Vef Ab · OMXSTO:VEFAB
Vef Ab — Investor Presentation (December 2020)
63 slides from Vef Ab's investor presentation, December 2020
Slide 1: Investor Presentation December 2020
Investor Presentation December 2020 The emerging market fintech investor
Slide 2: Summary
Summary Ver Strong finish in banner year for all things digital + @4 ended out 2020 on a strong note as our companies continue to benefit from the shift to digital financial services across the emerging world, which saw a step change in growth through 2H20 due to COVID-19. NAV 4Q20 NAV/share rose to
Slide 3: Introduction to VEF — The Emerging Market Fintech Investor
Ver 1 Introduction to VEF — The Emerging Market Fintech Investor
Slide 4: IRR (NAV per share) IRR (Price per share)
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ IRR (NAV per share) IRR (Price per share)
Slide 5: Clear investment approach coupled with deep fintech expertise
Clear investment approach coupled with deep fintech expertise Ver Targeted investment approach with a clear mandate... _... and deep expertise across the fintech spectrum + Consumer SECTOR . CREDIT SME ]ERES We target all ines of financial services inclusive of payments, credit * Secured and savings
Slide 6: Brazil
Russia Emerging Europe Pakistan Mexico Africa India Brazil
Slide 7: Portfolio commentary
Portfolio commentary Portfolio evolution through 2020 Portfolio focus and concentration Cash position Pipeline We have 12 holdings as of 4Q20, diversified by geography, business type and stage of development. In 2020, we made our first investment in India: Invested USD 13m in Juspay, one of the coun
Slide 8: VEF portfolio summary
VEF portfolio summary VEF @creditas Brazil Secured Lending Platform Dec-17 9.8% 735 EE 160.0 Diversified financial services 9, konfio Mexico carly a wets Jung 41.0% i 275 GN 4s5 ae Cross-Border Remittances Jun46 15.4% Bh tio ME 286 OJUSPAY India Mobile Payments Platform Apr-20 9.9% Bh is0 Biv. . y A
Slide 9: Successful exits
Successful exits 4.5 4.0 3.5 Date: Date: Exit: Exit: 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 NAV/Share (SEK) Share Price (SEK) Realized returns Unrealized returns
Slide 10: NAV/share & share price development
NAV/share & share price development 4.5 Premium/(Discount) to NAV1 4.0 10% 3.5 0% 3.0 2.5 -10% 2.0 -20% 1.5 -30% 1.0 0.5 -40% 0.0 -50% Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 NAV/Share (SEK) Share Price (SEK) Premium/(Dis
Slide 11: Ruane,
Ruane, Cunniff & Fidelity International (FIL) 26,514,673 3.20% Goldfarb Svenska Handelsbanken AB for PI 15,343,000 185% GADD & Cie S.A. 14,280,957 172% Avanza Pension 12,904,885 156% Fidel ity Atlant Fonder AB 10,063,124 1.21% INTERNATIONAL Top 10 Institutional Holders 641,914,610 77.41% Others 187,
Slide 12: VEF’s Portfolio
2 VEF’s Portfolio Ver
Slide 13: Mexico, Emerging Europe, India
Mexico Emerging Europe India
Slide 14: Brazil is the most obvious fintech opportunity globally
y Brazil is the most obvious fintech opportunity globally Ver 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 on
Slide 15: % of Brazil portfolio NAV
3% 3% 4% 5% 6% 64% 80% % of Brazil portfolio NAV
Slide 16: Creditas in brief
Focus Secured Consumer Lending Fair value USD 169.0 mln Founded 2012 Investment USD 73.5 mln Key region Brazil Ownership stake 9.8% Share of NAV: 43.6% Year of investment 2017 Creditas in brief Creditas in figures 01 LENDING ACTIVE MILLION GROSS MARGIN Quarterly revenue 2013-2020 – 65% of revenue is
Slide 17: R$ 20,000 R$ 20,000 Customer
