Investor Presentation January 2019
VEF - Investing in Leading Private Fintech Companies Across Emerging Markets Within emerging and frontier markets, we focus on the more populous and scalable markets, referenced Geography against competition for opportunities. We target all lines of financial services inclusive of payments, credit, mobile money and financial Sector marketplaces. The “right” target sector is very market -dependent. VEF targets sizeable minority stakes of 10 – 20% with board representation and tends to be an active, Minority stakes and supportive shareholder. board seat Private equity VEF is structured as a listed investment company while our mandate is to invest in emerging private access vehicle companies. Unique fintech There are very few ways to play the growing fintech investment theme in public markets and even less investment in the emerging world. VEF is a unique access asset in this regard. 2
Fintech Funding Trends 3
Fintech Funding Trends Quarterly VC-backed global fintech deals and financing, 2013 – 2018 YTD (Q3’18), ($B) 4
Fintech Unicorns 5
Listed Fintech Companies (4Q18) Europe Russia China $19.2B $3B $1.4B North America $21.2B $0.8B $5.6B $1.8B $1.6B $1.5B $1.6B $2B $1.6B $0.6B $28.9B Australia/NZ Brazil $98.7B $4.1B $6.9B $2.1B $7.3B 6
Where Fintech Meets Emerging Markets CREDIT PAYMENTS OTHER FINTECH Consumer Offline Accounting SaaS SME Online Wealth Management P2P Mobile Digital Banks Credit Scoring Remittances Mobile Wallets Comparison Websites Personal Finance Managers Insurance 7
Portfolio Commentary • At the end of Q3, VEF had 12 holdings in the portfolio, plus cash and liquid assets. • TCS was our largest holding – we continued to reduce our position to YE18. • Still diversified and balanced portfolio mix but we expect dominant names to start to show through in 2019. • Strong cash position (rising from $16 mln at end of Q3 to c. $50mn at YE18) leaves us well positioned. • We would expect the number of holdings and their relative size to grow over time. VEF Portfolio as at September 30, 2018. NAV: USD 204.9 mln 8
VEF Portfolio 9 *Value of related invested amount
Portfolio Distribution By Geography (ex cash) Including all investments Excluding listed investments 10
VEF Share Price and NAV/Share Evolution NAV/Share Share Price 3.10 2.90 2.70 2.50 2.30 2.10 SEK 1.90 1.70 1.50 1.30 Rights 1.10 issue 0.90 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 5 6 6 7 7 8 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - n b r r y n p v n b r r y n p v n b r r y n p c l g t c l g t c l g t a p a u c o a p a u c o a p a u c e a e u u e e a e u u e e a e u u e M J O M J O M J O D J F A M J A S N D J F A M J A S N D J F A M J A S Date Latest Share NAV / Share Discount NAV (USD mln) Market Cap Market Cap Price (SEK) (SEK) (SEK mln) (USD mln) Dec 28, 2018 1.75 2.79 37.3% 204.9 1,157 129 11
VEF Shareholder Structure, Largest Shareholders *Holding as per the latest notification to the Company. 12 Based on Euroclear Sweden AB data and holdings known to the company. Including foreign nominees.
