Vef Ab · OMXSTO:VEFAB
Vef Ab — Investor Presentation (April 2021)
71 slides from Vef Ab's investor presentation, April 2021
Slide 1: Investor Presentation April 2021
Investor Presentation April 2021 The emerging market fintech investor
Slide 2: Summary
Summary VEFr NAV mark continues its upward journey reaching fresh highs NAV per share rose to a fresh all-time high of SEK 4.24 and NAV to USD 403.4 min, driven by continued strong performance across the portfolio. Strong start to year from VEF key holdings — Creditas and Konfio 2021 has kicked off
Slide 3: Introduction to VEF — The Emerging Market Fintech Investor
1 Introduction to VEF — The Emerging Market Fintech Investor VEFr
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 Targeted investment approach with a clear mandate ... © oe SECTOR We target all lines of financial services inclusive of payments, credit and savings/investments. The “right” target sector is very market- dependent. GEOGRAPHY Within emerg
Slide 6: 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 — 59% Mexico — 17% > Mexico Emerging Europe —- 7% Ccreditas G GuiabolsoMbe magnetis @ VEF investments *% of 1Q21 VEF NAV (excl. cash) India OJUSPAY VEFr India -
Slide 7: Portfolio commentary
Portfolio commentary Portfolio evolution through 1Q21 Portfolio focus & concentration Cash position Pipeline We have 14 holdings as of 1Q21, diversified by geography, business type and stage of development. In 1Q21, we made 2 new investments: USD 7 min in Rupeek, India’s fastest growing asset-backed
Slide 8: Current investments and successful exits
Current investments (57% of NAV) in 2 of LatAm’s fintech champions Successful exits from fintech leaders in Russia & Turkey Recent investment in India’s fastest growing tech start-up*
Slide 9: VEF portfolio summary
VEF portfolio summary Ver Ccredites Brazil Secured Lending Platform Dec-17 9.8% 169.0 « konfio Mexico Diversified FS for Mexican SMBs Juns 1.0% 27.5 61.0 Emerging Europe Cross-Border Remittances Jun-16 18.4% 1.0 25.9 OJUSPAY India Mobile Payments Platform Apr-20 9.9% 13.0 18.7 niba Brazil Accounting
Slide 10: NAV/share & share price development
NAV/share & share price development 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 NAV/Share (SEK) Share Price (SEK) Realized returns Unrealized returns
Slide 11: NAV/share & share price development; Premium/(Discount) to NAV
NAV/share & share price development Premium/(Discount) to NAV1 4.5 10% 4.0 0% 3.5 -10% 3.0 -20% 2.5 -30% 2.0 -40% 1.5 1.0 -50% NAV/Share (SEK) Share Price (SEK) Premium/(Discount) to NAV Key figures
Slide 12: Top institutional holders
176,832,109 21.3% 174,398,165 21.0% 85,857,094 10.4% 71,874,245 8.7% Fidelity Investments (FMR) 53,846,358 6.5% Fidelity International (FIL) 26,254,137 3.2% Svenska Handelsbanken AB for 15,343,00 2% GADD & Cie S.A. 13,280,957 16% Ruane, Cunniff & Goldfarb! Libra Fund! Wellington Management! Swedbank
Slide 13: Strong team with significant EM/fintech experience
Strong team with significant EM/fintech experience David Nangle Managing Director Experience: 20+ years EM FS Renaissance Capital Head of Research and Financials Sector Research * ING Barings Head of EMEA Financials Research * Education: Degree in B. Comm Intl. (French) from University College Dubli
Slide 14: VEF’s Portfolio
2 VEF’s Portfolio VEFr
Slide 15: Mexico Emerging Europe India
Mexico Emerging Europe India
Slide 16: 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 17: % of total portfolio NAV
47.1% 59% 41.8% 3.3% 1.2% 1.2% 2.2% 3.0% % of total portfolio NAV
Slide 18: Creditas in brief
Focus Asset Focused Ecosystem Fair value USD 169.0 mln Founded 2012 Investment USD 73.4 mln Key region Brazil Ownership stake 9.8% Share of NAV: 41.8% Year of investment 2017 Creditas in brief Creditas in figures 01 LENDING ACTIVE MILLION GROSS MARGIN Quarterly revenue 2013-2021 – 65% of revenue is
Slide 19: Creditas customer loan economics
• 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 80% 15 60% 10 40% 5 20% 0% 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-1
Slide 20: Creditas quarterly charts
- 50 100 150 200 250 300 350 400 450 1,000 1,200 1,400 1,600 1,800 - 200 400 600 800 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 Q1-21 Q1-21 - 40 60 80
Slide 21: Brazil Emerging Europe India
Brazil Emerging Europe India
Slide 22: Mexico constitutes 17% of VEF’s portfolio
VEF Investments SME Credit and Financial Services • SME and Financial Services Mexico constitutes 17% of VEF’s portfolio • • • 17% Employee Wellness and Benefits • • Employee Wellness • •
Slide 23: Konfio: diversified financial services for Mexican SMBs
