MIDAS SHARE TIPS UPDATE: Our tip Augmentum Fintech rises 40% in three years - what next for investors?

By JOANNE HART, FINANCIAL MAIL ON SUNDAY

Updated:

When Augmentum Fintech listed on the stock market in March 2018, chief executive and founder Tim Levene found it hard to persuade big City institutions to back the business. 

The idea, Levene explained back then, was to build a company that invested in fast-growing financial technology firms and reap the rewards as these acorns developed into oaks. The flotation eventually got away, raising £90million – less than Levene had hoped for – at £1 a share. 

Midas recommended the stock from the start and investors who subscribed to the flotation are glad that they did. The shares have risen to £1.40 and the business has grown rapidly.

New wave: Augmentum, led by Tim Levene, invests in fintech firms such as Tide

New wave: Augmentum, led by Tim Levene, invests in fintech firms such as Tide

In 2018, there were just five businesses in Augmentum's portfolio – including online share service Interactive Investor, precious metals specialist Bullion Vault and Seedrs, the crowdfunding group. 

Today, Augmentum has investments in 22 businesses, from digital wills and funeral firm Farewill to SME challenger bank Tide to alternative mortgage provider Habito. 

Augmentum's businesses are making strong progress. Annual results to March 31 this year showed that the portfolio is now valued at more than £180million, up from £136million in 2020. Looking ahead, Levene expects to make at least one exit every year, selling individual investments and either reinvesting the cash or returning some to shareholders. 

At the same time, the group is on the lookout for new deals and has amassed a rich potential pipeline collectively valued at about £200million. 

Most of these transactions will fall by the wayside but Levene believes the time is right to pick up some attractive businesses and he is looking to shareholders to help finance his plans. 

Augmentum launched a fundraising on June 17, offering new and existing investors shares at £1.35½, a discount to the current price. 

The offer is open until July 8 and the firm hopes to raise at least £40million to buy new businesses. 

Levene, a 2.5 per cent shareholder, intends to participate in the deal.

Midas verdict: Financial technology is a specialist field, but it is growing fast and the pace of change is likely only to increase over the coming years. 

Augmentum Fintech allows individual investors to access the sector, and the broad sweep of businesses in its portfolio means that the group is not reliant on any one type of firm or technology. 

Existing shareholders have seen a 40 per cent rise in their shares. At £1.40, they should stick with the business. For new investors, the current fund raising provides a good opportunity to acquire stock at a discount.

Traded on: Main market Ticker: AUGM Contact: augmentum.vc or 020 3961 5420 

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