Runway Growth Finance Provides First Quarter 2022 Portfolio Update

Rhea-AI Summary

Runway Growth Finance Corp. (RWAY) announced significant portfolio developments for Q1 2022, completing seven investments worth $135 million. This includes key loans to Mustang Bio and Revelle Aesthetics. Total commitments now reach $1.6 billion, with $1.3 billion funded since inception. The company suggests a growing trend toward debt funding among growth-stage firms as equity valuations decline. Additionally, Runway Growth reported liquidity events totaling $10.5 million, enhancing its financial position amidst market uncertainties.

Positive

• Completed seven investments in Q1 2022, totaling $135 million in new commitments.
• Total loan commitments reached $1.6 billion, with $1.3 billion funded since inception.
• Strategic loans to reputable companies like Mustang Bio and Revelle Aesthetics.
• Liquidity events contributed $10.5 million to strengthen financials.

Negative

• None.

• Completed Seven Investments in New and Existing Portfolio Companies Representing $135 Million in New Commitments and $83.5 Million in Funded Loans
• Total Loan Commitments and Funded Investments Grow To $1.6 Billion and $1.3 Billion Since Inception

WOODSIDE, Calif., April 07, 2022 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (“Runway Growth”) (Nasdaq: RWAY), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced a portfolio update for the first quarter ended March 31, 2022.

“Runway Growth capitalized on its strong momentum in the first quarter, utilizing proceeds from our revolving credit facility to complete seven new investments, strategically increase leverage and drive strong portfolio growth amidst increasing market uncertainty,” said David Spreng, Founder and CEO of Runway Growth. “We further built upon our track record of underwriting high-quality deals in the areas we believe we know best, particularly in the life sciences sector, with two new loans to Mustang Bio and Revelle Aesthetics. We believe our reputation as a trusted partner with a steady hand and unparalleled understanding of our borrowers’ businesses continues to distinguish Runway Growth as a preferred lender. As venture equity valuations decline and the equity capital markets become increasingly costly for entrepreneurs, we expect more management teams will turn to debt for the crucial capital needed to fund their next phase of growth and extend their runway – and Runway Growth is poised to take advantage of that opportunity.”

Originations

In the first quarter of 2022, Runway Growth funded seven investments: two investments in new portfolio companies, and five new investments in existing portfolio companies. These include:

• Completion of a new $75 million senior secured term loan commitment to Mustang Bio, Inc. (“Mustang Bio”) (Nasdaq: MBIO), funding $30 million at close. Mustang Bio is a clinical-stage biopharmaceutical company focused on translating today’s medical breakthroughs in cell and gene therapies into potential cures for hematologic cancers, solid tumors and rare genetic diseases. Mustang Bio aims to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest to fund research and development and to out-license or bring the technologies to market;
• Completion of a new $25 million senior secured term loan commitment to Revelle Aesthetics, Inc. (“Revelle”), funding $12.5 million at close. Located in Mountain View CA, Revelle is a developer of novel medical devices in aesthetics dedicated to women. Revelle focuses on precision technologies targeting root causes of aesthetics issues and generating more measurable and meaningful results for women and more reliable outcomes for practitioners;
• Completion of a $20 million upsize and follow-on investment in existing portfolio company FiscalNote, Inc. (“FiscalNote”). FiscalNote is a premier information services company focused on global policy and market intelligence. By combining artificial intelligence (AI) technology, expert analysis, and legislative, regulatory, and geopolitical data, FiscalNote is reinventing the way that organizations minimize risk and capitalize on opportunity;
• Completion of a $10 million upsize and follow-on investment to existing portfolio company, Fidelis Cybersecurity, Inc. (“Fidelis”). Founded in 2002 and located in Bethesda, MD; Fidelis is a cybersecurity company focused on threat detection, hunting, and targeted response of advanced threats and data breaches. Fidelis serves a list of blue chip private and sector and government customers;
• Funding of $6 million in two additional advances to existing portfolio company Epic IO Technologies, Inc (“EPIC IO”). Founded in 2001 and located in Fort Mill, South Carolina, EPIC IO is the global technology holding company for IntelliSite and Broad Sky Networks. Epic IO is focused on wireless connectivity and solutions powered by AI and Internet of Things (IoT), that seek to make its customers safer, smarter and more connected; and
• Completion of a $5 million upsize to our senior secured term loan to Turning Tech LLC d/b/a Echo 360 (“Echo 360”), an application software company that provides a video and data capture platform that helps instructors record and capture classroom lectures and teaching materials, allowing students 24/7 access to course and presentation materials, as well as the lecture itself, in order to drive better learning outcomes.

Liquidity Events

During the first quarter ended March 31, 2022, Runway Growth experienced two liquidity events totaling $10.5 million:

• In conjunction with CrossRoads Extremity Systems, LLC sale to Johnson & Johnson, we received $8.4 million in principal, fees and proceeds from the exercise and sale of our warrant; and
• In conjunction with CareCloud, Inc.’s (Nasdaq: MTBC) partial redemption of its Series A Preferred Stock, we received $2.1 million principal proceeds.
  

About Runway Growth Finance Corp.

Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com. 

Forward-Looking Statements

Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy, as well as market volatility resulting from the conflict between Russia and Ukraine and the sanctions and other restrictive actions taken by the U.S. and other countries against Russia. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

IR Contacts:

Alex Straus, Prosek Partners, astraus@prosek.com

Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com

FAQ

What investments did Runway Growth Finance Corp. make in Q1 2022?

Runway Growth completed seven investments totaling $135 million in the first quarter of 2022, including significant loans to Mustang Bio and Revelle Aesthetics.

How much capital has Runway Growth committed since its inception?

Since its inception, Runway Growth has committed $1.6 billion in total loan commitments and funded $1.3 billion.

What liquidity events did Runway Growth report in Q1 2022?

In Q1 2022, Runway Growth reported liquidity events totaling $10.5 million, including proceeds from the sale of interests in CrossRoads Extremity Systems and partial redemption from CareCloud.

What is the impact of declining equity valuations on Runway Growth?

Runway Growth expects more companies to seek debt funding due to declining equity valuations, positioning itself as a preferred lender during this shift.