Kinnevik Ab Class A · OMXSTO:KINV_A
Kinnevik Ab Class A — Investor Day (October 2024)
64 slides from Kinnevik Ab Class A's investor day presentation, Oct 23, 2024
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Slide 2: Disclaimer
CAPITAL MARKETS DAY 2024 Disclaimer This presentation contains forward-looking statements. Such statements are not historical facts but, rather, represent Kinnevik's future expectations. Kinnevik believes that the expectations reflected in these forward-looking statements are based on reasonable ass
Slide 3: Agenda
Agenda 9.30 Kinnevik as a Leading Growth Investor ▪ Georgi Ganev, CEO & Samuel Sjöström, CFO 10.15 The Heart of Healthcare & The Rise of Mental Wellness ▪ Christian Scherrer, Senior Investment Director ▪ Adam Chekroud, Spring Health Co-Founder 10.45 Break 11.00 Smart Care, Smarter Drugs: Value-Based
Slide 4: Today you will hear from the Kinnevik leadership team and founders
2024 CAPITAL MARKETS DAY Today you will hear from the Kinnevik leadership team and the founders and leaders of our core companies and some of our selected newer ventures Georgi Ganev Samuel Sjöström Torun Litzén Adam Chekroud Toyin Ajayi Viswa Colluru Matthijs Welle Chief Executive Officer Chief Fin
Slide 5: Send your questions to the Q&A
Send your questions to the Q&A: cmd@kinnevik.com Connect to our Wi-Fi: Network Name kinnevikcmd Password kinnevik24 5
Slide 6: Capital Markets Day October 2024
Capital Markets Day 23 October 2024 Presented by Georgi Ganev, CEO & Samuel Sjöström, CFO 6
Slide 7: We are on a mission to redefine industries and create new categories
We are on a mission to redefine industries and create new categories. We are an entrepreneurial investor, active owner, and operational partner to challenger companies in Europe and the US. With a permanent capital structure, we invest to rapidly scale tomorrow’s market leaders within healthcare, so
Slide 8: Transformation of Kinnevik complete; portfolio reflects investment strategy
2024 CAPITAL MARKETS DAY With the transformation of Kinnevik complete, our portfolio now fully reflects the investment strategy we set in motion in early 2018 and have executed on since Transformation to Growth % Growth Investments of Portfolio Value and Timing of Legacy Company Exits 100% 100% 90%
Slide 9: Reshaped portfolio while distributing more than 115 percent of market cap
2024 CAPITAL MARKETS DAY We have reshaped our portfolio while creating value and distributing more than 115 percent of market cap to shareholders – now Kinnevik is ready to grow again Net Asset Value Turnover Key Components, Q4 2017 to Q3 2024, SEKbn 126.1 90.6 87.8 (74.9) 12.2 +35.7 26.1 (12.9) +13
Slide 10: Returns since the start of 2018
2024 CAPITAL MARKETS DAY Missteps in food and fintech have dragged down our otherwise sector-leading returns, leading us to refocus on our high-performing strategies that have produced our core companies of today Returns Since the Start of 2018 TSR and IRRs by NAV Category, Q4 ’17 to Q3 ’24, Annuali
Slide 11: Kinnevik today: concentrated portfolio, strong financial position, three focus areas
2024 CAPITAL MARKETS DAY Kinnevik today is an 88-year-young investment firm with a concentrated portfolio of high-potential companies, a strong financial position, and three distinct focus areas Kinnevik Today 37.4bn 12.2bn 16% Health & Bio NAV (SEK) Net Cash (SEK) 37% Software Climate Tech Platform
Slide 12: Our focus areas: Health & Bio, Software, Climate Tech
2024 CAPITAL MARKETS DAY Our focus areas represent 76 percent of our portfolio by value and 84 percent of our investments since the start of 2023, each covered by one dedicated Investment Director Focus Areas Health & Bio Software Climate Tech 37% of Portfolio 28% of Portfolio 10% of Portfolio 32% I
Slide 13: Core companies
2024 CAPITAL MARKETS DAY Our core companies make up half of our portfolio and are the engine of future value creation Core Companies Q3 2021 Q2 2020 Q2 2018 Q4 2018 Q4 2022 1st Investment 1st Investment 1st Investment 1st Investment 1st Investment Provides employers with the Tech-driven, value-based
