Molten Ventures has nearly halved the value of its stake in UK semiconductor startup Graphcore amid mounting speculation that an acquisition of the Bristol-based company could be imminent.
According to Molten’s annual report, which was released this morning and shows financial results for the year up to March 31, 2024, its stake in Graphcore is now worth just £20.6m — a 45% drop from its valuation of £37.2m in 2023.
The publicly-listed firm — which also backs VC funds — has invested £24m across several rounds since Graphcore raised a $30m Series A in 2016, and participated in the company’s most recent raise of $222m in 2020.
It’s the second year in a row that Molten has written down its stake in Graphcore. In 2022, the investor valued its stake at £113.5m.
Since launching in 2016, Graphcore has raised more than $600m, according to Dealroom, from investors including Sequoia, Baillie Gifford and Schroders. It hit a valuation of $2.8bn after it raised in 2020.
But since then it’s been reported that Sequoia has written off the value of its stake in the business, Baillie Gifford cut its by half and Schroders reduced its valuation by 25%.
A turbulent period for Graphcore
The results come after a bruising year and a half for Graphcore. In 2022, it was reported that a landmark $1bn deal to supply chips to Microsoft had been scrapped. The company made layoffs in September of that year and closed its Oslo office a month later.
The startup’s annual report, released in September 2023, said if it didn’t raise extra financing within months, there was a “material uncertainty” over its ability to continue as a “going concern”.
Those accounts showed the company’s revenues hit just $2.7m in 2022, falling 46% from the previous year “due to lower hardware sales to key strategic customers”. Losses also rose 11% to $204.6m in 2022.
This year, speculation has risen that Graphcore is on the hunt for an acquirer, with SoftBank — which also owns UK-founded semiconductor behemoth Arm — reported to be in talks with the company.
At the end of May, Graphcore moved to restructure its balance sheet, increasing speculation that a takeover could be just around the corner.
Graphcore and Molten declined to comment.
Other unicorn valuations drop — but Revolut increases
Molten also cut the valuations of several other portfolio companies.
The value of Molten’s stake in Finnish unicorn Aiven dropped from £94.5m to £82m, at French crypto unicorn Ledger it fell from £71.8m to £61.1m and UK fintech ThoughtMachine from £109.6m to £99.2m.
The value of Molten’s stake in Revolut increased by £10.6m to £65.1m, which included a £4m worth of new shares that Sifted understands is the result of the firm acquiring a 19% secondary stake in Seedcamp’s third fund.
Overall, the gross value of Molten’s portfolio stayed roughly flat at £1.4bn.
