Top executives at listed venture capital firm Molten Ventures bought shares in the company after reassuring investors that its funding line with Silicon Valley Bank (SVB) was secure.
hief executive Martin Davis and chief financial officer Ben Wilkinson bought a combined £45,000 worth of stock in separate transactions on Tuesday, according to stock market filings.
The move could be read as a vote of confidence in the shares, which had fallen sharply following last week’s failure of SVB, one of Molten’s main bankers. Insider buying is typically regarded as a bullish signal.
Molten Ventures had £60m in undrawn credit from JP Morgan and SVB’s UK branch, which was taken over by HSBC on Monday in a £1 rescue deal.
Molten told shareholders at the market open on Tuesday that the funding line was still available and that a £90m term loan partly provided by SVB had already been drawn down.
“SVB UK is one of two banks, the other being JP Morgan Chase Bank NA (JPM), that provide Molten’s current RCF (which is undrawn) of up to £60m and a £90m term loan,” Molten Ventures said in a notification to the London Stock Exchange.
“SVB UK provides 40pc of the facilities and JPM 60pc. Following the acquisition by HSBC of SVB UK, the facilities will continue to be available to Molten. Furthermore, Molten has a strong cash position, with gross cash balances currently in excess of £30m of which less than £1m is currently deposited with SVB UK.”
Molten is the largest publicly listed tech venture capital firm in Europe and is a significant player in the funding ecosystem for digital companies.
After listing on the Irish Stock Exchange in June 2016 as Draper Esprit, it has invested nearly £1bn in dozens of startups, including several Irish businesses such as Currency Fair and Manna.
It also has stakes in high-profile market-leading firms like Revolut and Trustpilot.
Molten said it took action to shore up its portfolio companies in the wake of SVB’s failure, which left thousands of tech companies worldwide potentially short of cash until the US regulators stepped in with a rescue plan for the bank on Sunday night.
Molten said it did not “anticipate a meaningful liquidity impact from the failure” but that it had “worked closely” with its portfolio companies to improve their position in recent days. The company did not specify what action it had taken.
The action prompted a brief recovery in the shares before markets fell again Wednesday over mounting concerns about Credit Suisse.
