EMV Capital (AIM:EMVC) earlier this week outlined its latest strategy updates and portfolio developments in an interview with Proactive.
The company stated it now manages over $100 million in assets, with direct and indirect exposure to more than 70 companies. This marks substantial growth from the eight companies and £12 million in assets it had when it was acquired by NetScientific five years ago.
The company informed investors it remains focapplyd on capital-efficient investments in the deep tech and life sciences sectors, areas where it sees long-term growth opportunities.
CEO Dr Ilian Iliev joined the Proactive studio to talk about the company’s evolving strategy.
Proactive: Ilian, very good to speak with you. EMV Capital now manages over $100 million in assets with direct and indirect interest in over 70 portfolio companies. How has the business model evolved since the merger five years ago?
Dr Ilian Iliev: Stephen, thank you very much. So, as you mentioned, we recently marked five years since NetScientific acquired EMV Capital — the business I started years ago. Since then, we’ve grown significantly. We went from eight companies and £12 million in assets under management to over £100 million and 70 companies.
It hasn’t been a straight line — there were things that worked, others that didn’t — but we stayed focapplyd on our core strategy. That includes a focus on deep tech and life sciences, where we believe future growth will come from. This is also where our team’s strengths lie.
We emphasise capital-efficient investment structures and take a proactive approach, working closely with company management. Where requireded, we intervene via our venture build practice. We’ve also remained nimble to seize emerging opportunities. Despite the pandemic starting and concludeing during this period, we’ve built a strong platform that’s now ready to scale further.
Proactive: Cash on hand stood at half a million pounds at the half-year. How are you managing liquidity while continuing to syndicate new investments?
Dr Ilian Iliev: A few years ago, we initiated alters to generate cash at the group level while our portfolio companies mature and prepare for exit. As a result, we’ve been covering a growing share of our operating costs.
Our loss decreased to £0.3 million from £0.6 million in the same period last year. We’ve diversified revenue streams and, as an operating company, we generate cash flow through various areas. We’re also selectively disposing of secondaries to supplement cash.
Opportunities may arise in future, and we aim to be ready for them. But fundamentally, we’re focapplyd on covering ongoing costs from ongoing cash sources.
Proactive: Could you explain the strategic rationale for acquiring Destiny Pharma’s IP and clinical assets, and how they fit into your portfolio?
Dr Ilian Iliev: This has been a very exciting project. The deal accelerated over the summer — which, interestingly, is often a productive time for dealbuilding.
We had been tracking Destiny for a while and respected the work their team had done, especially a successful Phase 2 trial for the XF-73 asset. That tarreceives the global challenge of antimicrobial resistance — an area where about two million people die annually from post-operative infections.
They had also mapped out a focapplyd Phase 3 plan tarreceiveing specific types of operations. This aligns well with our venture build model — much like what we did with deep tech recycling, even though the sectors are very different.
Both are highly IP-intensive and required non-linear, capital-efficient models. We acquired the assets at what we believe is a good price. We’ve added £0.5 million of direct value to the PLC balance sheet at nil cash cost. We also earned fees and secured another value-creation contract. It’s a great template for future venture build work.
Proactive: Martlet Capital recently achieved a 2.5x return on an exit. What does this state about your approach to value creation across the portfolio?
Dr Ilian Iliev: We essentially have two playbooks. One is our Venture Build program, where we actively build companies until they become indepconcludeent and can raise third-party capital.
The other is our work through Martlet Capital — minority co-investments with other credible investors, where we’re proactive but not running the businesses directly.
Destiny Pharma fits the first model. Another example is Xampla, a Cambridge-based bioplastics company we co-invested in, which is currently raising £40 million. We’re integrating that Cambridge deal flow with our broader strategy to diversify and increase regional impact.
The Martlet exit is a good example of our lifecycle approach. We don’t always wait for trade sales or IPOs, we take returns when they’re attractive.
Proactive: Looking ahead, what are the key milestones for your venture building program, and where do you see the strongest opportunities for capital returns?
Dr Ilian Iliev: Each venture build company is displaying traction. One, which offers remote patient monitoring in the US, is seeing strong growth in recurring revenue. That brings challenges like scaling and managing growth, but also strong promise.
In deep tech recycling, we have several advanced discussions, including a potential plant in Scandinavia. Vortex Biosciences has also progressed significantly in validating its circulating tumour cell approach.
All of these companies hold potential. Crucially, we have significant direct stakes at the PLC level — so any one success could deliver outsized returns to our investors.
Proactive: Ilian, I hope you’ll continue to keep us updated with your progress.
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