MENLO PARK, Calif. - Runway Growth Finance Corp. (NASDAQ:RWAY), a business development company specializing in flexible capital solutions for late- and growth-stage companies, announced its third-quarter investment activities, which included seven funded investments totaling $75.3 million. The company provided an operational and portfolio update for the quarter ending September 30, 2024.
During the quarter, Runway Growth completed two investments in new portfolio companies and five follow-on investments in existing ones. Notably, the company invested $23.0 million in Snap! Mobile, Inc., which offers a software platform for fundraising and team management, and $45.3 million in Zinnia Corporate Holdings, LLC, a provider of business processing and technology solutions to the life insurance and annuity industry.
Additionally, Runway Growth made a $20 million investment to upsize an existing term loan with Elevate Services, Inc., a global provider of alternative legal services. The company also reported follow-on investments totaling $6.3 million in two other portfolio companies.
The third quarter also saw liquidity events for Runway Growth, including the full repayment of a $75.0 million senior secured term loan to CloudPay, Inc., and a $10.0 million assignment of the company's investment in Airship Group, Inc. to a joint venture with Cadma Capital Partners LLC.
Runway Growth emphasizes its commitment to high-quality investment standards and disciplined underwriting. The company's portfolio as of September 30, 2024, comprised 49 debt investments and 86 equity investments across technology, healthcare, and consumer services sectors.
The company's strategy focuses on frequent communication with portfolio companies to support their growth potential, positioning itself as a preferred lender in the venture debt space. This operational update is based on a press release statement, and Runway Growth has not updated any forward-looking statements contained therein.
In other recent news, Runway Growth Finance Corp. shared its Q2 2024 results and other significant developments. The company reported total investment income of $34.2 million and net investment income of $14.6 million, despite a net unrealized loss on investments of $6.3 million, primarily due to a markdown on their loan to Snagajob. Furthermore, Runway Growth Finance completed two new investments, contributing to a total of $75.5 million in funded loans.
In an effort to enhance shareholder value, a new $15 million stock repurchase program was approved, and a regular distribution of $0.40 per share was declared for the quarter. The company also anticipates a cautious fundraising environment for venture-backed companies and plans to accelerate origination growth thoughtfully while maintaining a credit-first approach.
At its 2024 Annual Meeting of Stockholders, Runway Growth Finance re-elected three members to the Board of Directors. The stockholders also ratified RSM US LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024.
According to analyst notes, the average outstanding debt portfolio declined by approximately 9.5% year-over-year. However, the company's loan portfolio is performing well, with all loans earning interest at or above floors, and total available liquidity stands at $249.8 million. These are recent developments that investors should take into account when considering Runway Growth Finance Corp.
InvestingPro Insights
Runway Growth Finance Corp.'s recent investment activities and portfolio update align with several key financial metrics and insights from InvestingPro. The company's market cap stands at $397.04 million, reflecting its position in the business development sector.
One of the most striking InvestingPro Tips is that Runway Growth Finance has been aggressively buying back shares. This strategy often signals management's confidence in the company's future prospects and can potentially increase shareholder value. Additionally, the company boasts a high shareholder yield, which is particularly relevant given its recent investment activities and liquidity events.
The company's dividend policy is also noteworthy. An InvestingPro Tip highlights that Runway Growth Finance has raised its dividend for 3 consecutive years and pays a significant dividend to shareholders. This is supported by the impressive dividend yield of 17.96%, which may be attractive to income-focused investors.
From a valuation perspective, Runway Growth Finance's P/E ratio (adjusted) stands at 5.88, suggesting the stock might be undervalued relative to its earnings. This could be of interest to value investors, especially considering the company's recent investment activities and portfolio growth.
It's worth noting that InvestingPro offers 8 additional tips for Runway Growth Finance, providing investors with a more comprehensive analysis of the company's financial health and prospects. For those interested in delving deeper into Runway Growth Finance's financial metrics and expert insights, the InvestingPro product offers a wealth of additional information to support investment decisions.
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