Vef Ab · OMXSTO:VEFAB
Vef Ab — Investor Presentation (September 2021)
77 slides from Vef Ab's investor presentation, September 2021
Slide 1: Investor Presentation September 2021
Investor Presentation September 2021 The emerging market fintech investor
Slide 2: Summary of 1H21 and recent highlights
Summary of 1H21 and recent highlights Ver Armed with fresh capital after a successful fundraise of c. $102 min in Aug-21 In Aug’21, we successfully raised SEK 885 min (c. $102 min). We look forward to deploying fresh capital and drive value creation for all our shareholders over the coming years. Bu
Slide 3: Introduction to VEF — The Emerging Market Fintech Investor
1 Introduction to VEF — The Emerging Market Fintech Investor VEFr
Slide 4: 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 + Extensive Emerging Markets investing experience * David Nangle, CEO: 20+ years EM financial services * Alexis Koumoudos, Inve
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 VEFr VEF has backed entrepreneurs across the emerging world since inception in 2015 Emerging Europe -7% Brazil - 54% v Africa - 4% Mexico — 20% V Mexico India Russia — 4% India - 8% OJUSPAY v Brazil Ccreditas Pakistan 2% nib mognetis akistan %o X
Slide 7: Portfolio commentary
Portfolio commentary VU € F VEF portfolio NAV as of Sep 8 2021 We have 15 holdings as of 2Q21, diversified by geography, business type and stage of development. USD 503 6 n -6 min Portfolio * In 2Q21, we made one new investment: USD 0.9 min in evolution Abhi, a financial wellness company for employe
Slide 8: Current investments and successful exits
Current investments in 2 of LatAm’s fintech champions Successful exits from fintech leaders in Russia & Turkey Recent investments in India’s fastest growing tech start-up* and a leading digital payments company
Slide 9: NAV/share & share price development
NAV/share & share price development Premium/(Discount) to NAV1 6.0 30% 20% 5.0 10% 4.0 0% -10% 3.0 -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 Sep-21 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec
Slide 10: Exit overview: Tinkoff and iyzico
Focus Digital Bank Year of investment 2015 Focus Payments Year of investment 2017 Founded 2007 Amount invested $19M Founded 2013 Amount invested $11M Key region Russia Proceeds $117M Key region Turkey Proceeds $35M Investment overview Investment overview • • • • • • Exit Overview Exit Overview +65%
Slide 11: Top institutional holders
Ruane, Cunniff & Goldfarb! 217,832,109 20: _— Libra Func! 124,198,165 = ah Robur Fidelity Investments (FMR) 94,829,168 Swedbank Robur Funds 90,164,245 Ruane 7 Wellington Management’ 85,857,094 Cunniff & Fidelity International (FIL) 26,267,586 Goldfarb Avanza Pension 13,445,813 GADD & Cie S.A. 13,280
Slide 12: 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 13: VEF's Portfolio
2 VEF’s Portfolio VEFr
Slide 14: Mexico Emerging Europe India
Mexico Emerging Europe India
Slide 15: 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 16: Brazil: share of portfolio NAV
of total portfolio NAV % excl. cash
Slide 17: Creditas
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: 33.5% Year of investment 2017 01 LENDING ACTIVE MILLION GROSS MARGIN 02 “In early March, due to the pandemic, we preferred to be cautious, as we did not kn
Slide 18: Creditas' solid business model reflected in financial metrics
Creditas Cceditas VEF Creditas’ solid business model is reflected well in its financial metrics 2,500 cAGR 180 ™Recurring revenue —_™ Upfront revenue 470 YTD 21 YoY 420% 2,015 160 000 CAGR 124 ~ cyYi7-20 142% 140 19% 4,545 YTD 21 YoY 139% 404 4500 4286] 120 CYt7-20 139% Credit 4,043 *0 . ° Revenue P
Slide 19: Value creation continues with Creditas leading the way
Post our 4Q20 capital raise, value creation continues with Creditas leading the way Ver With a loan book now standing at BRL 1.5b and significant strides in the ibuyer space YTD, we see considerable upside in Creditas in the coming months i ee Gcredites pebcredi NL, a | | Creditas $255m Creditas acq
Slide 20: Brazil Emerging Europe India
Brazil Emerging Europe India
Slide 21: Mexico constitutes 20% of VEF's portfolio
VEF Investments SME Credit and Financial Services • SME and Financial Services Mexico constitutes 20% of VEF’s portfolio • • • Employee Wellness and Benefits • • Employee Wellness • •
Slide 22: Konfio
Focus Diversified financial services for Mexican SMBs Fair value USD 75.4 mln Founded 2014 Investment USD 47.3 mln Key region Mexico Ownership stake 10.6% Share of NAV: 15.0% Year of investment 2018 CAGR 2017-2020E 01 02
Slide 23: Konfio: data-driven financial services
Konfio <x konfio JEF Data-driven financial services Boosting SMEs growth and productivity Three-Pillar Strategy Traction Business Evolution : > (~ LT Reven (Mn of MX$) and Data Sets (Milli 2. f Lending: \ / \ 5 wes (Mn of MXx$) anc (Miltions) J @ Unique non-collateralized, fully digital, agile worki
Slide 24: Konfio product suite expansion & value creation
