Draper Esprit – A Publicly Traded European VC Firm

You’ll often hear wantrepreneurs complain about how their genius is being held back by venture capitalists (VCs) who don’t throw money at them because of <INSERT PERCEIVED INJUSTICE HERE>. The truth is that venture capital investing is exceptionally risky. Harvard Business School senior lecturer Shikhar Ghosh’s research showed that 75% of startups never return cash to investors. If three out of four stocks you invest in might be worthless as soon as you click the buy button, you’d probably tread lightly too.

A family office recently asked us how to invest in startups. Not buying shares of startups on the secondary market, but actually being able to participate in funding rounds. Unless you’re someone whose name is recognizable in the startup world, that’s not going to happen. The next best alternative would be to invest alongside a venture capital firm. An HBR article on How Venture Capital Works talks about how venture capital firms typically work with large institutional investors only:

Investors in venture capital funds are typically very large institutions such as pension funds, financial firms, insurance companies, and university endowments—all of which put a small percentage of their total funds into high-risk investments. They expect a return of between 25% and 35% per year over the lifetime of the investment. 

These institutional investors aren’t investing in startups, they’re investing in firms and partners who are capable of selecting more winners than losers. The ability for a VC fund to weed out losers ensures the high returns investors seek. When a VC shows a track record of investing smartly, they don’t need to spend much time soliciting money from investors.

Credit: HBR

Now, think about how the above graph might change if a venture capital firm became a publicly traded company. Suddenly, you’re having to cater to regulators, shareholders, and all the other responsibilities that come with being a listed company.

Publicly Traded Venture Capital Firms

If you’re an accredited investor, check out Alumni Ventures Group (AVG), a firm that lets you invest in deals alongside some of the best venture capital firms out there. If you’re not accredited, you might think about investing in one or more publicly traded firms out there that provide exposure to startups.

In our previous piece on Investing in Publicly Traded Venture Capital Firms, we talked about firms like 180 Degree Capital and Trendlines Group which trade at a discount to their actual asset values. In other words, the combined value of all assets they hold is more than what the company is valued at. That’s because of the aforementioned startup failure rate. One exception to that rule is a publicly traded venture capital firm called Draper Esprit (GROW:LN).

About Draper Esprit Stock

Click for company website

The name Draper may ring a bell because of notable venture capital firm Draper Fisher Jurvetson (DFJ). Founded in 2006, U.K. venture capital firm Esprit renamed themselves to Draper Esprit in 2015 when they joined the Draper Venture Network and began working with Tim Draper of DFJ. The following year, they had an initial public offering (IPO) on the London Stock Exchange’s AIM market where they trade today with a market capitalization of just over $1.1 billion. (Given our readers hail from ‘Murica, all numbers that follow will be in greenbacks.)

Draper Esprit’s strategy is to make about 20 investments a year in high growth European technology startups with global potential. About 70% of their capital is for growth-stage rounds (Series B+). In order to scout potential winners, Draper Esprit makes around 200 seed investments a year through their partner fund-of-funds program where they’ve placed money with more than 20 of Europe’s most promising seed funds. Their current focus is on the four categories seen below (listed alongside current investment weightings):

Credit: Draper Esprit Annual Report 2020

Let’s talk about what a share in Draper Esprit actually gets you based on the below graph from The Draper Esprit Annual Report 2020 for year ended 31st March 2020.

Credit: Draper Esprit Annual Report 2020

Nearly 70% of their portfolio is around 16 core holdings. Some of these are names we’ve covered before.

