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Runway Growth Finance Corp. Reports Third Quarter 2021 Financial Results

November 4, 2021

Raised Gross Proceeds Totaling $100 Million with Initial Public Offering on October 25, 2021

Reports Net Investment Income of $10.7 Million for the Third Quarter

Conference Call Today, Thursday, November 4 at 4:30 p.m. ET

WOODSIDE, Calif., Nov. 04, 2021 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Raised total gross proceeds of approximately $100 million with initial public offering in October 2021
  • Net investment income (“NII”) of $10.7 million, or $0.32 per share
  • Annualized portfolio yield on debt investments of 15.3% for the quarter
  • Funded six investments totaling $101.3 million across two new and four existing portfolio companies
  • Received aggregate proceeds of $104.7 million from principal repayments, including normal amortization and prepayments
  • Inaugural quarterly dividend as a public company of $0.25 per share payable on November 22, 2021, the Company’s fifteenth consecutive quarterly dividend

Year-to-Date Highlights

  • Total investment portfolio of $646.4 million at fair value
  • Net investment income of $33.6 million, or $1.04 per share
  • Net asset value of $504.2 million, or $14.60 per share
  • Funded investments totaling $237.1 million: $140.1 million in nine new portfolio companies and $97.0 million in ten existing portfolio companies
  • Total loan commitments and investment fundings of $1.2 billion and $1.0 billion, respectively, since Runway Growth’s inception

“We are thrilled to be entering the next phase of Runway Growth’s strategy as a publicly-traded, pure-play growth lending platform,” said David Spreng, Founder, CEO and Chief Investment Officer of Runway Growth. “We continued to capitalize on a favorable market backdrop, achieving strong year-over-year NII growth. On a sequential basis, we were pleased to maintain the scale of our investment portfolio, despite heightened prepayment activity, as well as our solid NAV levels.”

Spreng continued, “Runway Growth is poised to finish 2021 from a position of strength and hit the ground running in 2022. We see strong origination trends across both sponsored and non-sponsored opportunities in a rapidly expanding VC operating environment. Our investment adviser, Runway Growth Capital, continues to add to its senior origination and credit teams to support quality portfolio growth. This is only the beginning for Runway Growth, and as we focus on executing against our long-term strategic vision, we remain equally focused on the success of our borrowers and growing return on equity through investment portfolio expansion.”

Third Quarter 2021 Operating Results
Total investment income for the quarter ended September 30, 2021 was $18.6 million, compared to $14.2 million for the quarter ended September 30, 2020. The year-over-year improvement is primarily due to an increase in interest income on investments resulting from the new loans originated and higher fee income associated with early repayments.

The Company's dollar-weighted annualized yield on average debt investments for the quarter ended September 30, 2021 and 2020 was 15.3% and 14.8%, respectively. The Company calculates the yield on dollar-weighted debt investments for any period measured as (1) total investment-related income during the period divided by (2) the daily average of the fair value of debt investments outstanding during the period.

Total operating expenses for the quarter ended September 30, 2021 were $7.9 million, compared to $4.7 million for the quarter ended September 30, 2020. The increase was primarily due to an increase in incentive fees, management fees, credit facility fees, interest expense due to an increase in leverage utilization during the quarter and one-time expenses associated with the initial public offering.

Net investment income for the quarter ended September 30, 2021 was $10.7 million, or $0.32 per share, compared to $9.5 million, or $0.35 per share, for the quarter ended September 30, 2020.

For the quarter ended September 30, 2021, net realized gain on investments was $0.7 million, compared to a net realized gain on investments of $1.1 million, for the quarter ended September 30, 2020.

For the quarter ended September 30, 2021, net change in unrealized depreciation on investments was $1.2 million, compared to a net change in unrealized appreciation on investments of $0.2 million for the prior-year period.

Portfolio and Investment Activity
As of September 30, 2021, Runway Growth’s investment portfolio had an aggregate fair value of approximately $586.4 million and was comprised of approximately $531.6 million in senior secured term loans and $54.8 million in equity and equity-related investments, including warrants across 32 portfolio companies.

