13th September 2023
Lifting Venture Debt to Herculean Heights: 4 Insights into how Hercules Transformed its Venture Debt Portfolio in 2023.
Hercules' portfolio has increased aggregate trailing twelve months revenue by 70% over the last 12 months. These companies have also improved the average EBITDA margin from -324% to -218%.
Size represents the aggregate Trailing Twelve Month Revenue of Hercules' portfolio.
*
Data only includes publicly listed companies and UK companies with Companies House filings.
*
Data only includes publicly listed companies and UK companies with Companies House filings.
Hercules' loan portfolio is primarily concentrated in the life sciences and software sectors. Consumer lending has significantly declined in the past year, with Hercules issuing only two loans to consumer businesses during this period.
Hercules' top 10 loans make up 30% of its loan book. Life Sciences account for 6 of the 10. Hercules’ typically prices these loans at ~4% above prime. They often come with exit fees of 5-7%. Hercules' exposure to the consumer sector is expected to fall further with around $100 million of consumer loans maturing.
| Company | Sector | Maturity Date | Interest | Principal | Value | Exit Fee | PIK | |
|---|---|---|---|---|---|---|---|---|
| 1 | Axsome Therapeutics, Inc. | Drug Discovery ... | Jan 28 | Prime + 2.2% | 143,350 | 143,739 | 5.78% | - |
| 2 | Corium, Inc. | Drug Discovery ... | Aug 26 | Prime + 5.7% | 132,675 | 136,450 | 7.75% | - |
| 3 | Phathom Pharmaceuticals, Inc. | Drug Discovery ... | Sep 26 | Prime + 2.25% | 96,262 | 96,827 | 7.5% | 3.35% |
| 4 | Worldremit Group Limited | Consumer & Busi... | Feb 25 | 3-month SOFR + 9.25% | 88,250 | 88,741 | 3.2% | - |
| 5 | Rocket Lab Global Services, LLC | Communications ... | May 24 | Prime + 4.9% | 85,103 | 86,546 | 3.25% | 1.25% |
| 6 | Convoy, Inc. | Software | Mar 26 | Prime + 3.2% | 74,719 | 74,805 | 4.55% | 1.95% |
| 7 | uniQure B.V. | Drug Discovery ... | Jan 27 | Prime + 4.7% | 70,000 | 72,066 | 6.1% | - |
| 8 | Madrigal Pharmaceutical, Inc. | Drug Discovery ... | Apr 26 | Prime + 2.45% | 68,000 | 68,481 | 5.35% | - |
| 9 | VideoAmp, Inc. | Software | Feb 25 | Prime + 3.7% | 63,585 | 68,207 | 5.25% | 1.25% |
| 10 | TG Therapeutics, Inc. | Drug Discovery ... | Jan 26 | Prime + 1.2% | 65,023 | 65,130 | 5.69% | 2.25% |
| Company | Sector | Maturity Date | Interest | Principal | Value | Exit Fee | PIK | |
|---|---|---|---|---|---|---|---|---|
| 1 | Collective Health, Inc. | Consumer & Busi... | Aug 23 | Prime + 4.75% | 4,000 | 3,985 | - | - |
| 2 | Khoros (p.k.a Lithium Technologies) | Software | Jan 24 | 3-month SOFR + 8% | 57,113 | 57,037 | - | - |
| 3 | Tact.ai Technologies, Inc. | Software | Feb 24 | Prime + 4% | 2,672 | 2,657 | 5.5% | 2% |
| 4 | Rhino Labs, Inc. | Consumer & Busi... | Mar 24 | Prime + 5.5% | 12,908 | 12,841 | - | 2.25% |
| 5 | Valo Health, LLC | Drug Discovery ... | Apr 24 | Prime + 6.45% | 5,271 | 5,621 | 3.85% | - |
| 6 | Rocket Lab Global Services, LLC | Communications ... | May 24 | Prime + 4.9% | 85,103 | 86,546 | 3.25% | 1.25% |
| 7 | Tectura Corporation | Consumer & Busi... | Jun 24 | 8.25% | 8,250 | 7,073 | - | - |
| 8 | Tectura Corporation | Consumer & Busi... | Jun 24 | 0% | 23,703 | 13,263 | - | 5% |
| 9 | Unity Biotechnology, Inc. | Drug Discovery ... | Jul 24 | Prime + 6.1% | 16,766 | 17,999 | 6.25% | - |
| 10 | Udacity, Inc. | Consumer & Busi... | Aug 24 | Prime + 4.5% | 52,464 | 51,752 | 3% | 2% |
Hercules has seen notable credit spread tightening over the last 12 months. Interest rates above benchmark rates are around 1% lower than twelve months ago.
Hercules Capital
3-month LIBOR