  • Graphcore – developing an artificial intelligence chip it calls an intelligence processing unit (IPU) that it claims is a better approximation of the human brain.
    $18 million invested, current valuation $114 million
  • Revolut – a digital banking app and card with 12 million customers across 35 countries.
    $9.7 million invested, current valuation $28.5 million
  • UiPath – a leader in robotic process automation (RPA) that’s now taking us to the next phase of RPA – hyperautomation.
    $14.5 million invested, current valuation $36.8 million
  • Iceye – deploys satellites that use space radar to take images of the earth from space, even through clouds.
    $9.9 million invested, current valuation $18.3 million
  • RavenPack – sells alternative datasets that are a must-have in the systematic trading space.
    $9.9 million invested, current valuation $40.6 million

If you’re an investor in Draper Esprit, it’s easy to see the value of your investment change over time as they exit investments to realize a profit or loss and make new investments which hopefully increase in value over time. On page four of their annual report, you’ll find net asset value (NAV) per share listed at 555 pence. (Shares in the U.K. are quoted differently than in the United States.) As of last close, Draper Esprit’s shares are trading at 625 pence. This means shares are actually trading at a premium to the NAV.

To Buy or Not to Buy

Compared to the other publicly traded VC firms we’ve looked at, Draper Esprit provides some concentrated exposure to growth-stage startups from a diversified number of industries. By investing in later stages, they minimize the risk of any startup blowing up and paying investors nothing. Contrast this to a firm like Scottish Mortgage Investment Trust which invests in a lot more exciting firms – think Ginkgo Bioworks, Tempus, and Grail – but their portfolio also contains lots of publicly traded names.

Perhaps the best part about holding Draper Esprit is how they break down each investment they’re holding and show you how valuations change over time. As we continue to progress down the pandemic path, alternative assets such as venture capital become more appealing because they’re less correlated to traditional asset classes such as stocks and bonds. For non-U.K. investors, you’re also getting some currency diversification because you’ll have to buy shares using British pounds.

The report goes on to talk about how the pandemic is changing the way venture capitalists invest. They’re now becoming more selective, and there’s a greater emphasis on follow-on investments. We’ll see greater competition for quality deals with a focus on revenue-generating business in sectors such as fintech and software-as-aservice (SaaS).


If you’re not an accredited investor, there aren’t many ways to get exposure to a portfolio of leading technology startups. Draper Esprit is one of a few options that give you exposure to a concentrated list of growth startups. Given their affiliation with DFJ, they have access to future deal flow as they continue to have exits and cycle their capital. With no pressure from outside investors, they can patiently wait for the opportune times to exit their positions.

There’s another lesser-known publicly traded European venture capital firm operating in the clean meat space. Find out who that is in The Nanalyze Disruptive Tech Portfolio Report, available now for Nanalyze Premium annual subscribers.

20 thoughts on “Draper Esprit – A Publicly Traded European VC Firm
  1. Very interesting article. I like the fact Draper Espirit has in the portfolio such companies like UIPath, Graphcore, Revolut, etc.
    I think I will open a small position today for the start and keep accumulating it later ..

    1. Hi Stan,

      Shares of Draper Espirit trade on AIM and we’ve found sometimes foreign exchanges have funky rules. For example, back when we were dabbling in Softbank you could only purchase shares on the Japanese exchange in round lots of 100. This creates a problem when you’re trying to buy small amounts over time (dollar cost averaging or DCA). We also need to consider added fees for trading on foreign exchanges. To summarize, DCA becomes tough when purchasing shares on foreign exchanges.

      We like both Scottish Mortgage and Draper Espirit as publicly traded companies with pure-play exposure to startups, the later being much more concentrated – which isn’t necessarily a bad thing.

  2. “…we talked about firms like 180 Degree Capital and Trendlines Group which trade at a discount to their actual asset values. In other words, the combined value of all assets they hold is less than what the company is valued at. ”
    I believe you meant to type “more than”.

  3. Right now Draper Espirit looks like a good value to me. The current price is not that far from what was a year ago. That compares favourably to other stocks having huge valuation increase. Likely that is related to the fact UK stocks still have low valuation due to Brexit.

    1. Good point here on U.K. stocks. Some investment banks have been pointing that out recently – how undervalued U.K stocks are compared to other equity markets.

  4. I think now is a great time to buy Draper Espirit (GROW.L) as UIPath is about to be listed in US.
    I am certain UIPath stock will be very hot, so by buying GROW.L we will get early entry into UIPath at a low price.
    When UIPath appreciates that will drive up GROW.L. It is a no brainer investment.