During the third quarter, Runway Growth funded six investments totaling $101.3 million, including two investments in new portfolio companies, one new investment in an existing portfolio company and three follow-on investments in existing portfolio companies.

Total portfolio investment activity for the three and nine months ended September 30, 2021 and 2020 was as follows:

 Three Months
 Three Months
 Nine Months
 Nine Months
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
 (unaudited) (unaudited) (unaudited) (unaudited)
Beginning Investment Portfolio$617,617,043  $455,487,711  $621,826,650  $467,981,699 
Purchases of Investments(1) 103,788,319   42,738,800   239,458,881   144,044,139 
Purchases of U.S. Treasury Bills 60,000,660   84,998,465   115,000,509   179,998,299 
Amortization of Fixed Income Premiums or Accretion of Discounts 1,879,221   2,458,970   5,539,659   6,808,066 
Sales or Repayments of Investments (102,817,182)  (18,170,132)  (197,534,296)  (76,805,766)
Scheduled Principal Payments of Investments (3,605,000)  (3,797,683)  (5,671,437)  (6,128,394)
Sales and Maturities of U.S. Treasury Bills(2) (29,999,952)  (44,999,250)  (124,999,118)  (194,985,264)
Realized (Loss) on Investments 718,310   1,142,706   (4,094,970)  (5,370,702)
Net Change in Unrealized Appreciation (Depreciation) on Investments (1,228,382)  243,742   (3,172,841)  4,561,252 
Ending Investment Portfolio$646,353,037  $520,103,329  $646,353,037  $520,103,329 
1. Includes PIK interest.           
2. Excludes $25,999,624 in U.S. Treasury Bills sold short for the nine months ended September 30, 2020.      

Net Asset Value
As of September 30, 2021, net asset value (“NAV”) per share was $14.60, compared to $14.61 as of June 30, 2021. Total net assets at the end of the third quarter of 2021 were $504.2 million, compared to $477.7 million at the end of the prior period.

For the quarter ended September 30, 2021, net increase in net assets resulting from operations was $10.2 million, or $0.31 per share, compared to $6.7 million, or $0.21 per share, for the quarter ended June 30, 2021.

Liquidity and Capital Resources
As of September 30, 2021, the Company had approximately $135.9 million in available liquidity, including unrestricted cash and cash equivalents and $135.0 million in available borrowing capacity under the Company’s credit facility, subject to existing terms, advance rates and regulatory and covenant requirements.

The Company ended the quarter with a debt-to-equity leverage ratio of approximately 16%, compared to 24% for the quarter ended June 30, 2021.

Initial Public Offering
On October 25, 2021, the Company closed its initial public offering of 6,850,000 shares of common stock at a public offering price of $14.60 per share.

Runway Growth received net proceeds from the offering of approximately $94.0 million, after deducting underwriting discounts and commissions, but before expenses, and used all of the net proceeds from the offering to pay down its existing indebtedness outstanding under its credit agreement and to make investments in accordance with its investment objectives and for general corporate purposes.

On October 28, 2021, the Company’s board of directors declared a regular quarterly distribution of $0.25 per share for the fourth quarter of 2021, payable on November 22, 2021 to stockholders of record as of November 8, 2021.

Conference Call
Runway Growth will hold a conference call to discuss its third quarter 2021 financial results at 1:30 p.m. PT (4:30 p.m. ET) on Thursday, November 4, 2021.

To participate in the conference call, please dial (800) 446-1671 and reference conference ID 50245586. A live webcast, as well as supplemental slides to support the webcast, will be available in the investor section of the Company’s website at, and will be archived for 90 days following the call.

