fram provided additional fundings to Carmudi and EveHR, at 3.5 mSEK and 0.6 mSEK respectively.
The current portfolio of Fram consists of 7 holdings, including 4 private and 3 public tech companies, with a total invested amount of 52 mSEK. The total NAV of these companies reached 270 mSEK, rendering a latent return multiple of 5.2x on the invested capital.
Tech sectors lead the equity market rebound
Positive growth in the equity market in H1 2023: The equity market in H1 2023 has shown significant growth, particularly with the rebound of tech companies amidst ongoing challenges. Tech stocks, in form of Nasdaq 100, have performed exceptionally well, experiencing a rebound of approximately 37%. This growth has been driven by investors' increasing focus on artificial intelligence (AI) and its real-world applications, as well as advancements in long-hyped technologies.
Monetary policy to support the economy: The SEA region has experienced slower-than-expected inflation, allowing central banks to refrain from tightening policies and instead focus on bolstering domestic consumption by accommodating monetary policies. For instance, the Vietnam central bank has cut interest rates by 50 basis points in the face of weak global demand and slower credit growth.
Increase in IPO activity in Southeast Asia: IPO activity in Southeast Asia has slightly increased by approximately +16% YoY in terms of deal value. Although the startup funding environment in the region has slowed down, IPO activity has shone with 85 deals and proceeds amounting to 3.3 bnUSD.
Vietnam ranks second in startup funding: The region as a whole secured 403 deals with a total of 4.2 bnUSD in proceeds, experiencing a decline of -56% YoY. Singapore remains the most active market, but Vietnam has outranked Indonesia in deal value in Q2 2023, demonstrating a deal volume resurgence.
Potential sectors in a post-pandemic world: The sectors of AI, energy transition, health tech, and deep tech are expected to have significant potential in a post-pandemic world. The regional tech news site, Tech in Asia, states that spending on AI has increased by +76% YoY.
