Octopus Apollo VCT has announced an offer for up to £50 million (£35 million + £15 million overallotment). The VCT has total net assets of £386 million and a portfolio of around 45 companies.

Apollo invests in small and medium sized B2B software businesses. These aren’t traditional start-ups, with investees usually posting revenues of £2 million to £8 million a year.

Over the five years to September 2023, the VCT has delivered a NAV total return of 50.6% The VCT targets a dividend of 5% of NAV

Nicholas Hyett, Investment Manager at Wealth Club commented:

“Apollo’s focus on more mature businesses in the B2B software space has paid dividends in the last 18 months.

As more mature businesses, Apollo’s portfolio companies are less likely to be dependent on repeat funding rounds for survival – allowing them to weather the storm that’s rocked venture capital with relative ease. The focus on B2B software also helps, software businesses are inherently higher margin and cash generative – a software package can be built once but sold again and again with minimal additional cost.

In the 2021 VC boom Apollo’s companies were viewed as boring, unable to deliver the sort of stellar growth that sets Silicon Valley hearts racing. But in the new higher interest rate world, the potential mix of high margins, cash generation and low capital intensity are positively sexy.”