Focus Diversified financial services for Mexican SMBs Fair value USD 61.0 mln Founded 2014 Investment USD 27.5 mln Key region Mexico Ownership stake 11.0% Share of NAV: 15.1% 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: Minu: salary on demand
Focus Salary on demand Fair value USD 0.5 mln Founded 2019 Investment USD 0.5 mln Key region Mexico Ownership stake 1.2% Share of NAV: 0.1% Year of investment 2021 01 02
Slide 26: A Selection of VEF’s Key Geographies and Portfolio Holdings
2 A Selection of VEF’s Key Geographies and Portfolio Holdings C. Emerging Europe VEFr
Slide 27: Emerging Europe constitutes 7% of VEF’s portfolio
VEF Investments Cross-Border Remittances Emerging Europe constitutes 7% of VEF’s ✓ portfolio ✓ ✓ ✓ ✓ 7% Cross-Border Remittances
Slide 28: TransferGo in figures
Focus Cross Border Remittances Fair value USD 25.9 mln Founded 2012 Investment USD 11.0 mln Key region Europe Ownership stake 15.4% Share of NAV: 6.4% Year of investment 2016 TransferGo in figures 01 OPERATIONAL FINANCIAL #1 +£1.3bn Best rated money transfer Dec 2020 run-rate 02 platform in the worl
Slide 29: 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 30: Brazil Mexico Emerging Europe
Brazil Mexico Emerging Europe
Slide 31: India constitutes 7% of VEF’s portfolio
VEF Investments Payments • • Payments India constitutes 7% of VEF’s portfolio • • • 7% Asset-backed (Gold) Lending • Asset-backed lending • •
Slide 32: Growing digitization of Indian payments
Focus Mobile Payments Fair value USD 18.7 mln Founded 2012 Investment USD 13.0 mln Key region India Ownership stake 9.9% Share of NAV: 4.6% Year of investment 2020 Growing digitization of Indian payments 01 5,500 3,000 5,000 4,500 2,500 02 4,000 2,000 3,500 3,000 1,500 2,500 2,000 1,000 1,500 1,000
Slide 33: Indian gold loan industry and Rupeek in figures
Focus Secured Lending Platform Fair value USD 7.0 mln Founded 2015 Investment USD 7.0 mln Key region India Ownership stake 1.4% Share of NAV: 1.7% Year of investment 2021 Indian gold loan industry and Rupeek in figures 01 INDUSTRY RUPEEK 02 +$1.5tn #1 Value of gold held by Indian Rupeek is India’s f
Slide 34: Investment Opportunities
Investment Opportunities VEFr
Slide 35: 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 36: Investing more in portfolio winners
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 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 companies in
Slide 37: Deal flow and pipeline
VEFr 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 deep fintech expertise, global lens on financial services and
Slide 38: Outlook for 2021 and beyond
Outlook for 2021 and beyond Ver NAV continues to reach new highs and a strong basis for continued growth YTD 2021 has started where 2020 left off and we remain 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
Slide 39: ESG
VEFr
Slide 40: Sustainability and ESG
Sustainability and ESG VEF core values Stewardship We are an active and responsible shareholder and we take corporate governance very seriously, both with regards to how we conduct our business and how portfolio companies conduct theirs. Integrity We are transparent, open, honest, fair and ethical t
Slide 41: Responsible investment and shareholding (1/2)
Responsible investment and shareholding (1/2) process to create sustainable and long-term value for our investors VEF’S sustainability strategy An investment decision-making process driven by a strong belief in: (i) sustainability as a fundamental part of business (2) the power of active shareholdin
Slide 42: Responsible investment and shareholding (2/2)
Responsible investment and shareholding (2/2) Ver Our capital positively act the access to fair and affordable financial services while staying true to our mandate of maximizing re Financial inclusion * Supporter of UN Sustainable Development Goals FINANCIAL INCLUSION NO i H POVERTY + Access to fina
Slide 43: Fintech for Financial Inclusion
Fintech for Financial Inclusion Ver Our capital positively act the access to fair and affordable financial services while staying true to our mandate of maximizing re JUM© - A VEF benchmark for financial inclusion The majority of VEF portfolio companies play an important role in ~ > ” oo. . ; the fu
Slide 44: Appendix
Appendix
Slide 45: History of value creation; Governance structure; Other portfolio holdings
History of value creation Governance structure Other portfolio holdings
Slide 46: 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 47: 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 48: Investment process and duration
