Quarterly Report • Apr 19, 2023
Quarterly Report
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The emerging market fintech investor
No significant events after the end of the period.
Visit VEF's IR page for our financial reports and other information: vef.vc/investors
• Net result for 1Q23 was USD 28.4 mln (1Q22: -24.1). Earnings per share were USD 0.03 (1Q22: -0.02).
The first quarter broad-based recovery in financial markets had a positive impact on the financial results in 1Q23. On average peer valuation multiples were in positive territory through the quarter and combined with underlying portfolio performance was the key driver of overall NAV. On an aggregated level, portfolio performance remained strong, with moderated revenue growth a reflection of plans to reach break-even at a majority of portfolio companies.
| Dec 31, 2021 | Dec 31, 2022 | March 31, 2023 | |
|---|---|---|---|
| Net asset value (USD mln) | 761.7 | 381.8 | 410.4 |
| Net asset value (SEK mln) | 6,885 | 3,981 | 4,261 |
| Net asset value per share (USD) | 0.73 | 0.37 | 0.39 |
| Net asset value per share (SEK) | 6.61 | 3.82 | 4.09 |
| VEF AB (publ) share price (SEK) | 6.05 | 2.45 | 1.90 |
NAV showed signs of recovery, increasing 7.5% QoQ, driven in part by a recovery of peer multiples and local currency performance. Juspay (+32% QoQ) and Gringo (+68% QoQ) were amongst key drivers, as valuation unlock was driven by a move to mark-to-model valuation for both.
Creditas announced its 4Q/YE22 summary financial results delivering top line revenues of BRL 1.8 bln in 2022, +118% YoY. Positive trends of improving gross margins off a more efficient cost base continue to be driven through this more moderated growth window.
Konfío's commitment to bank Mexican SMEs benefitted from a two-year extension and increase of their credit line to MXN 4.1 bln with Goldman Sachs and Gramercy, which allows for the granting of nearly 10,000 fresh loans.
VEF issued its maiden bond allocation and impact report. Funds raised in the bond were allocated to fund portfolio companies that derive 90% or more of their revenues from one or several sustainable finance categories: Konfío, Solfácil, Rupeek and Mahaana.
410.4
Net asset value
(USD mln)
With a market based NAV, quality portfolio and motivated team, we entered 2023 on the front foot with some tail winds back in our sails. 1Q23 started and finished with a broad-based recovery in financial markets, with technology and fintech stocks specifically catching a bid. This trend, combined with the underlying performance of our portfolio companies led to a USD NAV uplift QoQ of 7.5%, with all our top holdings in the green QoQ and Juspay a standout mover as a move to model-based valuation delivered size value unlock.
We are grateful to be running a permanent capital vehicle with a long-term view on value creation as in March we saw a return of volatility in the form of a banking crisis in developed markets! There has been much written of the events of March and the specific micro level issues at the various banks involved, inclusive of Silicon Valley Bank (SVB) and the systemically important Credit Suisse. The contagion risk was, and still is, very real, and it was important to see banking authorities, on both sides of the Atlantic, act quickly and firmly to stem the tide. For VEF, it was a clear reminder that this remains a very real stress/ risk window for macro and markets, and one can expect fallouts in a period of sustained pressure like this. Our long history in emerging markets is rife with stress windows like these. We benefit today from that experience as we stay vigilant, close to our portfolio and capital, and look to continue to stay one step ahead of all.
As I have stated many times: we are only as good as our portfolio. We spent valuable time through 1Q23 with our holdings, inclusive of time on the ground in Brazil and India where the majority of our holdings and NAV sits today. We continue to feel extremely well positioned, given underlying portfolio quality and trends predicted for 2023 within it.
We are very mindful of the current risk environment and how it has weighed on financial markets and risk assets within them. That said, in our view, there continues to be a disconnect between the quality of our portfolio and our NAV level, and the current market perception of them, as reflected in our share price. Just as King Canute could not control the tide, we understand the futility of share price watching in windows like this. We can, however, continue to pull as many levers as we logically can to return our shares to a more logical relationship to our NAV. Our 1Q23 NAV trending positive should support, as should our portfolio companies raising fresh capital at or above our
current marks. We are upping our IR and PR efforts and working closer than ever with our capital and investment banking partners. It's a process, we know that – "deliver, communicate, repeat" – expect more of the same through 2023.
