Shares in growth capital fund Chrysalis jumped by 10% on a significantly upgraded valuation of portfolio company Starling Bank.
Shares in the £582m investment company, which invests in companies preparing to float on the stock market, leaped by 11.4p, to 123.4p on news of the double-digit rise in the portfolio’s net asset value after debts.
Starling now accounts for 42.3% of the portfolio after the holding rose in value from £271m to £384.7m in the quarter. Annual results to 31 March had shown a 37% post-tax return on capital which fund managers Richard Watts and Nick Williamson said compared “very favourably” to traditional UK banks.
They said: “The material increase in the valuation of Starling was a function of both the progress made in the core UK bank, but also the inclusion for the first time of a valuation for Engine”, its banking-as-a-service technology platform.
In May last year, Chrysalis opined that Starling's SaaS platform could generate hundreds of millions of pounds a year for the UK digital bank, propelling it towards a £10 billion valuation.
Klarna, the buy-now-pay-later credit provider whose valuation slump was at the heart of Chrysalis’ difficulties in 2022, remains the second biggest holding at a steady 15% of assets. The value of the stake rose to £136.9m from £125.7m on 31 March.