Vef Ab · OMXSTO:VEFAB
Vef Ab — Investor Presentation (May 2022)
72 slides from Vef Ab's investor presentation, May 2022
Slide 1: Investor Presentation 1Q22
Investor Presentation 1Q22 The emerging market fintech investor
Slide 2: Introduction to VEF – The Emerging Market Fintech Investor
1 Introduction to VEF – The Emerging Market Fintech Investor 2 VEF’s Portfolio 3 Investment Opportunities 4 ESG 5 Appendix 2
Slide 3: The emerging market fintech investor
The emerging market fintech investor Riding one of the strongest multi-year secular growth trends in some of the world’s fastest-growing markets Emerging market specialists Fintech expertise Listed investment company • Extensive Emerging Markets investing experience • Deep sector knowledge built thr
Slide 4: Clear investment approach coupled with deep fintech expertise
Clear investment approach coupled with deep fintech expertise Targeted investment approach with a clear mandate … … and deep expertise across the fintech spectrum • Consumer SECTOR • SME CREDIT • Secured We target all lines of financial services inclusive of payments, credit and savings/investments.
Slide 5: A diversified portfolio across scale emerging markets
A diversified portfolio across scale emerging markets VEF has backed entrepreneurs across the emerging world since inception in 2015 Brazil – 62% Emerging Europe – Russia 4% Emerging Europe Mexico – 18% Africa - 2% Pakistan Mexico India Africa India – 9% Pakistan – 1% Brazil VEF investments 5 *% of
Slide 6: Portfolio commentary
Portfolio commentary VEF portfolio NAV as of 31-Mar-2022 • We have 16 holdings as of 1Q22, diversified by geography, USD 738 mln Portfolio business type and stage of development. evolution through • In 1Q22, we made two new investment: 1Q22 - USD 20 mln into Solfácil - USD 12 mln into Gringo Cash &
Slide 7: Strong track record of investing in benchmark private fintech names across EM
Strong track record of investing in benchmark private fintech names across EM We are now present in one of top 3 private fintech assets each in Brazil, Mexico & India. We have a track record of backing and successfully exiting fintech champions in Russia and Turkey. Current investments in two of Lat
Slide 8: Share price, NAV/share and the premium/discount
Share price, NAV/share and the premium/discount NAV/share & share price development 7,0 Premium/(Discount) to NAV 50% 6,0 40% 30% 5,0 20% 10% 4,0 0% 3,0 -10% -20% 2,0 -30% -40% 1,0 -50% 0,0 -60% dec-15 jun-16 dec-16 jun-17 dec-17 jun-18 dec-18 jun-19 dec-19 jun-20 dec-20 jun-21 dec-21 dec-15 jun-16
Slide 9: Strong history of value creation since inception
Strong history of value creation since inception Two successful exits in 2019 with IRRs >55%, and NAV per share IRR of 25% Focus Digital Bank Year of investment 2015 Focus Payments Year of investment 2017 Key Key Founded 2007 Amount invested USD 19 mln Founded 2013 Amount invested USD 11 mln facts f
Slide 10: VEF shareholder structure
VEF shareholder structure Owner Holdings, shares Holding % 1 Ruane, Cunniff & Goldfarb 217,718,740 20.9% 1 Libra Fund 124,198,165 11.9% Fidelity Investments (FMR) 95,139,868 9.1% Swedbank Robur Funds 92,102,205 8.8% 1 Wasatch Advisors Inc 83,295,964 8.0% 1 Wellington Management 49,585,580 4.8% Fidel
Slide 11: History of co-investing alongside some of our largest shareholders
History of co-investing alongside some of our largest shareholders in our later-stage portfolio companies VEF shareholders Co-investments with VEF 11
Slide 12: Strong team with significant EM/fintech experience
Strong team with significant EM/fintech experience Alexis Koumoudos David Nangle Henrik Stenlund CIO CEO CFO • Experience: 10 years EM investing and 5 • Experience: 20+ years EM FS Experience: 15+ years years entreprenuer • Renaissance Capital Head of Research and • COO of Pomegranate Investment, VN
Slide 13: VEF’s Portfolio
1 Introduction to VEF – The Emerging Market Fintech Investor 2 VEF’s Portfolio 3 Investment Opportunities 4 ESG 5 Appendix 13
Slide 14: VEF portfolio summary
