In a year that has struggled to shake off the COVID hangover, there have been a number of economic headwinds affecting investors and their portfolios. US inflation at its highest level in forty years, successive steep interest rate rises, the war in Ukraine, supply chain shortages, troubles in the energy market, cryptocurrency meltdowns, and recessionary concerns have all impacted both the public and private markets. These factors have impacted investing as a whole, with significant volatility and downward trends in various market sectors.
But it’s not all doom and gloom. There were also some positives to take out of the year that was 2022.
Propel(x) is now a premium alternative investment platform
Propel(x) began as an investment platform focused on deep-tech startups. Recent years have seen a surge in alternative investing, so in 2022 we expanded to a broader alternative investing offering as well as startups.
As part of our expanded offering, we have worked hard this year to update and enhance our platform with a new look and feel and a better user experience for the investors who use our platform. We were delighted to be voted by financial media firm Benzinga* as the Best Alternative Investment Platform for Accredited Investors in 2022.
We were also happy to see that despite this year’s challenges for investors, we onboarded similar investor numbers in 2022 as we did in 2021.
If you’d like to know more about our alternative investment offerings, you can check out our article Backstage Pass Access to one of the Best Alternative Investment Platforms.
Propel(x) launches hedge fund offering
I am very proud of our achievement this year of launching our first hedge fund offering on the Propel(x) platform. We have aligned with Svelland Capital to provide Propel(x) members the opportunity to invest in the Svelland Global Trading Fund (SGTF), a commodities focused hedge fund which has delivered a three-year Compound Annual Growth Rate (CAGR) of 43.65% from July 2019 to June 2022, as reported in the Barclay Hedge report 2nd Quarter 2022 – BMFR Hedge Fund and CTA Rankings, ranking them as the second top performer in Barclay’s Global Macro hedge fund category.
Access to these types of funds is usually very limited; in fact, the initial minimum investment in the SGTF is set at $3 million. But thanks to Planck Fund Management Corporation (a wholly owned subsidiary of Propel(x)), qualified purchasers can invest in the SGTF for as little as $25,000.
Valuations have returned to more sensible levels
Let’s face it, valuations went a bit crazy in 2021. Data from Pitchbook’s US VC Valuations Report for Q2 2022 shows that the median early-stage VC pre-money valuation doubled throughout 2021, from $30M in Q1 up to $60M in Q4.
Thankfully, valuations have returned to more sensible levels in 2022, as I wrote in my recent valuations article. This means that private equity investing presents potentially more attractive opportunities, now that lower valuations are being seen in the market.
We continue to manage our own SPVs…
Propel(x) enables investors to participate in startup investments by investing via a syndicate in manageable amounts, which can be as little as $5,000. Propel(x) provides this service for its members through our wholly owned subsidiary Planck Fund Management Corporation. You can find out more about SPVs in our article on Investing through a Special Purpose Vehicle (SPV).
In 2022, we are pleased to say we again delivered all the necessary tax documents online and on time for all our SPVs.
…and have recently expanded our SPV offering to support other firms
To support startup investing and share our expertise in SPVs, in late 2022 we began oﬀering our SPV management services to others who may be looking to transition away from their current service provider or to create new SPVs on our full-service platform. We provide all necessary paperwork and compliance documentation, tax filings, etc. in our SPV offering via Planck Fund Management Corporation.
Some deal highlights from 2022
Some of 2022’s deal highlights on the Propel(x) platform included:
- Decent Health Insurance is on a mission to offer affordable healthcare for everyone, with solutions designed for small businesses and the self-employed to obtain health insurance that complies with the Affordable Care Act (ACA) at below market rates by banding together in a large group. Decent Insurance closed a Series A round on Propel(x) in February 2022 as part of a wider capital raising that according to Crunchbase totaled $18m. Propel(x) investors invested alongside notable institutional investors such as Menlo Ventures, QED, Foundation Capital, and Sequoia Capital.
- ChEmpower is an advanced materials and specialized chemistry start-up whose products help those in the semiconductor manufacturing industry increase yield, reduce cost, and preserve the environment. ChEmpower closed a Series Seed round on Propel(x) in April 2022 as part of a $4m financing round led by Intel Capital.
- Cyberdontics is a surgical robotics startup that is developing robots to automate restorative dentistry, starting with dental crowns and then with plans to progress to fillings. Cyberdontics closed a Pre-Series A round on Propel(x) in January 2022 as part of a wider capital raise that Crunchbase says totals $19.3m. Notable institutional investors involved in the Cyberdontics raise include Y-Combinator and C3 Ventures.
