Chrysalis Investments has made its third new investment in a week, this time investing in a US cybersecurity company.
The £1.1bn investment trust invested a $67m (£49m) stake in Deep Instinct, which uses AI machine learning to prevent cyberattacks.
Its investment is part of a second close to the company’s $100m D funding round, led by Blackrock and supported by Untitled Investments and Millennium among others, and brings the total raised by Deep Instinct to $240m to date.
New York-based Deep Instinct claims to be the first firm to apply “end-to-end deep learning” to cybersecurity. Chrysalis Investments co-manager Richard Watts (pictured left) said this gives it an edge over rival firms, most of which employ Endpoint Detection and Response solutions.
“With cyberattacks continuing to be a significant risk for enterprises, including the recent spate of ransomware, we believe Deep Instinct’s technology could prove to be game changing in the industry,” he said.
“We are delighted to be making this investment and look forward to working with CEO Guy Caspi and the management team as they execute their aggressive growth plans for 2021 and beyond.”
Revamped portfolio
Deep Instinct represents 4% of Chrysalis’ portfolio, according to the latest portfolio update. It is Chrysalis’ third new investment in the past week as managers Watts and Williamson put the £300m raised from their oversubscribed placing in March to work.
Chrysalis Investments portfolio holdings
| Portfolio Company | % of investment portfolio |
| Klarna | 27% |
| Starling Bank | 11% |
| Wefox | 8% |
| THG | 8% |
| Wise | 8% |
| Smart Pension | 6% |
| Embark | 5% |
| Graphcore | 5% |
| Deep Instinct | 4% |
| You & Mr Jones | 4% |
| Featurespace | 3% |
| Secret Escapes | 2% |
| Sorted | 1% |
| Growth Street | 0% |
| Cash | 8% |
Source: Chrysalis Investments
Last Monday, Watts and Williamson snapped up a £75m stake in retirement savings platform Smart Pension and the following day revealed plans to plough up to £45m in Revolution Beauty ahead of its expected IPO on the Aim exchange.
Smart currently represents 6% of the portfolio, putting it just behind Wefox, The Hut Group (THG) and Wise.
Broker Liberum says the investment in Deep Instinct will account for the majority of Chrysalis’ remaining cash. Since the fund raise co-manager Nick Williamson (pictured right) said he and Watts have also made “substantial follow-ons” in Wefox and Starling Bank.
It also has additional liquidity sources from its £32m credit facility and THG, which floated last September, as well as Wise, which is planning to go public in a direct London listing tomorrow. Another holding Embark is reportedly being eyed as a takeover target by Lloyds.
Shares in Chrysalis were trading 0.2% higher at 245.5p on Tuesday morning. The trust currently trades at an 18.8% premium to NAV, higher than the 16% Growth Capital average.