VEF portfolio summary Invested amount 1Q22 fair value Company Country Segment Investment date Ownership % (USD mln) (USD mln) Brazil Asset focused ecosystem Dec-17 8.9% 98.4 394.1 Mexico Diversified FS for Mexican SMEs Jun-18 10.3% 56.5 135.6 India Mobile payments platform Apr-20 9.7% 17.0 42.4 Emer
Slide 15: A Selection of VEF’s Key Geographies and Portfolio Holdings
2 A Selection of VEF’s Key Geographies and Portfolio Holdings A. Brazil B. Mexico C. India D. Emerging Europe 15
Slide 16: Brazil is the most obvious fintech opportunity globally
Brazil is the most obvious fintech opportunity globally A SCALE MARKET OPPORTUNITY With a population of over 200 million people, Brazil is one of the world’s largest economies, and the kind of scale emerging market we like to invest in. ONE OF THE MOST ‘ONLINE’ MARKETS IN THE WORLD Brazil is one of
Slide 17: Brazil constitutes 64% of VEF’s portfolio with six active investments
Brazil constitutes 64% of VEF’s portfolio with six active investments Remaining portfolio 38,9% 64% 55,1% 1,5% 1,5% 1,5% 1,7% 2,8% % of 1Q22 total portfolio NAV 17
Slide 18: Creditas
Creditas Brazil’s leading digital-first secured lending platform Focus Asset Focused Ecosystem Fair value USD 394.1 mln Founded 2012 Investment USD 98.4 mln Key facts Key region Brazil Ownership stake 8.9% Share of NAV: 53.4% Year of investment 2017 Creditas in brief Creditas in figures Creditas is
Slide 19: Creditas’ strong business model is reflected in its financial metrics
Creditas Creditas’ strong business model is reflected well in its financial metrics 4 000 3 717 350 CAGR 322 CAGR 3 500 2021 YoY 198% 300 2 921 2021 YoY 159% 3 000 CY17-21 150% 257 250 CY17-21 175% 2 500 2 015 200 Credit 2 000 170 1 545 Revenue Portfolio 1 500 1 255 (R$ million) 150 124 (R$ million)
Slide 20: Creditas, product suite rollout and value creation history
Creditas, product suite rollout and value creation history With a loan book now standing at BRL 3.7b and significant strides in the ibuyer space, we see considerable upside in Creditas in the coming months 3Q20 4Q20 1H21 3Q21 4Q21 Creditas acquires Creditas acquires Creditas partners with Creditas $
Slide 21: A Selection of VEF’s Key Geographies and Portfolio Holdings
2 A Selection of VEF’s Key Geographies and Portfolio Holdings A. Brazil B. Mexico C. India D. Emerging Europe 21
Slide 22: Mexico is a scale market with a large underserved SME and consumer segment
Mexico is a scale market with a large underserved SME and consumer VEF Investments segment SME Credit and Financial Services • 7 million SMEs in Mexico, <10% of which have access to financing SME and Financial Services Mexico constitutes 19% of VEF’s portfolio • Banks focus predominantly on serving
Slide 23: Konfio
Konfio Digital banking and software tools for Mexico’s SMEs Focus Diversified financial services for Mexican SMEs Fair value USD 135.6 mln Founded 2014 Investment USD 56.5 mln Key facts Key region Mexico Ownership stake 10.3% Share of NAV: 18.4% Year of investment 2018 Revenue: 137% CAGR 2017-2021 G
Slide 24: Konfio
Konfio Data-driven financial services 24
Slide 25: Konfío product suite expansion & value creation history
Konfío product suite expansion & value creation history Rolling out a three-pillar strategy of lending, SaaS and payments to serve Mexican SMEs 3Q20 4Q20 1H21 3Q21 Konfío acquires ERP and Konfío becomes Mexico’s 4th accounting software Konfío raises $125m Series E VEF raises VEF share price and NAV
Slide 26: A Selection of VEF’s Key Geographies and Portfolio Holdings
2 A Selection of VEF’s Key Geographies and Portfolio Holdings A. Brazil B. Mexico C. India D. Emerging Europe 26
Slide 27: India is an exciting market with an evolved fintech ecosystem
VEF India is an exciting market with an evolved fintech ecosystem Investments Payments • A scale market with 2nd largest population and one of the largest banked populations in the world. High smartphone penetration, digital adoption and data usage has resulted in high Payments adoption of fintech.