Governance Structure Lars O Grönstedt Voria Fattahi Ranjan Tandon Chairman of the Board Board Member Milena Ivanova Per Brillioth Board Member Experience: Experience: Experience: Board Member • Chairman and MD of Board Member • Investment Director at • Founder and Chairman, Experience: Experience: Handelsbanken Volati AB Libra Advisors • MD of Vostok New • Renaissance Capital • Vice Chairman of • Investment AB Kinnevik • Merril Lynch, DCM, Ventures Deputy Head of • Apax Partners Swedish National Debt Halliburton • Chairman of Research Office Pomegranate AB • UniCredit Markets & • EM investing 22 yrs. Investment Banking David Nangle Managing Director and Board Member Board of Directors Experience: • Renaissance Capital Head of Research and Fin. Sector Research • ING Barings Head of EMEA Financials Research Management Alexis Koumoudos Éire Smith Henrik Stenlund Elisabet Hultén Helena Caan Mattsson General Counsel Investment Manager Research Associate CFO/COO Deputy CFO Investment team/IR Finance & Legal 13
Our Portfolio Companies
VEF Portfolio 15 *Value of related invested amount
Tinkoff Bank • Business Type : Digital Banking • Founded : 2006 Year of investment: 2007 Key Facts • Ownership Stake: 1.4% • Key region: Russia • 3Q18 Net Income up to ₽7.3 bln for a 44% growth YoY • Growing F&C income pushes ROA up to 9.6% in 3Q18 • Record high profit with stable equity sends 3Q18 ROE above 80% 16 All currency data are in RUB bln unless otherwise stated
Tinkoff Bank New Lines of Business Driving Value Creation at Tinkoff Current Accounts SME Mortgages Investments 17 All currency data are in RUB bln unless otherwise stated
Tinkoff Bank Share of VEF Portfolio 2017YE 3Q18 Tinkoff – Our First Exit Cost of exited position USD 12.3 mn Total proceeds from exited position USD 69.1 mn Date entered position 09/06/2015 Date exited last shares 26/10/2018 Years in position 3.38 IRR 70% CoC return 6x 18
Creditas • Type: Secured consumer lending • Founded: 2012 Year of investment: 2017 Key Facts • Ownership Stake: 10.0% • Key region: Brazil Creditas is a leading digital-first secured lending platform with the mission of reducing the Brazilian consumer debt 1 burden. Secured lending represents a $3tn opportunity in Brazil 2 where consumers face some of the highest interest rates Source: The World Bank, IMF in the world. 70% of homes and cars in Brazil are owned debt-free. 3 Creditas allows consumers to use these assets to reduce high borrowing costs. Principal revenue generation drive through their home 4 equity and auto-secured loans, with further segments to follow. Strong management team of former consultants, founders 5 and experience in secured lending credit businesses. Source: Banco Central do Brasil 19
Creditas PagSeguro XP Investimentos 20
GuiaBolso • Type: Personal finance management • Founded: 2012 Year of investment: 2017 Key Facts • Ownership Stake: 10.9% • Key region: Brazil Personal finance manager with the mission of 1 transforming the financial well being of Brazilians. The Credit Karma of Brazil. Leverage proprietary bank data aggregation technology to 2 better inform and offer the most appropriate financial services suited to individuals. Have 4.9mn customers today of which more than 2.9mn 3 have linked their bank data to GuiaBolso. Principal revenue generation drive through their consumer 4 credit marketplace. More segments to follow. Very strong founding team, mix of former consultants and 5 from successful startups. 21
Iyzico • Type: Payment Processor • Founded: 2012 Year of investment: 2017 Key Facts • Ownership Stake: 20.1% • Key region: Turkey Leading payment solutions provider for online retailers in 1 Turkey. Has over 23k live merchants and 380k seller accounts 2 under marketplaces. Turkey is the largest consumer card market in Europe yet 3 remains under-penetrated in the rapidly growing online payments space. 4 Payment volumes and revenue up triple digit % YoY. Founding team have a successful track record and 5 experience at global leaders in the space. 22 Source: TUBISAD & Deloitte, 2017
Iyzico Key Merchant Partners Source: Morgan Stanley, 2018 23
Konfio • Type: Digital SME Lending • Founded: 2014 Year of investment: 2018 Key Facts • Ownership Stake: 11.7% • Key region: Mexico A Mexican digital-first unsecured lending platform, with a mission to support the growth of Mexico’s vast and 1 underserved small business community. Mexico is Latin America’s 2nd largest market with a 2 population of 127mn (number 10 globally) and over 7mn SMEs. Within the Mexican SME credit space, Konfio focuses on the 3 top end credit of the small business segment which is viewed as a USD 45bn opportunity. Konfio leverages tech, big data and recent Mexican fiscal 4 control to offer loans to creditworthy customers historically underserved by traditional banks. Excellent founder and top management team with some of 5 the strongest VCs in LatAm supporting their success. 24
JUMO • Type: Mobile Money Marketplace • Founded: 2013 Year of investment: 2015 Key Facts • Ownership Stake: 7.2% • Key region: South Africa Largest-scale, low-cost, financial services platform for FINANCIAL SERVICE PROVIDERS 1 emerging markets. JUMO Capital LETH TAMR BARC OM Focus on key mobile money markets of Africa and sub- 2 continent with an Asian growth story. Integrates through MNOs with their client bases offering JUMO MOBILE MARKETPLACE 3 the product suite of FSPs through their marketplace. Over 7.7mn unique customers to date with 2.7mn 90 day 4 active. For 80% of our customers it is their first interaction VIMP MTN AIRTEL TIGO VODA TELNOR with formal financial services. Model has no real peer today. Very strong and deep 5 MOBILE NETWORK OPERATORS management bench. 25
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