• R$ 20,000 R$ 20,000 • Securitization Customer 37.5% p.a. 6.5% p.a. Fixed income vehicle • investor • 21% p.a. (excess spread) 2% p.a. services 3% p.a. (servicing fee) 5% p.a. credit loss 5% up-front fee • Creditas income 100% 20 81.6% 80% 15 60% 10 35.1% 40% 5 20% 0% 0 Q3-18 Q2-17 Q3-17 Q4-17 Q1-1
Slide 18: Q2-18 Q3-18 Q4-18
- 50 100 150 200 250 300 350 1,000 1,200 1,400 - 400 600 800 200 Q1-17 Q1-17 Q2-17 Q2-17 Q3-17 Q3-17 Q4-17 Q4-17 Q1-18 Q1-18 Q2-18 Q2-18 Q3-18 Q3-18 Q4-18 Q4-18 Q1-19 Q1-19 Q2-19 Q2-19 Q3-19 Q3-19 Q4-19 Q4-19 Q1-20 Q1-20 Q2-20 Q2-20 Q3-20 Q3-20 Q4-20 Q4-20 - 20 40 60 80 100 120 - 10 20 (80) (70) (60
Slide 19: Nibo SaaS dashboard
Focus Accounting SaaS provider for SMBs & Accountants Fair value USD 13.6 mln Founded 2012 Investment USD 6.5 mln Key region Brazil Ownership stake 20.1% Share of NAV: 3.5% Year of investment 2017 Nibo SaaS dashboard 01 3 Nibo for Accounting General Ledger accountants software 02 ERP 2 Finance Manag
Slide 20: Nibo market opportunity
Customers 300k 300k Addressable SMEs 10m+ 600k Implied market share 3.0% 50% Max growth potential 34x 2x Valuation / current market cap (USD) 60m 2.9b Valuation vs. Nibo 49x
Slide 21: Brazil, Emerging Europe, India
Brazil Emerging Europe India
Slide 22: Mexico constitutes 15% of VEF’s portfolio
VEF Investments SME Credit and Financial Services ✓ Mexico constitutes 15% of VEF’s portfolio ✓ ✓ ✓ 15% SME and Financial Services
Slide 23: Konfio
Focus Diversified financial services for Mexican SMBs Fair value USD 48.5 mln Founded 2014 Investment USD 27.5 mln Key region Mexico Ownership stake 11.0% Share of NAV: 12.5% Year of investment 2018 CAGR 2017-2020E 01 02
Slide 24: Konfio’s unique lending offer
Konfio’s unique lending offer obstructs the traditional landscape Serving a neglected market segment 10 minutes (100% digital) None Tax ID Any bank’s 3 minutes ~ USD 12,300 Data-driven screening to achieve ideal pricing and servicing Beyond loans Traditional data Proxy of financials Dynamic pricing
Slide 25: Key geographies and portfolio holdings
Ver A Selection of VEF’s Key Geographies, Portfolio Holdings and Outlook for 2020 b Emerging Europe |
Slide 26: Emerging Europe constitutes 9% of VEF’s portfolio
VEF Investments Cross-Border Remittances Emerging Europe constitutes 9% of VEF’s ✓ portfolio ✓ ✓ ✓ ✓ 9% Cross-Border Remittances
Slide 27: TransferGo in figures
Focus Cross Border Remittances Fair value USD 28.6 mln Founded 2012 Investment USD 11.0 mln Key region European Union Ownership stake 15.4% Share of NAV: 7.4% Year of investment 2016 TransferGo in figures 01 OPERATIONAL FINANCIAL #1 +£1.3bn Best rated money transfer Dec 2020 run-rate 02 platform in
Slide 28: TransferGo: The business model in brief
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” 714 733 750 694 642 670 598 613 582 573 60 247 277 314 360 387 104 183 225 145 Frequent low-value money transfers 538 478 428 4
Slide 29: Brazil, Mexico, Emerging Europe
Brazil Mexico Emerging Europe
Slide 30: India constitutes 5% of VEF’s portfolio
VEF Investments Payments ✓ India constitutes 5% of VEF’s portfolio ✓ ✓ ✓ ✓ 5% Digital Payments
Slide 31: Growing digitization of Indian payments
Focus Mobile Payments Fair value USD 17.4 mln Founded 2012 Investment USD 13.0 mln Key region India Ownership stake 9.9% Share of NAV: 4.5% Year of investment 2020 Growing digitization of Indian payments 01 4,500 2,500 4,000 2,000 3,500 02 3,000 1,500 2,500 2,000 1,000 1,500 1,000 500 500 0 0 Aug-16
Slide 32: Investment Opportunities