Slide 28: Juspay
Juspay India’s leading mobile payments platform for online merchants Focus Mobile Payments Fair value USD 42.4 mln Founded 2012 Investment USD 17.0 mln Key facts Key region India Ownership stake 9.7% Share of NAV: 5.8% Year of investment 2020 Juspay in figures Juspay is India’s leading mobile paymen
Slide 29: Juspay
Juspay Digital payments are witnessing exponential growth in India and Juspay is well positioned to capitalize on the huge opportunity UPI is fast becoming the most favored method of digital payment…. Juspay has achieved ~1.6x scale compared to next four peers combined Value and volume of UPI transa
Slide 30: Rupeek
Rupeek India’s fastest-growing asset-backed digital lending platform Focus Secured Lending Platform Fair value USD 13.2 mln Founded 2015 Investment USD 12.0 mln Key facts Key region India Ownership stake 1.7% Share of NAV: 1.8% Year of investment 2021 Indian gold loan industry and Rupeek in figures
Slide 31: Blackbuck
Blackbuck – 3rd investment in India and 1st in embedded fintech India’s largest online trucking platform Focus Online trucking platform Fair value USD 10 mln Founded 2015 Investment USD 10 mln Key facts Key region India Ownership stake 1.0% Share of NAV: 1.4% Year of investment 2021 Blackbuck in fig
Slide 32: A Selection of VEF’s Key Geographies and Portfolio Holdings
2 A Selection of VEF’s Key Geographies and Portfolio Holdings A. Brazil B. Mexico C. India D. Emerging Europe 32
Slide 33: Emerging Europe
VEF Emerging Europe Investments Cross-Border Remittances Emerging Europe constitutes 4% of VEF’s ✓ Global remittances totaled USD +700 bln in 2020 (World Bank) and continues to grow portfolio ✓ The average cost of making a cross-border remittance in 4Q20 was 6.5% ✓ Growing share of cross-border remi
Slide 34: TransferGo
TransferGo A leading digital cross-border remittance provider in Europe Focus Cross Border Remittances Fair value USD 28.4 mln Founded 2012 Investment USD 13.9 mln Key facts Key region Europe Ownership stake 12.3% Share of NAV: 3.9% Year of investment 2016 TransferGo in figures TransferGo is a low-c
Slide 35: TransferGo bridges the unmet need for blue-collar migrants
TransferGo TransferGo bridges the unmet need for blue-collar migrants to conveniently transfer money abroad TransferGo: The business model in brief Global digital remittance volume is set to increase … “Blue-collar migrants have unique financial needs and they remain underserved” 714 733 750 694 642
Slide 36: Investment Opportunities
1 Introduction to VEF – The Emerging Market Fintech Investor 2 VEF’s Portfolio 3 Investment Opportunities 4 ESG 5 Appendix 36
Slide 37: Investment opportunities
Investment opportunities Three core avenues for capital allocation • Continuously evaluating three core opportunities for investment and shareholder value creation • Investment decisions and prioritization driven by expected IRR from each opportunity FOLLOW-ON INVESTMENTS • Opportunities to invest m
Slide 38: Annual investing
Annual investing Investing more in portfolio winners, companies we know inside-out, with high conviction on expected IRRs Strong history of follow-ons augmenting shareholder value creation 100,00 18 Follow-on investments vs. new investments (USD mln) 16 90,00 16 14 18 80,00 14 70,00 70 12 12 11 12 6
Slide 39: Pipeline heating up, but we remain disciplined and selective
Pipeline heating up, but we remain disciplined and selective • Deal flow as healthy as ever with fintech in emerging markets gaining momentum and high profile exits. • Country by country approach to searching for opportunities and teams that we believe will be winners in their space. • Leverage our
Slide 40: VEF investment case and outlook
VEF investment case and outlook Low exposure to the conflict region and Russian exposure now marked to zero The Russian invasion of Ukraine has had mixed effects on a small part of VEF’s NAV. Direct conflict related downside has been underwritten, as VEF has written down Russian holdings to zero. To
Slide 41: ESG
1 Introduction to VEF – The Emerging Market Fintech Investor 2 VEF’s Portfolio 3 Investment Opportunities 4 ESG 5 Appendix 41
Slide 42: Sustainability strategy
Sustainability strategy Sustainability as a fundamental part of VEF’s business model Three dimensions of sustainability at VEF: Core areas for VEF’s sustainability work 1 Sustainability at VEF as a company and investor Three areas specifically relevant to VEF as an EM fintech investor: • Recognize t