Slide 14: Our core companies would return the fund
2024 CAPITAL MARKETS DAY Our core companies would “return the fund” for the typical venture capital fund, but we can hold on and have them compound value in our portfolio for years to come Core Companies >40% Growth and Demonstrating EBITDA Profitability Continued Focus on Sustainable Growth, Kinnev
Slide 15: Selected ventures
2024 CAPITAL MARKETS DAY We expect big outcomes from our selected ventures currently making up 15 percent of the portfolio, but further investment will depend on their progress and likelihood of success Selected Ventures Q1 2022 Q3 2023 Q4 2022 Q3 2022 Q2 2023 Q4 2022 1st Investment 1st Investment 1
Slide 16: European holding company model applied to venture and growth capital
2024 CAPITAL MARKETS DAY We apply the active, resilient and long-term European holding company model on an impatient and short-term venture and growth capital ecosystem – marrying the best features from both 16
Slide 17: Resilient, ambitious, unrestricted partnership model
We help build remarkable growth companies by applying a resilient, ambitious and unrestricted partnership model in an impatient, short-term and self-constrained venture and growth capital ecosystem.
Slide 18: Our competitive advantages determine our strategy
2024 CAPITAL MARKETS DAY Our competitive advantages are what determine our strategy, and we have learned how to maximize their strengths Resilient Ambitious Unrestricted Partnership We encourage founders to think long- We back bold ideas that redefine With no capital allocation restrictions We think
Slide 19: The purge of venture capital has revealed our competitive advantages
2024 CAPITAL MARKETS DAY The purge of venture capital has revealed the strength of our competitive advantages, and with markets now stabilized we will see a ‘coiled spring’-effect on our development US Venture Capital Deal Volume, Rolling LTM BVP Cloud Index Constituents, Median EV/NTM R US Venture
Slide 20: Forward-leaning funding rounds at balanced valuations
2024 CAPITAL MARKETS DAY We have led forward-leaning funding rounds in our best performing companies at balanced valuations, and have supported our companies to become less (or non-)reliant on markets US Venture Capital Deal Volume, Rolling LTM ▪ Our core companies are all profitable or funded to br
Slide 21: At the forefront in reflecting the new valuation reality
2024 CAPITAL MARKETS DAY We have been at the forefront of our industry in reflecting the new (old) valuation reality, and have seen re-pricing transactions in each of our core companies during 2024 BVP Cloud Index Constituents, Median EV/NTM R ▪ 60-80% of 2021-22 unicorns have not raised new capital
Slide 22: Secondary acquisitions in core companies at attractive valuations
2024 CAPITAL MARKETS DAY We have used other investors’ need for liquidity to actively pursue secondary acquisitions in our core companies at attractive and NAV-confirming valuations US Venture Capital Exits, Rolling LTM ▪ We lack fund durations forcing us to exit companies in a 20-year trough ▪ SEK
Slide 23: Jan Stenbeck 1942-2002
Jan Stenbeck 1942-2002
Slide 24: Growth-profitability profile of our portfolio has been derisked
2024 CAPITAL MARKETS DAY Through solid performance, capital re-allocation, and a principled mark-to-market approach, the average growth-profitability profile of our portfolio has become meaningfully derisked Our Companies Financial Profile Development, Q4 ‘21 to Q3 ‘24 160% 140% Core Companies 120%
Slide 25: Tapered follow-on investments into non-core companies
2024 CAPITAL MARKETS DAY Coming out of the pandemic, we have tapered follow-on investments into non-core companies, and expect >90 percent of 2025 follow-ons to land in our core companies and new ventures Rolling LTM Percentage Share of Follow-On Investments, Core Companies and Selected Ventures
Slide 26: Portfolio overwhelmingly performing, promising or stable and profitable