3 Investment Opportunities Ver
Slide 33: Follow-on investments, pipeline opportunities, buybacks
• Continuously evaluating 3 core opportunities for investment and shareholder value creation • Investment decisions and prioritization driven by expected IRR from each opportunity FOLLOW-ON INVESTMENTS • • • • Pipeline PIPELINE OPPORTUNITIES • • • Hurdle • IRR Buybacks Follow-ons BUYBACKS • •
Slide 34: Investing more in portfolio winners
Investing more in portfolio winners, companies that we know inside-out with high conviction on expected IRRs Strong history of follow-ons augmenting shareholder value creation 45 14 40 12 35 10 30 25 8 20 6 15 4 10 2 5 - - 2015 2016 2017 2018 2019 2020 2021E Follow-on (USD mln) Average # of companie
Slide 35: NAV/share & share price
NAV/share & share price • 4.50 • 4.00 3.50 • 3.00 2.50 • 2.00 • 1.50 1.00 0.50 • - Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 NAV/share (SEK) Share price (SEK)
Slide 36: Sustainability and ESG
Sustainability and ESG Our capital positively impacts the financial inclusion of people and SMEs in EM while staying true to our mandate of maxi SUSTAINABILITY AT VEF + Two dimensions: a) sustainability at VEF as a company and investor and b) sustainability in our portfolio companies + Biggest susta
Slide 37: Outlook for 2021 and beyond
Outlook for 2021 and beyond VEF NAV, a Strong Basis for Continued Growth With a return to a clear growth narrative through 2H20, we are encouraged by all we see in our portfolio and expect this trend to continue into 2021. Creditas, Compounding From a Larger Base The value of VEF’s position in portf
Slide 38: Appendix
Ver 4 Appendix
Slide 39: History of value creation, governance, other holdings
History of value creation Governance structure Other portfolio holdings
Slide 40: Top-down drivers and bottom-up mapping
TOP-DOWN DRIVERS IDENTIFY SEGMENTS OF FOCUS ATTRACTIVE OPPORTUNITIES ALL ABOUT TEAM AND PEOPLE BOTTOM-UP MAPPING
Slide 41: Global fintech lens with trusted local partners
Global fintech lens with trusted local partners VU € F 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
Slide 42: Country-by-country approach to identifying opportunities
DURATION COUNTRY-BY-COUNTRY APPROACH TO IDENTIFYING OPPORTUNITIES 1. INVEST TIME AND BUILD A RAPPORT 2. INVESTMENT COMMITTEE 3. DUE DILIGENCE 4. CLOSING 5. TOTAL INVESTMENT PROCESS
Slide 43: Deal sourcing, governance, other holdings
Deal sourcing Governance structure Other portfolio holdings
Slide 44: Global fintech M&A and recent EM fintech exits
Recent EM Fintech exists Global Fintech M&A IPOs 350 910 920 873 100 0 300 738 900 Company Valuation Offer size Year 800 192 250 700 600 200 128 500 90 150 400 100 76 300 200 50 100 0 0 2016 2017 2018 2019 Volume (USD bln) Number of Deals Fintech funding in 20191 # of transactions Financing Volume (
Slide 45: Exit overview: Russia digital bank
Focus Digital Bank Year of investment 2015 Financial Overview Founded 2007 Amount invested $19M Credit customers 0.0 0.2 0.3 0.5 0.9 1.5 2.0 2.2 2.5 3.0 3.9 5.0 6.6 with balance (M) Key region Russia Proceeds $117M 350 100 300 Investment Overview 250 50 200 329 0 ✓ 150 100 198 -50 140 50 74 75 82 10
Slide 46: Iyzico exit overview
Focus Payments Year of investment 2017 Total Payment Value (TPV) growth 1,600 Founded 2013 Amount invested $11M 1,400 1,200 Key region Turkey Proceeds $35M +518% 1,000 800 600 400 Investment Overview 167 200 0 ✓ -200 ✓ TRY TRY TRY 16.5M TRY 150M TRY 776M 1,966M 3,765M ✓ Iyzico valuation evolution….