Slide 43: Investment process backed by a thorough ESG diligence
Investment process backed by a thorough ESG diligence VEF’s ambition is to integrate sustainability into all aspects of our own business, including the investment process and shareholding in portfolio companies From sourcing to investment decision • Discussed at an early stage • Fundamentally believ
Slide 44: Fintech as a driver for financial inclusion
Fintech as a driver for financial inclusion Our capital positively impact the access to fair and affordable financial services while staying true to our mandate of maximizing return VEF portfolio VEF supports the United Nations • Removing barriers to access and reaching segments that have been Susta
Slide 45: VEF publishes its new sustainability bond framework
VEF publishes its new sustainability bond framework VEF issued a sustainable bond in April 2022 and published a sustainability framework that focuses on sustainable investments and sustainability as an integral part of the business Eligible Sustainability Investments Categories for the Sustainabilit
Slide 46: Appendix
1 Introduction to VEF – The Emerging Market Fintech Investor 2 VEF’s Portfolio 3 Investment Opportunities 4 ESG 5 Appendix 46
Slide 47: Appendix
5 Appendix A. Deal sourcing B. History of value creation C. Governance structure D. Other portfolio holdings 47
Slide 48: Deal sourcing
Deal sourcing Country by country approach to targeting opportunities TOP-DOWN DRIVERS Capital markets Macroeconomics Tech adoption Regulation + + Cultural aspects + + Funding sources Access to talent Unit Economics Behaviour Regulatory drivers + + Exit environment Demographics IDENTIFY SEGMENTS OF F
Slide 49: Global fintech lens with trusted local partners
Global fintech lens with trusted local partners Strong value proposition: global lens + deep sector expertise + strong local partner support + local knowledge ….and leverages a strong network of local VC partners and co-investors providing a superior value proposition. ` COMMENTS • Each Emerging Mar
Slide 50: Rigorous investment process
Rigorous investment process We identify and track investees for a long time before investing DURATION COUNTRY-BY-COUNTRY APPROACH TO IDENTIFYING OPPORTUNITIES 1. Use top-down drivers and bottom-up mapping to identify attractive opportunities and teams Ongoing INVEST TIME AND BUILD A RAPPORT 3 months
Slide 51: Appendix
5 Appendix A. Deal sourcing B. History of value creation C. Governance structure D. Other portfolio holdings 51
Slide 52: Strong back drop for value accretive exits within the EM fintech space
Strong back drop for value accretive exits within the EM fintech space Growing wave of fintech M&A and exits Recent EM Fintech exits Evolution of Global Fintech M&A IPOs 993 972 $300 905 916 1 000 872 Company Valuation Offer size Year $250 900 $200 732 800 $33 bln $2.4 bln 2020 $150 700 234 241 $100
Slide 53: Appendix
5 Appendix A. Deal sourcing B. History of value creation C. Governance structure D. Other portfolio holdings 53
Slide 54: Diverse engaged Board with broad-based value-added experience
Diverse engaged Board with broad-based value-added experience Lars O Grönstedt Ranjan Tandon Chairman of the Board Board Member Experience: Experience: • CEO of Handelsbanken between 2001–2006, and Chairman of the • Founder and Chairman, Libra Advisors Board of Handelsbanken between 2006–2008 • Seve
Slide 55: Appendix
5 Appendix A. Deal sourcing B. History of value creation C. Governance structure D. Other portfolio holdings 55
Slide 56: VEF portfolio summary
VEF portfolio summary Invested amount 1Q22 fair value Company Country Segment Investment date Ownership % (USD mln) (USD mln) Brazil Asset focused ecosystem Dec-17 8.9% 98.4 394.1 Mexico Diversified FS for Mexican SMEs Jun-18 10.3% 56.5 135.6 India Mobile payments platform Apr-20 9.7% 17.0 42.4 Emer
Slide 57: Brazil constitutes 64% of VEF’s portfolio with six active investments
Brazil constitutes 64% of VEF’s portfolio with six active investments Remaining portfolio 38,9% 64% 55,1% 1,5% 1,5% 1,5% 1,7% 2,8% % of 1Q22 total portfolio NAV 57
Slide 58: Solfácil
Solfácil Brazil’s largest digital solar panel marketplace and financing platform Focus Solar Energy Financing Platform Fair value USD 20.0 mln Founded 2018 Investment USD 20.0 mln Key facts Key region Brazil Ownership stake 2.6% Share of NAV: 2.7% Year of investment 2022 Solfácil: The ecosystem for
