Vala's ethos is based on the idea that the best people to help companies grow and succeed are fellow entrepreneurs - people who know first-hand the joys and pains of building businesses.
And, in a crisis, the experience of our founder, Jasper Smith, and the other members of our investment committee really comes into its own.
Of course, the Coronavirus pandemic is different to anything we have experienced before. But our team's history of managing businesses through both the bursting of the dot com bubble and the Great Recession means we are well-equipped to guide and support the founders of our portfolio companies.
It is also true that this crisis has really proved the importance of investment diversification. The Vala EIS Portfolio's strategy is to invest across a variety of different industry sectors. As a result, the impact of Coronavirus varies considerably across the portfolio.
That said, we mustn't ignore the fact that every business is affected by this crisis at a human level. The way we live and work has changed quickly and dramatically, and for most people that has taken some sort of emotional toll. We've been offering whatever support we can to our founders during this time, including providing free training from a behavioural psychology consultancy, focused on how to cope with the personal challenges of lockdown and remain an effective leader of a remote team.
From a commercial point of view, there are a number of companies in our portfolio that are largely unaffected. For companies like Terralogix and Centology, both of which are developing software, it is easy enough for staff to switch to working from home. They do not have physical supply chains to worry about, and they are still at a pre-revenue phase. This means they can stick broadly to their existing business plans, without worrying about fluctuations in their expected cash flows.
PlayWorks is possibly the best example of a business in our portfolio that may actually be benefitting from the pandemic.
The games and video content developer recently announced a new partnership with Sky. 20 games from PlayWorks can now be played through an app accessed on the Sky Q remote control. This is part of Sky's longer term plans to add more new content to its services, including music, fitness, entertainment and education apps.
Sky joins PlayWorks' long list of big-name partners, which also includes Samsung, Roku, Facebook and Comcast. With a global market for its services and consumers spending more time than ever at home, PlayWorks has seen significant growth in new users and customer engagement across many of its channels during the pandemic.
Of course, as the world returns to something more like normal life, PlayWorks may find its rate of growth slowing down. But the good news of recent months fits into a pattern of strong performance over the last few years. PlayWorks' revenues were already growing strongly, long before any of us had heard of Covid-19, and the company recorded its first profitable year in 2019.
At the other end of the spectrum, Great British Biscotti Company (GBBC) is a reminder of just how difficult Coronavirus has been for countless small businesses.
In 2019, GBBC's biscuits started to be stocked in major supermarkets for the first time. But a significant proportion of its turnover is still generated from sales through venues like cafes, hotels and airport lounges - outlets that have now been closed for months. As such, the crisis represents a major challenge for GBBC and its CEO, Paul Rostand.
We've been working closely with Paul to support him as he preserves cash and plots a course through to the other side of the crisis. In March, Paul decided to close GBBC's factory temporarily and make use of the Government's furlough scheme. GBBC's biscuits have a reasonably long shelf-life, so the company has been able to continue some limited sales activity using existing stocks. We still love GBBC's product, brand and business model. Having taken sensible actions to weather the current storm, we remain confident that the company will bounce back as the economy begins to recover.
There is no doubt 2020 is going to be a tough year. But it is precisely times like these when our approach to investment has real potential value. Our team feels a genuine duty of care towards the founders we invest in, and we have thrown ourselves into the task at hand - supporting our portfolio companies in every way we can.