About Runway Growth Finance Corp.
Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late-stage and growth 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. 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

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. 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,

Thomas B. Raterman, Chief Financial Officer,

Runway Growth Finance Corp. 
Consolidated Statements of Assets and Liabilities 
     September 30, 2021    December 31, 2020 
Investments at fair value:         
Non-control/non-affiliate investments at fair value (cost of $549,308,847 and $532,676,057, respectively) $562,496,579  $541,978,736  
Control/affiliate investments at fair value (cost of $34,978,846 and $13,911,494, respectively)  23,855,798   9,845,854  
Investment in U.S. Treasury Bills at fair value (cost of $60,000,558 and $70,001,472, respectively)  60,000,660   70,002,060  
Total investments at fair value (cost of $644,288,251 and $616,589,023, respectively)  646,353,037   621,826,650  
Cash and cash equivalents  936,503   14,886,246  
Subscriptions receivable  1,139,528     
Accrued interest receivable  2,031,720   2,682,405  
Other accounts receivable  161,918   359,000  
Deferred offering costs  439,929     
Prepaid and deferred expenses  190,342   137,096  
Total assets  651,252,977   639,891,397  
Credit facilities  80,000,000   99,000,000  
Deferred credit facility fees (net of accumulated amortization of $733,251 and $383,873, respectively)  (1,252,978)  (1,583,230) 
Total debt, less unamortized deferred financing costs  78,747,022   97,416,770  
Reverse repurchase agreement  59,699,461   69,650,000  
Accrued incentive fees  5,971,134   5,007,065  
Due to affiliate  227,038   143,515  
Interest payable  811,857   468,014  
Accrued expenses and other liabilities  1,595,480   962,348  
Total liabilities  147,051,992   173,647,712  
Commitments and contingencies (Note 3)         
Net assets         
Common stock, $0.01 par value; 100,000,000 shares authorized; 34,530,614 and 31,414,051 shares issued and outstanding, respectively  345,306   314,140  
Additional paid-in capital  513,082,399   466,872,304  
Distributable (losses) earnings  (9,226,720)  (942,759) 
Total net assets $504,200,985  $466,243,685  
Net asset value per share $14.60  $14.84  

Runway Growth Finance Corp.
Consolidated Statements of Operations
 Three Months
    Three Months
    Nine Months
    Nine Months
 September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Investment income           
From non-control/non-affiliate:           
Interest income$17,612,993  $12,184,940 $49,863,060  $36,757,088 
Payment in-kind interest income 434,464   1,568,799  2,424,022   2,336,646 
Other income 101,266   117,882  342,236   682,725 
Interest income from U.S. Treasury Bills 117   47  127   17,143 
Dividend income 343,755   343,755  1,031,265   1,010,959 
Other income from non-investment sources 131   300  390   33,073 
From control/affiliate:           
Interest income 113,554     113,554    
Payment in-kind interest income 3,786     3,786    
Total investment income 18,610,066   14,215,723  53,778,440   40,837,634 
Operating expenses           
Management fees 2,301,656   1,721,913  6,647,207   5,017,590 
Incentive fees 2,686,475   1,650,930  6,498,482   4,871,906 
Interest expense 812,852   407,701  2,302,582   595,195 
Professional fees 505,545   198,217  1,151,610   919,390 
Overhead allocation expense 249,141   161,553  655,260   507,536 
Administration fee 179,500   132,715  420,360   378,395 
Facility fees 738,087   132,083  1,447,288   510,805 
Directors’ fees 67,750   60,250  201,750   188,250 
Tax expense      41   1,319 
Other expenses 327,936   227,781  890,530   807,240 
Total operating expenses 7,868,942   4,693,143  20,215,110   13,797,626 
Net investment income 10,741,124   9,522,580  33,563,330   27,040,008 
Realized and unrealized gain (loss) on investments           
Realized gain (loss) on non-control/non-affiliate investments, including U.S. Treasury Bills 718,310   1,142,706  (4,076,766)  (5,370,702)
Net change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S. Treasury Bills (6,857,594)  243,742  (10,979,143)  4,561,255 
Net change in unrealized appreciation on control/affiliate investments 5,629,212     7,806,302    
Net realized and unrealized gain (loss) on investments (510,072)  1,386,448  (7,249,607)  (809,447)
Net increase in net assets resulting from operations$10,231,052  $10,909,028 $26,313,723  $26,230,561 
Net increase in net assets resulting from operations per common share$0.31  $0.40 $0.81  $0.99 
Net investment income per common share$0.32  $0.35 $1.04  $1.02 
Weighted-average shares outstanding 33,160,481   27,271,559  32,360,107   26,603,966