Katalysen partners with professional asset valuation firm Leonh to ensure more precise portfolio valuations

Effective January 1, 2024, Katalysen Ventures ("Katalysen") has embraced an enhanced approach to portfolio valuations, aligning itself with esteemed peers such as Almi, Bonit Capital, byWit, and Navigare Ventures by collaborating with the professional third-party asset valuation firm, Leonh. All forthcoming portfolio valuations will adhere to this upgraded methodology, utilizing Leonh's expertise and databases to achieve a more precise estimation of the fair value of Katalysen’s portfolio assets. Preliminary estimates of the portfolio's total value using this updated valuation approach were concluded on the 23rd of January, and indicate significant differences in the valuation of individual holdings, but an insignificant difference in the portfolio's total value compared to last communicated (2023-12-06: 171.5 MSEK). Key changes to the valuation approach are outlined below.

Commencing January 1, 2024, the following adjustments are being instituted in Katalysen's portfolio valuation approach:

• Portfolio valuations are now executed in collaboration with the professional asset valuation firm, Leonh.
• Individual portfolio holdings are now assessed using multiple valuation models, generating multiple data points for each holding (typically 3-6), from which an average is derived. Previously, individual portfolio holdings were appraised using a single model per holding (typically the market price of a recent investment or transaction).
• The employed valuation models and data points now encompass Discounted Cash Flow (DCF) when reliable revenue traction is available, peer comparison using sector multiples, peer comparison using typical pricing in funding events, the market price of a recent investment, development since the investment was most recently priced by the market, and more.
• Sources for market data include the Swedish Companies Registration Office, Leonh databases of market transactions, and forecasts from individual ventures.
• It's important to note that scorecards are no longer utilized in valuing individual holdings.

Katalysen Ventures is committed to adopting current best practices in valuing early-stage private capital investments, aligning with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. Key valuation principles can be summarized as follows:

• The primary objective of the valuation is to ascertain the fair value of an investment, defined as the price that would be received in an orderly transaction between market participants at the measurement date, reflecting prevailing market conditions.
• The evaluation of the fair value of each investment is performed at each measurement date to ensure accurate and up-to-date valuation.
• Techniques employed for determining fair value consider the unique nature, facts, and circumstances surrounding the investment, incorporating reasonable current market data and inputs, along with market participant assumptions.
• It is crucial to recognize that the price of a recent investment is not automatically deemed fair value.
• Due to inherent uncertainties in estimating fair value for early-stage private capital investments, exercising judgment and making necessary estimates should be approached with care. 
• While caution is warranted, IPEV Guidelines advise against applying excessive caution and instead recommend considering information that is known or knowable as of the measurement date, ensuring a comprehensive and well-informed valuation process.

For further information on the IPEV Guidelines, please visit www.privateequityvaluation.com.