As a reminder, we closed out 2022 with a NAV per share of SEK 3.82, off 42% YoY while our total USD NAV printed 382 mln, off 50% YoY. We were quick to react to deteriorating markets, as our portfolio valuation was directly impacted by a sharp contraction in listed fintech peer share prices over the period. As a sensitivity check, our USD NAV performance through 2022 was quite tightly correlated to global fintech traded indices performance. While this performance disappointed us as managers and shareholders, our goal was to keep our portfolio valuation aligned with the evolving public market reality and strive to always be able to stand behind our NAV, a market-based NAV.
With these deep valuation cuts taken, and with a rebased market NAV coming into 2023, 1Q23 proved to be a better quarter for markets and our portfolio marks, irrespective of the market volatility experienced in March. The average of global fintech indices (baskets of publicly traded fintech benchmark stocks) we track rallied in 1Q23, +20% QoQ. This is all while our portfolio continued to show robust growth QoQ, across the board.
We end 1Q23 with a NAV per share of SEK 4.09, up 7.0% QoQ. Total USD NAV ended the quarter at USD 410.4 mln, up 7.5% QoQ. The 0.4% strengthening of SEK vs USD QoQ drove NAV growth currency differential.
Portfolio valuation moves over the quarter worth highlighting:
Konfío, another key size holding, whose value was naturally dragged down by peer multiple performance through 2022, mostly benefitted from peer multiple 1Q23 recovery (22% QoQ).
Creditas saw a moderate 3% QoQ valuation mark increase, as we transition our valuation process from calibration to direct mark-to-model. The strength in peer multiples and underlying company growth YTD was mitigated by the evolution of valuation process. From a fundamental process viewpoint, we are very happy to see how the transitional calibration valuation method worked over the past year.
As seen through 2022 and into 1Q23, we continue to keep a consistency of valuation process in the eyes of our audit committee, auditors and most importantly the market. We also continue to see a concentration of our NAV around our larger holdings. At the end of 1Q23, we sit on USD 45.7 mln of capital.
During the quarter, we spent time on the ground in our two largest portfolio ecosystems, Brazil, and India.
Brazil is still settling in post recent presidential elections, with the new left leaning government finding its feet in classic noisy emerging markets fashion. At a macro level, inflation has been trending down to single digit territory. The market expects interest rates to decline towards the end of 2023, from peak levels today of 13.75%, a positive trend and tailwind for the country and fintech ecosystem, as and when it begins. Spending time with our broad base of ecosystem partners; local VCs, founders, investors, investment banks and lawyers, the tour reminded us of how far Brazil and LatAm venture has come in such a short space of time and how robust it is to manage through this volatile window. It is well-placed to support the next leg of growth in this exciting market. At a company level, we spent time with over half of our NAV while there. On this tour it was the newer holdings of our portfolio, Gringo and Solfácil, that impressed us most, a function of their still short duration in our portfolio coupled with how much they have achieved in a short, stress filled global and local period.
The amount of capital and resource dedicated to India (now the most populous country in the world) never ceases to amaze. At a political and macro level, while not being immune to global pressures, India remains one of the most stable scale robust growth stories on the planet. On our tour we touched many aspects of the local ecosystem that feed into the success of our investments, current and future, whilst there. We spent time with the RBI (Central Bank of India) to understand better their clamp down of certain companies operating in grey areas of financial services and came away comfortable with their very logical road map. On the venture investing front, India's early-stage VC scene feels like one of the most robust in our world right now, with a renewed focus on businesses that can demonstrate early revenue traction and healthy unit economics – qualities that have historically been overshadowed by TAM arithmetic. Later stage trends are similar to elsewhere, where valuations and fundraising in India are not immune to the new reality defined by higher rates. India had as many unicorns as any EM market, many of which are really having to strategize to find a path forward. All said, of our core markets, we are seeing the most confidence from Indian companies to come out for fresh funding conversations and are seeing strong signs of a fully functioning pipeline. We also spent time with each of our portfolio companies, and returned with renewed excitement about what they are achieving, particularly Juspay, which is maturing into a very strategic player and driver of digital payments in India.
