Vef Ab · OMXSTO:VEFAB
Vef Ab — Investor Presentation (June 2021)
71 slides from Vef Ab's investor presentation, June 2021
Slide 1: The emerging market fintech investor
J ¢ - Investor Presentation June 2021 The emerging market fintech investor
Slide 2: Introduction to VEF — The Emerging Market Fintech Investor
1 Introduction to VEF — The Emerging Market Fintech Investor VEFr
Slide 3: IRR (NAV per share) IRR (Price per share)
• • • • • • • • • IRR (NAV per share) IRR (Price per share)
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 ... © 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 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 — 59% Mexico — 17% > Mexico Emerging Europe —- 7% Ccreditas G GuiabolsoMbe magnetis @ VEF investments *% of 1Q21 VEF NAV (excl. cash) India OJUSPAY VEFr India -
Slide 6: 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 7: Current investments and successful exits from fintech leaders
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 8: NAV/share & share price performance
NAV/share & share price performance Premium/(Discount) to NAV 5.0 20% 4.5 10% 4.0 0% 3.5 3.0 -10% 2.5 -20% 2.0 -30% 1.5 -40% 1.0 0.5 -50% 0.0 -60% NAV/Share (SEK) Share Price (SEK) Premium/(Discount) to NAV Key figures
Slide 9: Exit Overview
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 10: Major shareholders
Ruane, Cunniff & Goldfarb! 176,832,109 21.3% Fidelity International (FIL) 26,254,137 3.2%| Svenska Handelsbanken AB for PB 15,343,000 IGADD & Cie S.A. 13,280,957 iAvanza Pension 13,218,367 ‘Atlant Fonder AB 10,063,124 640,967,556 188,283,687 829,251,243 iShares held by management 16,473,107 ‘Holding
Slide 11: 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 12: VEF's Portfolio
2 VEF’s Portfolio VEFr
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: Share of total portfolio NAV
47.1% 59% 41.8% 3.3% 1.2% 1.2% 2.2% 3.0% % of total portfolio NAV
Slide 16: 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 17: Creditas quarterly metrics
- 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 18: NAV/share and share price, new investments
4.8 200 4.3 150 3.8 100 3.3 50 2.8 2.3 0 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 2017 2018 2Q19 1Q20 2Q20 3Q20 4Q20 NAV/share (SEK) Share Price (SEK) New investment USD mln
Slide 19: Brazil Emerging Europe India
Brazil Emerging Europe India
Slide 20: 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 21: Focus: 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 22: Konfio
Konfio Data-driven financial services ( < konfio VEF Boosting SMEs growth and productivity Three-Pillar Strategy Traction Business Evolution a Lending: \ \ (LM Revenues (Mn of Mx$} and Data Sets (Millions) J Unique non-collateralized, fully digital, agile working capital loan — Sealing-up to pas wii
Slide 23: 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 24: 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 25: 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 26: 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 27: Brazil Mexico Emerging Europe
Brazil Mexico Emerging Europe
Slide 28: 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 29: 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 30: 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 31: Investment Opportunities
Investment Opportunities VEFr
Slide 32: 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 33: Follow-on investments and average number of portfolio companies
60 16 14 50 12 40 10 30 8 6 20 4 10 2 0 0 2015 2016 2017 2018 2019 2020 2021 Follow-on Follow-on (planned) Avg # of companies in VEF portfolio
Slide 34: 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 35: VEF investment case
VEF investment case VEFr VEF provides unique access to one of the most exciting value creation spaces within emerging markets. Execution record of gaining access to some of the top private fintech assets across the emerging world We have been in (and out) of top fintech assets in Russia/Turkey, curr
Slide 36: ESG
VEFr
Slide 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 43: Appendix
Appendix
Slide 44: History of value creation, Governance structure, Other portfolio holdings
History of value creation Governance structure Other portfolio holdings
Slide 45: Top-down drivers, segments of focus, attractive opportunities
TOP-DOWN DRIVERS IDENTIFY SEGMENTS OF FOCUS ATTRACTIVE OPPORTUNITIES ALL ABOUT TEAM AND PEOPLE BOTTOM-UP MAPPING
Slide 46: 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 47: 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 48: Deal sourcing, Governance structure, Other portfolio holdings
Deal sourcing Governance structure Other portfolio holdings
Slide 49: Evolution of Global Fintech M&A and EM fintech exits
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 50: Deal sourcing, History of value creation, Other portfolio holdings
Deal sourcing History of value creation Other portfolio holdings
Slide 51: 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 52: Deal sourcing, History of value creation, Governance structure
Deal sourcing History of value creation Governance structure
Slide 53: 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 54: 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 55: 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 56: Share of total portfolio NAV
47.1% 59% 41.8% 3.3% 1.2% 1.2% 2.2% 3.0% % of total portfolio NAV
Slide 57: Nibo SaaS dashboard
Focus Accounting SaaS provider for SMEs & 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 58: Nibo customers and valuation comparison
Customers 320k 300k Addressable SMEs 10m+ 600k Implied market share 3.2% 50% Max growth potential 31x 2x Valuation / current market cap (USD) 60m 3.0b* Valuation vs. Nibo 50x
Slide 59: Focus: 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 60: 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 50 +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 61: FinaZero: 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 62: Focus: 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 63: Focus: 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 64: 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 65: Focus: 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 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: Focus: 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 unbanked consumers and merchants alike
Slide 69: Focus: 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