2024 CAPITAL MARKETS DAY Our portfolio is now overwhelmingly performing, promising or stable and profitable, and there is little residual risk for a drag on returns or capital as we head into 2025 Core Companies Selected Ventures Mature Non-Core Other Non-Core the Engine of Our Portfolio Potential f
Slide 27: Track record makes us the preferred investor by founders
2024 CAPITAL MARKETS DAY Our track record and differentiated approach has made us the the preferred investor by founders of the best venture and growth companies in our focus sectors New Investment Funnel 2023-24 To Date Diligenced 300+ Data Room 62 ▪ Many VC funds are fundamentally misaligned with
Slide 28: Most successful investments leveraged our strengths
2024 CAPITAL MARKETS DAY Our most successful investments have leveraged our strengths, being an engaged and large investor, pacing discretionary investments at equal step with conviction and performance 1st Investment Follow-Ons SEKm 300 Over 5+ Years 3-5x Relative to 1st Investment Board Representa
Slide 29: Capital allocation expectations into 2030
2024 CAPITAL MARKETS DAY Over the next 5 years, we will allocate capital drawing on lessons learned over the last 5 years, maximizing our competitive advantages Capital Allocation Expectations Into 2030 Key Parameters Investing SEK 15-20bn+ Paced With Divestments Investment 40/60 1st Tickets & Disci
Slide 30: Europe's Leading Growth Investor
Europe’s Leading Growth Investor A Proven Strategy & Superior Model A Portfolio Concentrated to Outlier Successes A Small & Fast Team with a Big & Broad Network Higher Portfolio Transparency >20% Annualized Shareholder Value Creation
Slide 31: Agenda
Agenda 9.30 Kinnevik as a Leading Growth Investor ▪ Georgi Ganev, CEO & Samuel Sjöström, CFO 10.15 The Heart of Healthcare & The Rise of Mental Wellness ▪ Christian Scherrer, Senior Investment Director ▪ Adam Chekroud, Spring Health Co-Founder 10.45 Break 11.00 Smart Care, Smarter Drugs: Value-Based
Slide 32: Capital Markets Day October 2024
Capital Markets Day 23 October 2024
Slide 33: The US is at the forefront of health innovation and spend
2024 CAPITAL MARKETS DAY The US is at the forefront of health innovation and spend (% of GDP) 20% 47% 109 10% 19% 8 Source: OECD, UN, HolonIQ, CMS, ourworldindata, FT, Peterson-KFF, cancer.org, NIH. 33
Slide 34: Our portfolio companies are solving the most pressing challenges
2024 CAPITAL MARKETS DAY Our portfolio companies are solving the most pressing challenges % of US Population Americans With a Mental Illness Prevalent Cancer Cases in the US Today 40% 46m 12m 25 Years Ago 28% 35m 9m Note: Mental illness includes anxiety, depression, bipolar, eating disorders, schizo
Slide 35: Why health founders choose Kinnevik
2024 CAPITAL MARKETS DAY Why health founders choose Kinnevik ▪ Helped create six unicorns with our first ▪ A decade of healthcare investing ▪ No VC overhang post IPO investment in three of them at valuations ▪ Specialist fund investments ▪ Protect management from distraction below USD 350m ▪ World c
Slide 36: Expansion into Bio timed with the AI revolution in drug discovery
2024 CAPITAL MARKETS DAY Our expansion into Bio was timed with the AI revolution in drug discovery Artificial Compute Advanced Better Robotics Intelligence Power Tools Medicines Machine Learning, Large High-performance Graphics Lab automation for increased Innovative tools used in drug AI Industrial
Slide 37: We have scaled our investments after clear proof points
2024 CAPITAL MARKETS DAY We have scaled our investments after clear proof points Virtual Care, Value-Based Care and Bio (SEKbn) 2.5 1.2 5.3 1.0 1.0 2.0 1.5 1.0 0.5 2016 2017 2018 2019 2020 2021 2022 2023 2024 To Date 37
Slide 38: Three proven business models
2024 CAPITAL MARKETS DAY In a complex sector, we focus on three proven business models Value-Based Care Virtual Care Bio Our Portfolio Business Model Shared Savings + Capitation Subscription + Utilization Upfront + Milestones + Royalties Channel Payers Self-insured Employers Pharma Gross Margin 15-2
Slide 39: Outstanding results and poised for future value creation