Slide 47: Deal sourcing, history of value creation, other holdings
Deal sourcing History of value creation Other portfolio holdings
Slide 48: Board of Directors, Management, Investment Team
Ranjan Tandon Per Brillioth Lars O Grönstedt Alison Goldberg Board Member Board Member Chairman of the Board Board Member • • • • • David Nangle Managing Director and Board Member Board of Directors • Management • Alexis Koumoudos Éire Smith Shashi Mahajan Henrik Stenlund Elisabet Hultén Helena Caan
Slide 49: Deal sourcing, value creation, governance
Deal sourcing History of value creation Governance structure
Slide 50: Russia constitutes 3% of VEF’s portfolio
VEF Listed players Investments Consumer Credit ✓ ✓ Russia constitutes 3% of VEF’s portfolio Payments and Consumer Credit Point of sale financing options for both online and offline customers Digital Bank and Credit* 3% Market cap: $4.2B Digital Banking ✓ ✓ ✓ * VEF was a shareholder in Tinkoff Bank a
Slide 51: Key Merchant Partners
Focus Merchant Payments & Consumer Credit Fair value USD 11.1 mln (excl. convertible note) Founded 2013 Investment USD 8.8 mln Key region Russia, Poland, Romania Ownership stake 23.0% Share of NAV: 2.9% Year of investment 2015 Key Merchant Partners 01 02
Slide 52: % of Brazil portfolio NAV
3% 3% 4% 5% 6% 64% 80% % of Brazil portfolio NAV
Slide 53: Guiabolso
Focus Personal Finance Management Fair value USD 5.4 mln Founded 2012 Investment USD 30.0 mln Key region Brazil Ownership stake 10.9% Share of NAV: 1.4% Year of investment 2017 01 02
Slide 54: FinanZero in figures
Focus Consumer Loan Marketplace Fair value USD 9.9 mln Founded 2016 Investment USD 2.7 mln Key region Brazil Ownership stake 18.0% Share of NAV: 2.6% Year of investment 2016 FinanZero in figures 01 +800k 47 +38% 4.9/5 02 Quarterly revenue 2017-2020 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Q1-
Slide 55: FinanZero: Business model in brief
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 ‒ 1 2 Applications from Highest quality ‒ customers applicants, based on ‒ lenders preferences substantially increase th
Slide 56: Xerpa HR & Payroll Platform
Focus HR & Payroll Platform Fair value USD 5.8 mln Founded 2016 Investment USD 8.5 mln Key region Brazil Ownership stake 16.0% Share of NAV: 1.5% Year of investment 2019 01 02
Slide 57: Magnetis Digital Investment Advisor
Focus Digital Investment Advisor Fair value USD 8.3 mln Founded 2015 Investment USD 5.7 mln Key region Brazil Ownership stake 17.5% Share of NAV: 2.1% Year of investment 2017 01 02 1 Build a portfolio 2 Invest in a few tailored to you clicks 3 Track your progress and invest more
Slide 58: Africa constitutes 3% of VEF’s portfolio
VEF VEF Investments Investment Digital Consumer Financial Services ✓ Africa constitutes 3% of VEF’s portfolio ✓ ✓ ✓ 3% Mobile Money Marketplace Provides inclusive financial services to unbanked consumers and SMEs
Slide 59: JUMO Mobile Money Marketplace
Focus Mobile Money Marketplace Fair value USD 9.5 mln Founded 2014 Investment USD 14.6 mln Key region Pan-Africa, Asia Ownership stake 6.8% Share of NAV: 2.5% Year of investment 2015 01 Financial Service Providers Barclays Letshego Ecobank JUMO Capital 02 JUMO Mobile Money Marketplace MTN Airtel Tig
Slide 60: Pakistan constitutes 2% of VEF’s portfolio
VEF Investments Mobile Wallet and Credit ✓ Pakistan constitutes 2% of VEF’s portfolio ✓ ✓ 2% Mobile Wallet and Credit Serving the unbanked consumers and merchants alike
Slide 61: FINJA Digital Lending & Payments
Focus Digital Lending & Payments Fair value USD 6.7 mln Founded 2016 Investment USD 2.9 mln Key region Pakistan Ownership stake 22.8% Share of NAV: 1.7% Year of investment 2016 01 02
Slide 62: NAV valuation approach
NAV valuation approach VU € F Methodology and process VEF formally revalues its portfolio and sets a fresh NAV on a quarterly basis, in tandem with and signed off by its auditors, PwC. While the inputs of our cash and any listed holdings is clear, for all private company holdings, the fair value of
Slide 63: Thank you
Ver Thank you