TMT Investments has made an investment in Quote Roller, the developer of business productivity software, and Le Tote, the fashion discovery platform, for a total of $650k. The venture capitalist, which invests in high-growth, internet-based companies, has also raised a further $2.65m. Given the uniqueness of the offerings, the significant size of the addressable markets and the lack of direct competition, we feel both these investments have the potential to attract higher valuations. For those looking for exposure to high-growth companies within the internet space, we recommend TMT as one to watch.
Investment In Quote Roller
Quote Roller has two main products: Quote Roller and PandaDoc. Quote Roller automates the assembly and delivery of business proposal quotes, providing a host of interactive features. PandaDoc automates the electronic delivery and execution of any contract-related documents in virtually any format. The investment consists of a $400k unsecured convertible promissory note at an interest rate of 2% per annum. According to IDC, the CRM software market was estimated at $18bn in 2012.
Investment In Le Tote
Le Tote is a female focused platform, which gives access to garments and accessories for a fixed price of $49 per month. The investment consists of a $250k unsecured convertible promissory note at an interest rate of 2% per annum. According to the company, the estimated market size for fashion in the US today is $240bn and for the apparel & accessory ecommerce market is $65bn.
Equity Capital Raise
The shares were sold to new and existing investors at a price of $1.85/share, being a discount of 5.6% to the closing price on the previous day. The additional capital will be used fund follow-on investments as well as to pursue new investment opportunities.
For those looking for exposure to high-growth companies within the internet space, we recommend the company as one to watch. The main risk for TMT Investment is the high failure rate of early-stage businesses, but we feel that this risk is reduced by the large number of investments it has made. Furthermore, we note that the success of just one of these companies could result in a significant increase in its valuation.