2024 CAPITAL MARKETS DAY We have delivered outstanding results and are poised for future value creation Large & Long-Term Top Quartile Already Realized Capital, Commitments Venture Returns Large Remaining Portfolio SEK 8.5bn Capital Realized SEK 10.4bn 32% Capital Deployed Inception IRR SEK 9.7bn Ne
Slide 40: Companies serve millions of patients at a 70+ Net Promoter Score
Our companies serve millions of patients at a 70+ Net Promoter Score and for every dollar invested in their services they save four dollars in avoidable care or productivity loss
Slide 41: Our core health and bio companies represent 32% of our portfolio
2024 CAPITAL MARKETS DAY Today, our core health and bio companies represent 32% of our portfolio Our Core Health & Bio Companies Ownership 15% 9% 10% 4% Invested Capital 3.3 1.1 0.4 1.1 (SEKbn) Fair Value 4.9 2.4 0.4 0.8 (SEKbn) Source: OECD, UN, HolonIQ, CMS, ourworldindata, FT, Peterson-KFF, cance
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Slide 43: Capital Markets Day October 2024
Capital Markets Day 23 October 2024
Slide 44: Portfolio shift from marketplaces towards software
2024 CAPITAL MARKETS DAY Our portfolio shift away from marketplaces towards software reflects our fundamental view of white-space opportunities and growth potential • In the last 10 years we have Consumer Enterprise observed plateauing of online Demand Side Penetration Penetration consumer penetrati
Slide 45: Consumer penetration maturing while enterprise and merchant providers create value
2024 CAPITAL MARKETS DAY Consumer has seen maturing penetration and value gains largely accruing to large public companies, while enterprise & merchant providers have seen rapid value creation in erstwhile private companies Approximate Online Penetration In Select Sectors From 2018 to 2024 Consumer
Slide 46: Software strategy centered on two focus areas
2024 CAPITAL MARKETS DAY Our software strategy to date has been centered on two focus areas Consumerization Vertical SaaS of Enterprise Operating systems that allow merchants to Businesses driving the corporate adoption of What It Is manage their businesses consumer-like solutions for business use E
Slide 47: Portfolio well-positioned for changing attitudes towards software sub-segments
2024 CAPITAL MARKETS DAY Our portfolio is well-positioned for changing market attitudes towards software sub-segments Business Models and Financial Profiles Secular Changes from AI EV/NTM Revenue Evolution Pre-Covid Current Software 7.8x 5.6x Code as a moat Seat-based models Vertical SaaS 7.8x 8.6x
Slide 48: AI will expand total addressable markets while reducing operating costs
2024 CAPITAL MARKETS DAY Looking ahead, we believe AI will result in a significant expansion of total addressable markets alongside reducing operating costs Labor Optimization Revenue Optimization Payments & FinTech Levers for Operating Cost Optimization Operations Optimization General & Administrat
Slide 49: Why we win in software
2024 CAPITAL MARKETS DAY This is why we win in software and have delivered a 28% IRR since inception 49
Slide 50: European leaders with deep connectivity in the ecosystem
2024 CAPITAL MARKETS DAY We are European leaders with deep connectivity in the ecosystem, with an ability to select the best-in-class investments while being disciplined capital allocators 100+ Unicorns Funded Since 2018 20+ Centaurs (USD 100m+ ARR) 3 Kinnevik Companies Source: Pitchbook. 50
Slide 51: Business model specialists scaling to USD 100m ARR and beyond
2024 CAPITAL MARKETS DAY We are business model specialists with lighthouse investments in both areas, and have a deep understanding of what it takes to scale to USD 100m ARR and beyond Among the very best in Vertical SaaS investing… …leading the “Office of the CFO” revolution 10+ 15-20+ >USD 100m AR
Slide 52: Our software companies represent 28% of our portfolio
2024 CAPITAL MARKETS DAY Today, our software companies represent three of our five core companies and 28% of our portfolio Our Key Software Companies Ownership 8% 14% 14% 7% Total Invested Capital (SEKbn) 0.9 0.9 0.8 0.3 Fair Value (SEKbn) 1.1 2.4 2.7 0.7 Return on First Ticket (SEKbn) 1.3x 5.1x 24.
