Octopus Apollo VCT performance update

Written by Paul Davidson, Lead Fund Manager, Octopus Apollo VCT

9th October 2026 • Reading time: 9 mins

Twice a year, we provide shareholders with an update on how Octopus Apollo VCT is performing. This half-yearly update covers the six-months ending July 2026 and looks at the VCT’s latest Net Asset Value (NAV) per share, performance during the period, and the factors that influenced it.

By way of a brief recap, Octopus Apollo VCT invests in small and medium-sized UK business-to-business (B2B) technology companies. These are primarily software and AI businesses generating around £1 – £20 million in annual revenue, many of which are using Artificial Intelligence (AI) to transform how businesses operate. Octopus Apollo VCT focuses on companies with proven demand and strong growth potential, with the aim of delivering a regular dividend stream alongside the opportunity for long-term capital growth.

One way to measure performance is to look at the change in NAV after adding back any dividends paid. In simple terms, the NAV is the underlying value of the Venture Capital Trust’s (VCT’s) assets divided by the number of shares in issue, giving a per-share value for the fund. The NAV reflects the value of the portfolio companies, as well as any cash and other assets held by the VCT, less any liabilities.

We calculate NAV at least twice a year: once for the half-year accounts and again for the year-end accounts. This update covers the half-year reporting period ending July 2026 and includes Apollo VCT’s latest NAV, total return and dividends paid to shareholders.

Octopus Apollo VCT’s performance during the reporting period

Apollo’s NAV at 31 July 2026 was 48.3p per share, compared with 49.1p at the start of the period. One way to assess performance over the period is through total return, which takes the 1.3p per share dividend paid during the six months and adds it back to the change in NAV during the period. Octopus Apollo VCT delivered a total return of 1.0% for the period.

I am encouraged by the positive total return delivered against the backdrop in which we have been operating. Technology valuations have remained volatile, and the market has increasingly differentiated between businesses demonstrating high growth and those where growth has slowed, even as many high-growth companies have continued their path towards profitability. This trend has become more pronounced in the public markets during the reporting period.

Furthermore, I am pleased to say that the Board has declared an interim dividend of 1.2p per share, payable on 23 December to shareholders on the register as at 4 December 2026. Apollo’s core objective remains to provide a regular stream of tax-free dividends, targeting a yield equivalent to 5% of NAV per share, together with the potential for special dividends, although dividends are never guaranteed.

Key drivers of performance across the portfolio

During the period, 26 portfolio companies experienced valuation increases totalling £30.5 million. The principal drivers were strong revenue growth and, in some cases, improving profitability, which more than offset the impact of lower comparable market multiples across a number of businesses.

There were also 21 companies where valuations decreased. These movements reflected a combination of company-specific factors, including revised growth expectations in certain businesses, and lower valuation multiples across relevant comparable public software companies connected with their lower growth performance.

Overall, the portfolio increased in value during the period because the majority of our companies continued to deliver strong revenue growth. By contrast, companies experiencing slower growth have increasingly focused on improving profitability and operating sustainably. In some cases, slower revenue growth also resulted in lower valuations.

Key developments during the period

We invested £23.9 million during the six months across new and follow-on investments, including two new exciting additions to the portfolio: Gradient Labs and Hurree.

Gradient Labs is an AI-native customer operations platform that is developing AI agents to automate complex, regulated workflows specifically for financial services businesses. Hurree is an AI-powered data analytics platform that brings together information from different sources to provide businesses with dashboards, reporting and actionable insights.

Hurree is particularly interesting because it was Octopus Apollo VCT’s first investment made under the expanded VCT investment limits, which came into effect in April 2026. It is encouraging to see Apollo benefiting from these positive rule changes, particularly given its focus on supporting more established businesses within the VCT market.

There were no new disposals during the period, although Octopus Apollo VCT received £0.7 million of deferred proceeds from investments realised previously. While conditions for selling investments remain challenging, we continue to take a proactive approach and will seek opportunities to sell investments, either partially or in full, when we believe doing so is in shareholders’ best interests.

My hope is that we will see more exit activity taking place across the market as we move through the remainder of 2026 and into 2027.

As with any investment in early-stage businesses, there is no guarantee that these companies will achieve their growth ambitions or that investments will increase in value. Some may fall in value while others may fail completely.

How Octopus Apollo VCT is responding to the Autumn Budget reforms and what they could mean for shareholders

The changes are significant for Octopus Apollo VCT because they have materially increased the investable universe.

The higher annual and lifetime investment limits give us greater flexibility to invest in larger, more mature businesses and to continue supporting successful companies already in the portfolio as they scale. That’s particularly well aligned with Octopus Apollo VCT’s strategy because our focus is on established B2B technology companies, rather than very early-stage start-ups that are seeking product-market fit.

For shareholders, I think the important point is that the changes give us a broader opportunity set without changing the investment characteristics we look for. We remain disciplined about where we invest shareholder capital: businesses need to demonstrate strong growth momentum, established customer demand, solid unit economics and the ability to scale to profitability in due course.

How AI is shaping Octopus Apollo VCT’s investment strategy

AI is increasingly important to Octopus Apollo VCT, but it hasn’t changed the fundamentals of what we look for in an investment.

Across the existing portfolio, we’re seeing companies use AI in two ways. First, they are incorporating it directly into their products to improve functionality and create new revenue opportunities, which can support shareholder value. Second, they are using AI internally to become more efficient and productive, improving their scalability and profitability

We’re also selectively investing in AI-native businesses where AI is fundamental to the product itself. We’re seeing strong growth from a number of these investments, which is encouraging, but we remain focused on the same underlying characteristics we have always looked for: strong commercial momentum, recurring revenues, scalable business models and experienced management teams capable of using our capital effectively.

AI also creates challenges for parts of the software market, so we’re very conscious that simply being an “AI company” isn’t enough. Our job is to identify businesses where the technology can deliver lasting value for customers and ultimately sustainable growth.

Market outlook and portfolio positioning for the next 6-12 months

The market environment remains mixed. Technology valuations have been volatile and exit markets remain challenging, making it more difficult to realise investments. At the same time, we continue to see a high volume of high-quality private investment opportunities, and I am excited about the companies we have added to the portfolio.

For the existing portfolio, our priorities are straightforward: support companies such that they maintain strong revenue growth, improve capital efficiency and, where appropriate, progress towards profitability. We will continue to be rigorous about both new and follow-on investment while looking for opportunities to realise value from more mature businesses.

The expanded VCT limits also mean we now have greater flexibility in the types of businesses we can support. Combined with the opportunities we’re seeing around AI, that gives us a strong pipeline from which to be selective.