    1. There is no such thing as a no-brainer investment. Sure, Draper has positions in some promising names, but there are so many factors to consider when it comes to how Draper will act as a proxy for those returns. If we go into a recession tomorrow, it’s a moot point as well. Always proceed with caution. While we like Draper too, we haven’t pulled the trigger on a position because we’re wary at the moment of the over-hyped markets.

  5. Trustpilot has confirmed final pricing for its IPO on the London Stock Exchange with its shares valued at 265p each, implying a market capitalisation at listing of £1.08bn. Trustpilot is Draper Esprit’s largest core portfolio holding, valued at £80.9m on Draper Esprit’s balance sheet at 30 September 2020. At the IPO price, Draper Esprit’s holding in Trustpilot is valued at £163.8m, an uplift of £82.9m or 102%, almost 60p per Draper Esprit share (before carry and other costs). Draper Esprit is selling shares worth £78.3m and will continue to hold a 7.9% stake in Trustpilot (subject to exercise of the overallotment option) worth £85.5m at the listing price. Draper Esprit’s remaining holding will be subject to a 180-day lock-up. Together with UiPath’s funding round (February 2021), Draper Esprit has now reported more than £175m in gross portfolio value uplift in H221.

    1. A 60 pence per share uplift is about 7% upwards on today’s price. Unless we’re reading this wrong, that’s not very much

  6. Right now I have 30% gain since November. I kept saying from November Draper Espirit is a good buy and it turned out to be true. But there is still much more to come: UIPath listing is still ahead and that will be another significant gain.
    Graphcore IPO should also provide a nice gain.
    So overall Draper Espirit can still have large gains ahead.

    1. A 30% gain and $3 won’t get you a cup of coffee at Starbucks. Remember, it’s all about realized gains 🙂

      That said, we like Draper, just not at current prices and in today’s climate. Everyone will have their own taste when it comes to what they hold, when they decide to hold it, and – most importantly – when they decide to exit a position.

  7. Revolut Said to Eye Fundraising at Over $20 Billion Valuation
    The new money would increase London-based Revolut’s valuation several times over a fundraising round in 2020, when the digital banking services company raised $500 million, giving it a value of $5.5 billion. The new valuation would make Revolut the U.K.’s most valuable startup, surpassing Checkout.com’s $15 billion mark.

    BTW: Revolut is part of Draper Espirit portfolio, so we can see soon Draper Espirit share price appreciate as a result.

    1. Firms like Draper Espirit have a lot of moving parts so nothing is ever guaranteed until there’s an exit and profits are taken. That said, it’s favorable news for investors in Draper Espirit.

  8. The Company (LSE: GROW, Euronext Dublin: GRW), a leading venture capital firm investing in and developing high growth digital technology businesses, announces that it has changed its name from Draper Esprit plc to Molten Ventures plc.

  9. Molten Ventures (formerly called: Draper Esprit) US ticker GRWXF was +58% yesterday: $4.95.
    I just checked the main ticker (UK) GROW.L and since Thursday it was up +27% : 467p.
    Now the question is: what is causing these gains ? THe latest news I see is from Nov 2nd: “Half year trading update and notice of results”. Highlights for the period:
    – Gross Portfolio Value (unaudited) is expected to be not less than £1,450 million (30 September 2021: £1,350 million; 31 March 2022: £1,532 million)
    – Underlying Gross Portfolio decrease in fair value (unaudited) of approximately 17% at constant currency. Net decline of 12% due to offsetting currency tailwinds of approximately 5%
    – Valuations calibrated to reflect public market peers leading to a reduction in Enterprise Value (“EV”) in the Core portfolio on average of 35%, leading to fair value reductions (before currency movements) of 17%, with preference share protection limiting the downside
    – Portfolio well-funded with more than 75% of the Core with over 18 months of cash runway and revenues continue to grow at an average for the Core of over 60% with forecast growth of 70% for 2023
    – NAV per share is expected to be not less than 830p (30 September 2021: 887p; 31 March 2022: 937p).

    1. Perhaps the NAV discount is being eroded as investors have more faith in the future prospects of the fund. Lots of moving parts in there make it difficult to figure out where the gains are coming from.

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