Runway Growth Finance Corp. Provides Third Quarter 2023 Portfolio Update
October 05 2023 - 8:30AM
Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the
“Company”), a leading provider of flexible capital solutions to
late- and growth-stage companies seeking an alternative to raising
equity, today provided an operational and portfolio update for the
third quarter ended September 30, 2023.
“Runway Growth’s focus on partnership with its portfolio
companies continues to generate investment opportunities that will
aid in realizing the full earnings potential of its credit-first
portfolio,” said Greg Greifeld, acting CEO of Runway Growth, Deputy
CIO and Head of Credit of Runway Growth Capital. “Third quarter
prepayments have further strengthened our balance sheet and
positioned Runway Growth with ample capital to re-deploy in
attractive deals as the market becomes more lender friendly. Our
team remains patient, as seen through our high-conviction
originations activity, which is in line with Runway Growth’s
strategy to mitigate losses and drive consistent returns. Our
robust pipeline gives us confidence that Runway Growth will
participate in strong financing solutions with appropriate
structuring and covenant packages. Runway Growth has dry powder and
remains confident in its ability to offer non-dilutive growth
capital to companies seeking to fuel future growth.”
In the third quarter of 2023, Runway Growth funded six
investments: one investment in a new portfolio company and five
investments in existing portfolio companies. These include:
- Completion of a
$20.0 million investment to Elevate Services, Inc. (“Elevate”).
Elevate is a global alternative legal services provider and legal
process outsourcer that serves members of the Fortune 500 and 60+
global law firms with outsourced consultancy, technology, and
managed services. The company has a suite of products and services
across several different operating business units including
contracts, contract lifetime management and insights, ElevateNext,
med legal, ElevateFlex, consulting, and software;
- Completion of a
$11.1 million follow-on investment to Kin Insurance (“Kin”). Kin is
a direct-to-consumer homeowner’s insurance business. The company’s
end-to-end platform handles all aspects of the business in-house,
from lead generation to bind-and-quote/underwriting to claims;
- Completion of a
$5.0 million follow-on investment to an existing portfolio company
that is an online learning platform offering educational videos
with a focus on creative learning, encompassing categories such as
art/animation, design, illustration, photography, filmmaking, and
writing;
- Completion of a
$3.0 million follow-on investment to Route 92 Medical, Inc. (“Route
92”). Route 92 is a medical device company that develops
neuro-interventional devices with a focus on treating acute
ischemic stroke and hemorrhagic stroke;
- Completion of a
$1.2 million follow-on investment to Madison Reed, Inc. (“Madison
Reed”). Madison Reed is a digitally enabled prestige hair color
company predominantly focused on women; and
- Completion of a
$0.5 million follow-on investment to Extensiv (formerly known as
“3PL Central”). Extensiv is a cloud-based software company
providing warehouse, inventory, and order management solutions to
third-party logistics firms and brands.
Liquidity EventsDuring the third quarter
ended September 30, 2023, Runway Growth experienced five
prepayments totaling $125.3 million and scheduled principal
amortization of $0.3 million. The prepayments include:
- Full principal
repayment of senior secured term loan to Allurion Technologies,
Inc. of $55.0 million;
- Full principal
repayment of senior secured term loan to Dtex Systems, Inc. of
$10.0 million;
- Full principal
repayment of senior secured term loan to Epic IO Technologies, Inc.
of $40.0 million;
- Full principal
repayment of senior secured term loan to Fidelis Cybersecurity,
Inc. of $14.9 million; and
- Partial principal
repayment of senior secured term loan to Marley Spoon SE (ASX:
MMM) of $5.4 million.
Portfolio Construction and
ManagementRunway Growth’s portfolio is concentrated in
first lien senior secured loans and conservatively focused on the
latest stage, highest quality companies in the venture debt market.
Given the evolving market backdrop, the Company’s portfolio is
constructed to be one of the most stable platforms in the venture
debt landscape. Since inception, Runway Growth has maintained
extremely high investment standards, which have only tightened in
the face of ongoing economic uncertainty, due in part by ongoing
inflationary pressure and a persistent elevated rate
environment.
As of September 30, 2023, the Runway Growth portfolio
included 29 debt investments to 28 portfolio companies and 62
equity investments in 45 portfolio companies, including 23
portfolio companies where Runway Growth holds both a debt and
equity investment. Investments were comprised of late and
growth-stage businesses in the technology, life sciences and
consumer services and products industries. Runway Growth’s normal
business operations include frequent communication with portfolio
companies.
Runway Growth is a credit-first organization, positioned as a
preferred lender in the venture debt space given its long-term
track record and close support for its partners. The Company has
proven risk mitigation methods that deliver attractive returns for
shareholders, and it remains confident in the durability of its
portfolio, which has industry-leading low loss rates. The team
continues to see strong demand for its creative financing solutions
and will maintain a heightened level of selectivity to minimize
losses and maximize returns for its shareholders.
About Runway Growth Finance Corp.Runway Growth
is a growing specialty finance company focused on providing
flexible capital solutions to late- and growth-stage companies
seeking an alternative to raising equity. Runway Growth is a
closed-end investment fund that has elected to be regulated as a
business development company under the Investment Company Act of
1940. Runway Growth is externally managed by Runway Growth Capital
LLC, an established registered investment advisor that was formed
in 2015 and led by industry veteran David Spreng. For more
information, please visit www.runwaygrowth.com.
Forward-Looking StatementsStatements included
herein may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements other than statements of historical facts included in
this press release may constitute forward-looking statements and
are not guarantees of future performance, condition or results and
involve a number of risks and uncertainties, including the impact
of COVID-19 and related changes in base interest rates and
significant market volatility on our business, our portfolio
companies, our industry and the global economy. Actual results may
differ materially from those in the forward-looking statements as a
result of a number of factors, including those described from time
to time in Runway Growth’s filings with the Securities and Exchange
Commission. Runway Growth undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements speak only as of the date of this press release.
IR Contacts:Stefan Norbom, Prosek Partners,
snorbom@prosek.com Thomas B. Raterman, Acting President, Chief
Financial Officer and Chief Operating Officer,
tr@runwaygrowth.com
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