Fram Skandinavien AB (publ) publishes year-end report, Oct-Dec 2023
Significant events during the quarter
Fram focuses on cost efficiency & profitability improvements
As of 31st of January 2024, the net asset value amounted to 232 mSEK (64 SEK per share), which was approximately +107% above the closing price of the Fram B share on the same day and represented a decrease of -6% compared to 31st of December 2023. The drop in NAV was primarily driven by more conservative NAV methodologies being applied to EveHR and DragonLend, as the annual valuation review deemed the previous investment round valuations to be too old to be prudently relevant.
During Q4 2023 and January 2024, Fram has actively implemented cost efficiency measures both in the ventures and on the group level to reduce the monthly burn rate in order to extend the overall runway as well as speed up the ventures’ path to profitability.
The negotiation for the sale of DragonLend to Gologiq is still ongoing, but pending the merger between RCRT and Gologiq, which has been slowed down by US regulatory and stock exchange approvals. Fram notes that the transaction progress has been unusually slow and no SPA is yet signed.
The current portfolio of Fram consists of 5 holdings, including 4 private and 1 public tech company, with a total invested amount of 52 mSEK. As of 31 January, the total NAV of these companies reached 211 mSEK, rendering a latent return multiple of 4.1x on the invested capital.
Global and SEA economic highlights: signs of recovery
Venture capital investment globally declined to a five-year low in Q4 2023, despite the overall bullish sentiment in the equity markets, with a 24% quarter-on-quarter decreased to 58 bnUSD, indicating a cautious approach in deal-making activities. However, the AI sector continued to shine brightly, attracting significant investments, including substantial funding rounds for US-based Anthropic and Metropolis, highlighting the growing investor interest.
In Southeast Asia (SEA), despite a slight downward adjustment in GDP growth forecasts due to weakened global demand, the region saw robust year-end startup fundraising, particularly in the e-commerce and fintech sectors. Additionally, the venture-backed IPO market saw notable activity with significant public offerings from J&T Express in Indonesia and WeBuy in Singapore, albeit with mixed results in terms of valuations compared to previous benchmarks.
Vietnam's economy, in particular, showed positive signs of recovery, with an upgraded real GDP growth forecast to 5.3%, underpinned by improvements in trade, industrial production, and consumption. The country, however, experienced a slowdown in venture capital funding in Q4, contrasting sharply with the robust activity in the previous quarter.