Konfio product suite expansion & value creation VEFr Rolling out a three-pillar strategy of lending, SaaS and payments to serve Mexican SMEs ee Xkonfio gestinix konfio Konfio acquires ERP and accounting software company Gestionix in further expansion of Konfio’s SaaS. tools Evolution of VEF’s stake
Slide 25: 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 26: 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 27: TransferGo in figures
Focus Cross Border Remittances Fair value USD 27.8 mln Founded 2012 Investment USD 13.9 mln Key region Europe Ownership stake 14.3% Share of NAV: 5.5% Year of investment 2016 TransferGo in figures 01 OPERATIONAL FINANCIAL #1 +£1.3bn Best rated money transfer May’21 run-rate transaction 02 platform i
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: Wise's listing serves as a benchmark for TransferGo
Wise’s recent blockbuster listing on LSE serves as a benchmark for TransferGo Ver Wise is a now a listed comp in the digital money transfer space with a market cap of GBP 13.5b and trading at 14.1x EV/NTM revenue = = 66 eee 7wise Valuation growth in the private markets have continued since the direc
Slide 30: Brazil Mexico Emerging Europe
Brazil Mexico Emerging Europe
Slide 31: India constitutes 8% of VEF's portfolio
VEF Investments Payments • • Payments India constitutes 8% of VEF’s portfolio • • • 8% Asset-backed (gold) lending • Asset-backed lending • •
Slide 32: Juspay in figures
Focus Mobile Payments Fair value USD 24.7 mln Founded 2012 Investment USD 13.0 mln Key region India Ownership stake 9.9% Share of NAV: 4.9% Year of investment 2020 Juspay in figures 01 ~$50 bln 80% Annualized GMV (Jun’21) Market share of Juspay clients in digital payments 02 ~7.3 mln 250 mln+ Averag
Slide 33: UPI growth and Juspay scale versus peers
UPI is fast becoming the most favored method of digital payment…. Juspay has achieved ~1.5x scale compared to next 4 peers combined 6,000 3,000 5,500 5,000 2,500 4,500 4,000 2,000 3,500 3,000 1,500 2,500 2,000 1,000 1,500 1,000 500 500 0 0 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19 Jun-
Slide 34: 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: 1.4% 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 35: Blackbuck in figures
Focus Online trucking platform Fair value USD 10 mln Founded 2015 Investment USD 10 mln Key region India Ownership stake 1.0% Share of NAV: 2.0% Year of investment 2021 Blackbuck in figures 01 1.2m+ #1 Number of trucks on the India’s largest trucking 02 platform network 700k+ 15m+ Number of truckers
Slide 36: Investment Opportunities
Investment Opportunities VEFr
Slide 37: 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 OPPORTUNITIES • • • • BUYBACKS • •
Slide 38: 45 16
45 16 40 14 35 12 30 10 25 8 20 6 15 4 10 5 2 0 0
Slide 39: 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 40: ESG: Redomestication and new board member
ESG: Redomestication and new board member Redomestication from Bermuda to Sweden complete Welcoming new board member, Hanna Loikkanen The redomestication of our parent company from Bermuda to Sweden was completed at the end of June. Following the domicile change, VEF shares now trade under the ticke
Slide 41: VEF investment case
VEF investment case VEFr VEF provides unique access to one of the most exciting value creation spaces within emerging markets. 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. If
Slide 42: ESG
VEFr
Slide 43: VEF core values – the foundation
Portfolio companies driving impact Sustainability principles and tailored focus areas Broad and robust policy package VEF core values – the foundation
Slide 44: Sustainability strategy
Sustainability strategy VEF’s sustainability strategy An investment decision-making process driven by a strong belief in: VEFr Sustainability at VEF Two dimensions of sustainability at VEF: 1) Sustainability as a fundamental part of business Power of active shareholding, to ensure strong governance
Slide 45: Investment process backed by a thorough ESG diligence
Investment process backed by a thorough ESG diligence an active and responsible shareholder, believing in the fundamental importance of integr: process to create sustainable and lon, Investment From sourcing to investment decision process * Discussed at an early stage * Fundamentally believe “If it
Slide 46: Supporting the SDGs - social impact
Supporting the SDGs -— social impact ively impact the access to fair and affordable financial services while sta) Financial inclusion * Supporter of UN Sustainable Development Goals + Access to financial services for people and small businesses is an important part in achieving the SDGs, eg. reduce
Slide 47: Fintech for financial inclusion — VEF portfolio (1/2)
Fintech for financial inclusion — VEF portfolio (1/2) Ver Most VEF portfolio companies play an important role in the furthering of financial inclusion, by providing: a) services to underserved consumers and SMEs; or b) access to financial services at fair and affordable terms. JU M_ A VEF benchmark