- TaskHuman helps users discover and connect with a global network of specialists in personal and professional wellbeing and growth. TaskHuman closed a Series B round on Propel(x) in June 2022, with data from Crunchbase showing TaskHuman has raised a total of $33m. Propel(x) investors participated alongside notable institutional investors such as Madrona Venture Group, USVP, Impact Venture Capital, and Zoom.
Some portfolio updates
Some notable portfolio updates from 2022 for companies that previously raised capital on the Propel(x) platform include the following:
- Repurpose makes plant-based compostable products as an alternative to disposable plasticware and is the leading national brand of plant-based compostable tableware in the US. Repurpose closed a Series A round on Propel(x) in 2019 and a subsequent Series A-2 round in 2020. Repurpose products are now available in up to thousands of locations across the country including Walmart, CVS, Wholefoods, Safeway/Albertsons, Wegmans, Target, and Amazon. In 2022, Repurpose closed a deal to distribute via the global corporation Costco.
- Brelyon is developing Ultra Reality (UR) display technology that brings a high-fidelity immersive experience to everyday use. Brelyon closed a Series Seed round on the Propel(x) platform in 2020 in a round led by Lockheed Martin and including global display giant LG. Brelyon continues to make progress getting their product to market. In 2022, their innovative product was recognized with the top award in the Display category in the 2022 SPIE and Photonics Media Prism Awards, to go with their Honoree award in the Display Week 2021 I-Zone And People’s Choice Award.
- WRM Software is commercializing a Work and Resource Management software platform for enterprise users that drives efficiency for emergency response and daily operations. In 2021, WRM Software closed a Seed Round on Propel(x). Throughout 2022, WRM have continued to develop their Storm Manager and Ops Manager applications and are gaining traction in the market with large utility providers, transport departments, and local municipalities, and plans to expand to other verticals requiring similar emergency response and operations management software.
- ProbiusDx is a medical data analytics company specializing in innovative diagnostic technology combining Quantum Electrochemical Spectroscopy (QES), Artificial Intelligence (AI), and machine learning. In 2018, ProbiusDx closed a Seed Round on Propel(x). Throughout 2022, ProbiusDx have continued to expand their reach and offerings in bioanalytical applications as they help bridge the data gap between physical biology and AI models of biology.
We launched our VC pro-rata program
A key achievement in 2022 was our successful engagement with a number of Venture Capital (VC) funds to launch our carry-sharing program. This program works by sourcing investors who have invested in an early-stage company that has gone on to do well and the investors have significant pro-rata rights that they do not plan to entirely fulfill in a subsequent capital round. Propel(x) can fulfill the remaining pro-rata stock allocation via an SPV created specifically for that purpose. To compensate the investor for sharing their pro-rata rights, Propel(x) will share half of their carried interest with the investor. Selected companies already included in this VC pro-rata program include Varo Bank, Decent Insurance, and TaskHuman.
So, there you have it – 2022, that’s a wrap! It’s been a challenging year at times but we at Propel(x) are proud of our expanded alternative investment offerings, the benefits we facilitated for the investors on our platform, and the opportunities we brought to the market.
I say a heartfelt thank you to all members of the dedicated Propel(x) team for your commitment, drive, and hard work throughout 2022.
Finally, I wish everyone a wonderful holiday season and all the best for a safe and prosperous new year. Bring on 2023!
If you are interested in adding alternative investments to your portfolio, check out the Propel(x) alternative investment platform for more information and potential opportunities.
This article is not an offer to sell or the solicitation of an offer to buy any security, which only can be made through official offering documents that contain important information about risks, fees and expenses. This article is for informational purposes only. We do not provide legal, financial, or tax advice and investors should consult their advisors prior to making any investment. As with any investment, past performance is no guarantee of future performance, and any investment decision must balance the risk against the potential return. Private investments are highly illiquid and risky and are not suitable for all investors. There is no guarantee that a liquidity event will ever take place. Even if a liquidity event takes place there is no guarantee that the investor will earn a return. Private placements are high-risk and there is a risk that an investor could lose their entire investment.
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Investors considering an investment in the Svelland Global Trading Fund must be qualified purchasers and should consider the Issuer Specific Risks Report for a detailed set of risks. Note an investor must have an account on the Propel(x) platform to access this risk report.
Securities offerings are done through Propel(x)’s affiliated broker-dealer, Hubble Investments LLC. Ownership interests in SPVs are managed through Propel(x)’s subsidiary Planck Fund Management Corporation. Neither Propel(x) nor Planck Fund Management Corporation is a registered broker-dealer.
* Regarding the Best Alternative Investment Platform for Accredited Investors in 2022, Benzinga is an affiliate partner of Propel(x)