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 49: Deal sourcing; Governance structure; Other portfolio holdings
Deal sourcing Governance structure Other portfolio holdings
Slide 50: Fintech M&A, EM exits and funding
Recent EM Fintech exits Evolution of Global Fintech M&A IPOs 993 969 $300 905 916 1,000 872 Company Valuation Offer size Year $250 900 $200 800 $150 276 700 $100 234 600 130 $50 75 91 500 400 2016 2017 2018 2019 2020 Global Fintech M&A Volume (US$ bn) Deal count Fintech funding in 20201 M&As # of tr
Slide 51: Exit overview: Tinkoff
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 52: Exit overview: Iyzico
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 53: Deal sourcing; History of value creation; Other portfolio holdings
Deal sourcing History of value creation Other portfolio holdings
Slide 54: Diverse engaged Board with broad-based value-added experience
Diverse engaged Board with broad-based value-added experience Lars O Grénstedt Chairman of the Board Experience: CEO of Handelsbanken between 2001-2006, and Chairman of the Board of Handelsbanken between 2006-2008 Education: BA in languages and literature from Stockholm University, and an MBA from S
Slide 55: Deal sourcing; History of value creation; Governance structure
Deal sourcing History of value creation Governance structure
Slide 56: Russia constitutes 4% of VEF’s portfolio
VEF Listed players Investments Consumer Credit • • Russia constitutes 4% of VEF’s portfolio Payments and Consumer Credit Point of sale financing options for both online and offline customers Digital Bank and Credit* 4% Market cap: $4.2B Digital Banking • • • * VEF was a shareholder in Tinkoff Bank a
Slide 57: Key Merchant Partners
Focus Merchant Payments & Consumer Credit Fair value USD 13.1 mln Founded 2013 Investment USD 6.7 mln Key region Russia, Poland, Romania Ownership stake 23.0% Share of NAV: 3.3% Year of investment 2015 Key Merchant Partners 01 02
Slide 58: % of total portfolio NAV
47.1% 59% 41.8% 3.3% 1.2% 1.2% 2.2% 3.0% % of total portfolio NAV
Slide 59: Nibo SaaS dashboard
Focus Accounting SaaS provider for SMBs & Accountants Fair value USD 13.2 mln Founded 2012 Investment USD 6.5 mln Key region Brazil Ownership stake 20.1% Share of NAV: 3.3% Year of investment 2017 Nibo SaaS dashboard 01 3 Nibo for Accounting General Ledger accountants software 02 ERP 2 Finance Manag
Slide 60: Nibo customers and market share
Customers 313k 300k Addressable SMEs 10m+ 600k Implied market share 3.1% 50% Max growth potential 32x 2x Valuation / current market cap (USD) 59m 2.7b* Valuation vs. Nibo 45x
Slide 61: Guiabolso: personal finance management
Focus Personal Finance Management Fair value USD 4.8 mln Founded 2012 Investment USD 30.0 mln Key region Brazil Ownership stake 10.9% Share of NAV: 1.2% Year of investment 2017 01 02
Slide 62: FinanZero in figures
Focus Consumer Loan Marketplace Fair value USD 12.3 mln Founded 2016 Investment USD 4.2 mln Key region Brazil Ownership stake 18.0% Share of NAV: 3.0% 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 63: 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 64: Xerpa: HR & payroll platform
Focus HR & Payroll Platform Fair value USD 4.9 mln Founded 2016 Investment USD 8.5 mln Key region Brazil Ownership stake 16.0% Share of NAV: 1.2% Year of investment 2019 01 02
Slide 65: Magnetis: digital investment advisor
Focus Digital Investment Advisor Fair value USD 8.9 mln Founded 2015 Investment USD 5.7 mln Key region Brazil Ownership stake 17.5% Share of NAV: 2.2% 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 66: Africa constitutes 4% of VEF’s portfolio
VEF VEF Investments Investment Digital Consumer Financial Services • Africa constitutes 4% of VEF’s portfolio • • • 4% Mobile Money Marketplace Provides inclusive financial services to unbanked consumers and SMEs
Slide 67: JUMO: mobile money marketplace
Focus Mobile Money Marketplace Fair value USD 13.1 mln Founded 2014 Investment USD 14.6 mln Key region Pan-Africa, Asia Ownership stake 6.8% Share of NAV: 3.2% Year of investment 2015 01 Financial Service Providers Barclays Letshego Ecobank JUMO Capital 02 JUMO Mobile Money Marketplace MTN Airtel Ti
Slide 68: 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 69: Finja: digital lending & payments
Focus Digital Lending & Payments Fair value USD 6.7 mln Founded 2016 Investment USD 3.2 mln Key region Pakistan Ownership stake 22.8% Share of NAV: 1.7% Year of investment 2016 01 02
Slide 70: 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 71: The emerging market fintech investor
YEE rrenyen The emerging market fintech investor