Frontier Digital Ventures (FDV) has exited it’s investment in IMCongo, an online property portal in the Democratic Republic of Congo after investing $175,000 and 332,500 Frontier shares via a share sale agreement to gain an initial 65.9% ownership of the portal.
According to Frontier’s CEO and Founder, Shaun Di Gregorio: “The exit of IMCongo is an example of portfolio rationalisation and prudent capital allocation. Due to the overall success of the portfolio to date, our internal hurdle for investment is high. Frontier assesses the performance of each investment on a monthly basis and deliberately optimises our time and financial resources towards investments with the greatest monetisation potential.”
IMCongo recorded revenues of A$10,924 (100% basis) in 1H 2017, compared with total revenue across the whole Frontier portfolio of A$10,909,973 for the same period.
Under an agreement with Frontier, IMCongo vendors have sold their 332,500 Frontier shares for A$242,725 to new investors and will use the sale proceeds to repurchase Frontier’s shareholding in IMCongo. Frontier expects the transaction to conclude in September 2017. The proceeds will add to Frontier’s existing cash balance.
Frontier Digital Ventures operates online classifieds businesses in underdeveloped, emerging countries or regions with a particular focus on property and automotive verticals and general classifieds websites. Its portfolio currently consists of 17 market leading companies, operating businesses across 22 markets.
IMCongo vendors acquired Frontier shares at A$0.50 per share through a share swap executed at Frontier’s IPO. The decision was made by Frontier to exit IMCongo as a result of its portfolio optimisation process and underperformance of IMCongo relative to the high performance hurdles established across all Frontier’s investments.
FDV says rationalisation is consistent with its strategy to establish a portfolio of 10 investments at the monetisation stage and drive value for its shareholders.