Slide 48: Fintech for financial inclusion — VEF portfolio (2/2)
Fintech for financial inclusion — VEF portfolio (2/2) Ver Most VEF portfolio companies play an important role in the furthering of financial inclusion, by providing: a) services to underserved consumers and SMEs; or b) access to financial services at fair and affordable terms. FIINGIN Serving unders
Slide 49: Appendix
Appendix
Slide 50: History of value creation, Governance structure, Other portfolio holdings
History of value creation Governance structure Other portfolio holdings
Slide 51: 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 52: 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 53: 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 54: Deal sourcing, Governance structure, Other portfolio holdings
Deal sourcing Governance structure Other portfolio holdings
Slide 55: Evolution of Global Fintech M&A and recent EM fintech 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 $150 700 234 241 $100 600 $50 130 136 500 75 91 400 2016 2017 2018 2019 2020 1H 21 Global Fintech M&A Volume (US$ bn) Deal count Record fintech funding
Slide 56: Deal sourcing, History of value creation, Other portfolio holdings
Deal sourcing History of value creation Other portfolio holdings
Slide 57: Diverse engaged Board with broad-based 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 Stockholm School of Economics Diverse engaged Board with broad-
Slide 58: Deal sourcing, History of value creation, Governance structure
Deal sourcing History of value creation Governance structure
Slide 59: VEF portfolio summary
VEF portfolio summary Ver Ccredites Brazil Asset focused Ecosystem Dec-17 9.8% 169.0 « konfio Mexico Diversified FS for Mexican SMBs Juns 10.6% 47.3 75.4 Emerging Europe Cross-Border Remittances Jun-16 14.3% 13.9 27.8 (9) JUSPAY India Mobile Payments Platform Apr-20 9.9% 13.0 247 JUMOQ Africa Mobile
Slide 60: 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: $17.0B Digital Banking • • • *VEF was a shareholder in Tinkoff Bank a
Slide 61: Key Merchant Partners
Focus Merchant Payments & Consumer Credit Fair value USD 15.7 mln Founded 2013 Investment USD 6.7 mln Key region Russia, Poland, Romania Ownership stake 23.0% Share of NAV: 3.1% Year of investment 2015 Key Merchant Partners 01 02
Slide 62: Share of total portfolio NAV excl. cash
of total portfolio NAV % excl. cash
Slide 63: Nibo SaaS dashboard
Focus Accounting SaaS provider for SMEs & Accountants Fair value USD 13.4 mln Founded 2012 Investment USD 6.5 mln Key region Brazil Ownership stake 20.1% Share of NAV: 2.7% Year of investment 2017 Nibo SaaS dashboard 01 3 Nibo for Accounting General Ledger accountants software 02 ERP 2 Finance Manag
Slide 64: Nibo vs Fortnox — A VEF investment case
Nibo VEFr Nibo vs Fortnox — A VEF investment case Brazil v/s. Sweden Brazil’s scale relative to Sweden GDP $1,434b $53ib 3x Population 210m 10m 20x Total addressable SMEs 10m 1.2m 5x Total addressable accountancies 80,000 23,500 3x Nibo v/s. Fortnox nibo FORTNOX Total SME customers 327,000 385,000 I
Slide 65: FinanZero in figures
Focus Consumer Loan Marketplace Fair value USD 12.6 mln Founded 2016 Investment USD 5.7 mln Key region Brazil Ownership stake 18.0% Share of NAV: 2.5% Year of investment 2016 FinanZero in figures 01 +2.0m 52 +38% 4.9/5 02 Quarterly revenue 2017-2021
Slide 66: 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 67: Digital Investment Advisor
Focus Digital Investment Advisor Fair value USD 10.5 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 68: HR & Payroll Platform
Focus HR & Payroll Platform Fair value USD 4.8 mln Founded 2016 Investment USD 8.5 mln Key region Brazil Ownership stake 16.0% Share of NAV: 0.9% Year of investment 2019 01 02
Slide 69: Mexico constitutes 20% of VEF's portfolio
VEF Investments SME Credit and Financial Services • SME and Financial Services Mexico constitutes 20% of VEF’s portfolio • • • 20% Employee Wellness and Benefits • • Employee Wellness • •
Slide 70: Salary on demand (Mexico)
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 71: 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 72: Mobile Money Marketplace
Focus Mobile Money Marketplace Fair value USD 16.3 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 73: 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 unbanked consumers and merchants alike
Slide 74: Digital Lending & Payments
Focus Digital Lending & Payments Fair value USD 7.4 mln Founded 2016 Investment USD 3.2 mln Key region Pakistan Ownership stake 22.8% Share of NAV: 1.5% Year of investment 2016 01 02
Slide 75: Salary on Demand (Pakistan)
Focus Salary on Demand Fair value USD 0.9 mln Founded 2021 Investment USD 0.9 mln Key region Pakistan Ownership stake 15.0% Share of NAV: 0.2% Year of investment 2021 01 02
Slide 76: 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 77: Thank you
Thank you