Slide 59: Gringo
Gringo Brazil’s one-stop shop for drivers Focus Super-app for drivers Fair value USD 12.2 mln Founded 2020 Investment USD 12.2 mln Key facts Key region Brazil Ownership stake 10.2% Share of NAV: 1.7% Year of investment 2022 Gringo in figures Gringo is building a “super-app” for drivers in Brazil wit
Slide 60: Nibo
Nibo Brazil’s leading accounting SaaS provider for SMEs and accountants Focus Accounting SaaS provider for SMEs & Accountants Fair value USD 10.4 mln Founded 2012 Investment USD 6.5 mln Key facts Key region Brazil Ownership stake 20.1% Share of NAV: 1.4% Year of investment 2017 Nibo is the leading a
Slide 61: Nibo vs Fortnox – A VEF investment case
Nibo Nibo vs Fortnox – A VEF investment case Brazil v/s. Sweden Brazil’s scale relative to Sweden GDP $ 1,434 bln $ 531 bln 3x Population 210 mln 10 mln 20x Total addressable SMEs 10 mln 1.2 mln 5x Total addressable accountancies 80,000 23,500 3x Nibo v/s. Fortnox Total SME customers 345,000 410,000
Slide 62: FinanZero
FinanZero Digital marketplace for consumer loans in Brazil Focus Consumer Loan Marketplace Fair value USD 10.8 mln Founded 2016 Investment USD 4.2 mln Key facts Key region Brazil Ownership stake 18.4% Share of NAV: 1.5% Year of investment 2016 FinanZero in figures FinanZero is a pioneering digital m
Slide 63: FinanZero
FinanZero Digital marketplace for consumer loans in Brazil FinaZero: Business model in brief Lessons from the Swedish online broker market FinanZero to pocket up to 14% commission with no balance sheet risk Commissions are set to increase ‒ The inherent lock-in effects of the loan broking model make
Slide 64: Magnetis
Magnetis A digital investment advisor Focus Digital Investment Advisor Fair value USD 10.5 mln Founded 2015 Investment USD 5.7 mln Key facts Key region Brazil Ownership stake 17.5% Share of NAV: 1.4% Year of investment 2017 Magnetis is a digital investment advisor in Brazil, democratizing access to
Slide 65: Mexico is a scale market with a large underserved SME and consumer segment
Mexico is a scale market with a large underserved SME and consumer VEF Investments segment SME Credit and Financial Services • 7 million SMEs in Mexico, <10% of which have access to financing SME and Financial Services Mexico constitutes 19% of VEF’s portfolio • Banks focus predominantly on serving
Slide 66: Minu
Minu Mexico’s leading employee financial wellness company and the market leader for salary on demand Focus Salary on demand Fair value USD 0.5 mln Founded 2019 Investment USD 0.5 mln Key facts Key region Mexico Ownership stake 1.2% Share of NAV: 0.1% Year of investment 2021 Minu is the market leader
Slide 67: Africa
VEF Africa VEF Investments Investment Digital Consumer Financial Services • Severely underbanked population, one of the lowest banked regions globally Africa constitutes 3% of VEF’s portfolio • Lack of access impossible to address with branches / traditional banking model • Strong penetration of mob
Slide 68: Jumo
Jumo One of the largest and fastest money marketplaces in emerging markets Focus Banking as a Service Fair value USD 18.4 mln Founded 2014 Investment USD 14.6 mln Key facts Key region Pan-Africa, Asia Ownership stake 4.6% Share of NAV: 2.5% Year of investment 2015 JUMO is a full technology stack for
Slide 69: Pakistan
Pakistan VEF Investments Mobile Wallet and Credit • World’s sixth most populous country with 130 million mobile users but large unbanked population (only ~20% of Mobile Wallet and Credit adults have bank accounts) where as little as 2% of adults Pakistan constitutes 1% of VEF’s portfolio and 7% of S
Slide 70: Finja
Finja A leading digital lending platform and integrated payments ecosystem in Pakistan Focus Digital Lending & Payments Fair value USD 7.4 mln Founded 2016 Investment USD 2.9 mln Key facts Key region Pakistan Ownership stake 22.0% Share of NAV: 1.0% Year of investment 2016 Pakistan is a scale emergi
Slide 71: Abhi
Abhi Employee wellness platform catering to the needs of employees between pay cycles Focus Salary on Demand Fair value USD 1.4 mln Founded 2021 Investment USD 1.4 mln Key facts Key region Pakistan Ownership stake 15.0% Share of NAV: 0.2% Year of investment 2021 Abhi is VEF’s second fintech investme
Slide 72: Thank you
Thank you