Investor Presentation | August 2020
01 Introduction to VEF – Emerging Market Fintech Investors 02 Deal Sourcing 03 VEF’s Portfolio 04 History of Value Creation 05 Appendix
Emerging Market Fintech Investors Riding one of the strongest multi- year secular growth trends in some of the world’s fastest -growing markets Emerging Market Specialists Fintech Expertise Listed Investment Company ✓ Extensive Emerging Markets investing experience ✓ Deep sector knowledge built through evaluation of ✓ VEF is listed on Nasdaq First North Growth over 350 deals and sitting on 13 board seats across Market in the Nordics ✓ David Nangle, CEO: 20 years EM financial all lines of fintech services ✓ A unique access vehicle: Opportunity to access fast-growing private EM fintechassets via a ✓ Alexis Koumoudos, Investment Partner: 10 years ✓ Unique global fintech lens listed share EM investing ✓ Execution of 20+ private transactions across ✓ Strong track record of value creation with 2 Emerging Markets successful exits in Russia’s and Turkey’s leading 23.7% Africa fintech companies 23.1% 1% Pakistan 4% Russia 5% India 6% Emerging Europe 11% 59% Brazil Mexico IRR (NAV per share) IRR (Price per share) 14% 2Q20 NAV split ex. cash 5.1x $223M 65% $20.6M 2 14 Realized CoC NAV ( Jun’20 ) Gross realized Cash & Liquid Investments Number of exits multiple* IRR* Investments since inception *Gross realized IRR and cash multiple from 2 exits (Tinkoff and Iyzico) till date; # Including board seat in Iyzico (now exited) NAV data as of 30 th June, 2020 Share price data as of 27 th July, 2020
Targeted investment approach with a clear mandate SECTOR We target all lines of financial services inclusive of payments, credit, mobile money and financial marketplaces. The “right” target sector is very market -dependent. GEOGRAPHY Within emerging markets, we focus on the more populous and scalable markets, referenced against competition for opportunities and point in the cycle. MINORITY STAKES AND A BOARD SEAT VEF targets sizeable minority stakes of 10 – 20% with board representation in its portfolio companies. We are active and supportive shareholders. UNIQUE FINTECH INVESTMENT There are very few ways to play the growing fintech investment theme in public markets and even less in the emerging world. VEF is a unique access asset in this regard.
Deep expertise across the fintech spectrum Leverage unique global lens and fintech expertise to target opportunities on a country by country basis CREDIT PAYMENTS PERSONAL INVESTMENTS OTHER FINTECH INSURTECH FINANCE ▪ Consumer ▪ Offline ▪ Digital Banks ▪ Wealth ▪ Accounting ▪ Comparison Management SaaS ▪ SME ▪ Online ▪ Personal ▪ Full-stack ▪ Roboadvisors ▪ HR & Payroll Finance digital ▪ Secured ▪ Mobile Managers Management ▪ Digital Brokers ▪ Unsecured ▪ Remittances ▪ Mobile Wallets VEF investments
A diversified portfolio across scale emerging markets India VEF has backed entrepreneurs across 5 continents since inception in 2015 6% Brazil Russia 59% Russia Emerging Europe 5% Mexico Pakistan ` 14% Africa Mexico Africa India 4% Emerging Europe Brazil 11% Pakistan 1% VEF investments xx% % of 2Q20 VEF NAV (excl. cash)
Portfolio Commentary VEF Portfolio NAV as at June 30 th 2020 • We have 12 holdings in our portfolio as of 2Q20, diversified by geography, business type and stage of development. USD 223.2 mln • In April 2020, we made our first investment in India: Current Holdings and • Invested USD 13 mln in Juspay, one of the country’s leading New payments companies. Investments Cash & Liquid Assets • Creditas is starting to emerge as the relative size portfolio 9% champions with most likely impact on NAV evolution going 1% 2% forward. 3% 3% 36% • Completed exits of Tinkoff and iyzico in 2019. 3% Value Creation • Gross realized IRR of 65% (cumulatively on both exits). 4% 5% • Cash Position USD 20.6 mln cash position at the end of 2Q20. 5% 6% 13% • 10% More focus YTD on current portfolio. Pipeline starting to heat Current Focus up again.
