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Last close As at 07/06/2023
-22.00
▲ −1.00 (−4.35%)
Market capitalisation
118m
Research: Financials
Deposit Solutions, FinLab’s largest fintech holding (which until recently made up nearly 30% of its NAV), has completed a new funding round with Deutsche Bank, which acquired a c 4.9% stake in the business. Although the deal volume is relatively small (and may be partially non-cash), we note that the transaction values Deposit Solutions at more than €1.0bn, which means it has now reached ‘unicorn’ status (ie a privately held company valued in excess of US$1.0bn) and has become one of the most highly valued fintech companies in Germany. We estimate that this translated into a significant write-up of FinLab’s c 7% stake of over €40m (c €7.6/share).
FinLab |
Deposit Solutions becoming a fintech unicorn
Financials |
Scale research report - Flash
19 September 2019 |
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Business description
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Deposit Solutions, FinLab’s largest fintech holding (which until recently made up nearly 30% of its NAV), has completed a new funding round with Deutsche Bank, which acquired a c 4.9% stake in the business. Although the deal volume is relatively small (and may be partially non-cash), we note that the transaction values Deposit Solutions at more than €1.0bn, which means it has now reached ‘unicorn’ status (ie a privately held company valued in excess of US$1.0bn) and has become one of the most highly valued fintech companies in Germany. We estimate that this translated into a significant write-up of FinLab’s c 7% stake of over €40m (c €7.6/share).
Continuing on strong value growth path
The transaction illustrates Deutsche Bank’s belief in Deposit Solutions’ business prospects. In this context, it is important to note that Deutsche Bank is one of Deposit Solutions’ key clients (offering third-party products to its own customers), which suggests that the bank has good insight into the platform. Having said that, we understand that Deutsche Bank considers this a purely financial investment and not a strategic move. Deposit Solutions will thus remain an open platform without any bias towards a particular bank.
Deutsche Bank’s investment constitutes additional funding and none of the existing investors has sold its stake as part of the transaction. Although further details have not been revealed, we understand that part of the consideration paid by Deutsche Bank may be in the form of services in kind. The deal follows a previous funding round closed in August 2018, which valued the business at US$500m. At the time, FinLab retained a 7.6% stake valued at around €33.5m which, following the Deutsche Bank transaction, is now worth more than €70m.
Write-up triggers a c 40% increase in FinLab’s NAV
FinLab’s NAV at end-June 2019 stood at €20.21. Based on yesterday’s closing price of €17.30, this implied a c 14% discount to its NAV. After accounting for the revaluation of its stake in Deposit Solutions (representing at least €7.6 per share) and marking to market the value of the company’s only listed holding (Heliad Equity Partners), we arrive at a current NAV of €28.80 per share. This translates into a c 40% discount to NAV (although we note that FinLab’s share price is significantly higher today).
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Historical financials
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Edison Investment Research provides qualitative research coverage on companies in the Deutsche Börse Scale segment in accordance with section 36 subsection 3 of the General Terms and Conditions of Deutsche Börse AG for the Regulated Unofficial Market (Freiverkehr) on Frankfurter Wertpapierbörse (as of 1 March 2017). Two to three research reports will be produced per year. Research reports do not contain Edison analyst financial forecasts.
Research: Healthcare
On 18 September 2019, Onxeo released initial results from the first cohort of patients (n=3) in its ongoing Phase Ib DRIIV study with AsiDNA. The three patients had a progressive metastatic cancer (non-small cell lung cancer, triple negative breast cancer, gastric cancer) and were treated with AsiDNA plus carboplatin. No dose-limiting toxicity was observed. Two of the three patients have shown stable disease (RECIST) since the start of the treatment (more than four and five months). While it is too early to draw any conclusions on efficacy, stable disease status in 2/3 patients and a good safety profile appear encouraging. In the second part of the study, patients with various solid tumours will receive a combination of AsiDNA plus carboplatin and paclitaxel (standard of care in many solid tumours). Preliminary results are expected by end 2019.
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