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Slide 54: Capital Markets Day October 2024
Capital Markets Day 54 23 October 2024
Slide 55: Why now for climate tech?
2024 CAPITAL MARKETS DAY’ Why now for climate tech? Strong Pipeline of Climate Tech Companies 55
Slide 56: Why now for Kinnevik?
2024 CAPITAL MARKETS DAY Why now for Kinnevik? Sustainability Expertise Differentiated Capital Lighthouse Assets Kinnevik Core Focus Long-Term, Multi-Stage Spanning a Variety For 5+ Years Investment Capabilities of Business Models 56
Slide 57: Strategy focused on companies aligned with five pillars
2024 CAPITAL MARKETS DAY Our strategy has focused on exciting companies that align with five pillars Large Near-Term Strong Proven Innovative Markets Impact Moats Tech Teams Addressing USDtn markets Interventions with high potential Strong moats through tech IP, Proven technology with a Founders and
Slide 58: Climate tech pipeline since inception
2024 CAPITAL MARKETS DAY With a dedicated team we have been able to dive deep into thematic areas and invest selectively and meaningfully Our Climate Tech Pipeline Since Inception 700+ Screened 50% Reviewed 17% Diligenced 5% Investment Committee 5 Investments 58
Slide 59: Climate tech pipeline: residential energy example
2024 CAPITAL MARKETS DAY With a dedicated team we have been able to dive deep into thematic areas and invest selectively and meaningfully Our Climate Tech Pipeline: Residential Energy Example 30 Reviewed 20 Diligenced 4 Investment Committee 1 Investment 59
Slide 60: Portfolio aligns with the five pillars
2024 CAPITAL MARKETS DAY Our portfolio today aligns with our stated strategy‘s five pillars Disrupting Agriculture Chemicals Steel Carbon Removal Residential Heating Industries Large Market USD 1tn USD 6tn USD 2tn USD 1tn USD 4tn Legacy Industry Share of Global 18% 6% 7% 27% 11% Emissions Farmer Acc
Slide 61: Lighthouse assets validated by multiple stakeholders
2024 CAPITAL MARKETS DAY Our portfolio includes lighthouse assets that have been validated by multiple stakeholders “53 Most Promising Climate Tech Startups” Business Insider, 2023 CDR Semi-Finalist “50 by 2050” Congruent Ventures and SVB, 2024 Example Customers USD 214m LPO Award Largest US Governm
Slide 62: Ambition to remove annual emissions equivalent to all of Sweden
45.2 Million Tonnes CO2-eq In aggregate, by 2030 our portfolio companies have the ambition to remove annual emissions equivalent to all of Sweden Source: Climate Action Progress Report 2023.
Slide 63: Our climate tech companies represent 10% of our portfolio
2024 CAPITAL MARKETS DAY Today, our climate tech companies represent 10% of our portfolio Our Climate Tech Companies Ownership 16% 2% 3% 2% 10% Invested Capital 0.3 0.5 1.2 0.1 0.6 (SEKbn) Fair Value 0.3 0.5 1.3 0.1 0.6 (SEKbn) Note: As at Q3 2024. 63
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