VEF Portfolio Summary Company Country Segment Inv. Date Ownership % Invested Amount (USD mln) Jun’20 Fair Value (USD mln) 48.5 80.7 Brazil Secured Lending Dec-17 9.6% 27.5 28.1 Mexico SME Lending Jun-18 11.4% 11.0 21.4 Emerging Europe Cross-border Remittances Jun-16 15.4% 13.0 13.0 India Payments Apr-20 9.9% 6.5 11.3 Brazil Accounting SaaS Apr-17 20.1% 8.8 10.2 Russia Payments & Consumer Credit Sep-15 25.0% 30.0 9.6 Brazil Personal Finance Manager Oct-17 10.9% 2.7 7.6 Brazil Consumer Credit Marketplace Mar-16 18.0% 14.6 7.5 Africa Mobile Money Marketplace Oct-15 6.8% 5.7 6.6 Brazil Digital Investments Sep-17 17.5% 8.5 4.5 Brazil HR & Payroll Management Sep-19 16.0% Pakistan Mobile Wallet Jul-16 20.4% 2.4 2.5 USD 203 mln (excl. cash and liquid assets)
Strong history of value creation since inception 2 successful exits in 2019 with gross IRRs >50% Successful exits Date: Feb 2019 Date: Dec 2019 Exit: Stake sale in Exit: Sold to Naspers listed entity Realized returns Unrealized returns 65% 6.1x 57% 3.2x 23.7% 23.1% Gross realized Realized CoC Gross realized Realized CoC NAV per share Price per share IRR multiple IRR multiple IRR IRR NAV data as of 30 th June, 2020 Share price data as of 27 th July, 2020
Governance structure Ranjan Tandon Per Brillioth Lars O Grönstedt Milena Ivanova Board Member Chairman of the Board Board Member Board Member Experience: Experience: Experience: Experience: • • • • Founder and Chairman, Libra MD of Vostok New Ventures Chairman and MD of Renaissance Capital Deputy Head of Research Advisors (VNV) Handelsbanken • EM investing 22 yrs. David Nangle Managing Director and Board Member Board of Directors Experience: • Renaissance Capital Head of Research and Financials Management Sector Research • ING Barings Head of EMEA Financials Research Alexis Koumoudos Éire Smith Henrik Stenlund Elisabet Hultén Helena Caan Matsson Associate Deputy CFO General Counsel Investment Partner CFO Experience: Education: Experience: Experience: Experience: • • • • • Partner at Skyline BA in Business and COO of Pomegranate Business Controller, DIBS M&A, corporate law at Capital Management Economics, Trinity Investment, VNV Payment Services Cederquist, Baker & • • College Dublin CEO, Strix Television AB Consultant, Deloitte McKenzie, Roschier Investment Team/IR Finance & Legal
VEF shareholder structure Owner Holding, SDRs Holding, % Libra Fund¹ 179,336,674 27.1% Ruane Cunniff & Goldfarb¹ 141,832,109 21.4% Swedbank Robur Funds 57,674,245 8.7% Fidelity FIL 53,297,131 8.1% Wellington Management¹ 31,857,094 4.8% Gadd & Cie S.A 15,660,000 2.4% Svenska Handelsbanken AB 15,343,000 2.3% Avanza Pension 11,861,393 1.8% Nordnet Pension 5,340,092 0.8% Wasatch Advisors 4,471,368 0.7% Top 10 Holders 516,673,106 78.1% Others 144,822,889 21.9% Total Shares 661,495,995 100.0% *Shares held by management 17,442,582 2.6% ¹Holding as per the latest notification to the Company. Based on Euroclear Sweden AB data and holdings known to the company. Including foreign nominees.
01 Introduction to VEF – Emerging Market Fintech Investors 02 Deal Sourcing 03 VEF’s Portfolio 04 History of Value Creation 05 Appendix
Deal sourcing Country by country approach to targeting opportunities TOP-DOWN DRIVERS Capital markets Macroeconomics Tech adoption Regulation + + Cultural aspects + + Funding sources Access to talent Unit Economics Behaviour Regulatory drivers + + Exit environment Demographics IDENTIFY SEGMENTS OF FOCUS ATTRACTIVE OPPORTUNITIES ALL ABOUT TEAM AND PEOPLE Private players Venture capital funds Listed players Incumbents BOTTOM-UP MAPPING
Unique global fintech lens 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. `
Rigorous investment process We identify and track investees for a long time before investing DURATION COUNTRY-BY-COUNTRY APPROACH TO IDENTIFYING OPPORTUNITIES 01 Ongoing Use top-down drivers and bottom-up mapping to identify attractive opportunities and teams INVEST TIME AND BUILD A RAPPORT 3 months – 02 Spend time with the team on the ground, getting to know the individuals, business, products and competitors. 1.5 years Continue to track progress from a distance INVESTMENT COMMITTEE 03 1 month Produce investment proposal and present to investment committee who are fully appraised of the funnel and have input before this stage. Gain formal approval to proceed and range of potential terms under which to negotiate. DUE DILIGENCE 04 1-2 months Perform thorough due diligence (legal, operational, technology and financial) leveraging third party experts where necessary. CLOSING 05 1-2 months Legal and final closing procedures 6 months – TOTAL INVESTMENT PROCESS 2 years
01 Introduction to VEF – Emerging Market Fintech Investors 02 Deal Sourcing 03 VEF’s Portfolio 04 History of Value Creation 05 Appendix
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