We live and breathe our seventeen portfolio companies and we stay very close to them, irrespective of point in the cycle, as they look to build successful sustainable businesses. Below are some of the more interesting highlights and data points of the quarter just passed:
Creditas (Secured lending, LatAm) – Creditas released its headline IFRS results for 4Q22, posting robust 118/59% YoY revenue/loan growth. Consistent with peers and in line with recent communication, 2023 is a year to prioritise profit over growth. The 4Q22 numbers reflect this view as growth rates moderated whilst gross profit margin recovered, bottoming at c. 10–11% through 2Q/3Q22 to 14.5% in 4Q22 and rising. Below this line in the income statement, Creditas continues to rationalize its overheads, drive efficiency gains, and bring down customer acquisition costs to lowest levels experienced. This is all ongoing while asset quality remains stable given the collateralised nature of the loan book.
Konfío (SME finance, Mexico) – Konfío secured a two-year extension and increase for up to MXN 4.1 bln in credit lines from Goldman Sachs and Gramercy. With loan sizes ranging from MXN 150k to MXN 3 mln, this investment will allow Konfío to provide nearly 10,000 new loans. While part of Konfío's normal course of business in funding its balance sheet, we love the timing of this announcement, as it shows continued confidence in the Mexican SMEs segment and Konfío's lending business model by the broader funding market. As an aside, Konfío does seem very well placed to benefit from the growing Mexico nearshoring theme that is starting to be a real economic driver.
Gringo (Auto app, Brazil) – I repeat my message from the previous quarter, as it is just a pleasure to sit in a board room with a team properly delivering, as I did recently in São Paulo. Gringo delivered a very strong 2022, growing to over 10 mln registered users and an active user-base close to 3 mln drivers in Brazil, with top line revenues driven by vehicle registration, taxes and fine payments growing 500%+ YoY. These trends have continued into 1Q23, a seasonally strong window for the business. In addition to their core offering, it is exciting to see them move into adjacent products, like marketplace, where they work with fellow VEF portfolio company Creditas.
Solfácil (Solar ecosystem, Brazil) – The climate space is one of the most in-focus investment themes in venture right now and our timing to invest in Solfácil a year ago could not have been better. Brazil's only size solar ecosystem play, we profiled the company and opportunity in our recent annual report (see here) and release to investors. In 1Q23, Solfácil announced the purchase of solar kit distributor Solar Inove. Something of a game changer, the acquisition aims to expand its solutions available to Solfácil partners, Brazilian installers.
FinanZero (Lending marketplace, Brazil) – FinanZero positively engaged with the markets in 1Q23 in a bid to top up its 2022 fund raise with a second close. Any additional capital raised would put FinanZero in a great place to own the digital loan broking space in Brazil at a time when smaller peers are retreating from the market.
March brought a return to market volatility. SVB, the 16th biggest bank in the US at the time, announced a surprise capital raise to cover realised losses from bond sales which first spooked shareholders due to the size of unrealised losses relative to their equity. The capital raise failed, and ultimately a run ensued on its largely corporate/ start-up deposit base. Confidence erosion spread to other regional banks, causing authorities to step in. They placed
SVB (and Signature Bank) into receivership, protected their uninsured deposits and provided a liquidity facility for the broader system. Confidence in European financials was also temporarily dented, with the weakest link Credit Suisse forced into a hasty sale to UBS. Although fluid, regulators on both sides of the Atlantic appear to have their arms around the situation with more policy tools at their disposal if required.
As mentioned on numerous occasions, we are battletested, and crisis hardened at VEF and remained calm throughout. We have experienced, analysed and physically been involved in numerous banking crisis in our careers to date. VEF banks with tier one Swedish banks, where we keep our liquidity, along with tier one money market funds. From a portfolio standpoint, our companies had little or no exposure to SVB.
We continue to address this topic and provide fresh thoughts on how we think, and what we are doing about this in 2023. To repeat from our 3Q22 management letter; we hate trading at a discount to NAV. It pains us as VEF business builders and shareholders to see our stock trading at a deep discount to NAV. This is despite our very clear process to mark our portfolio to current market reality. We do understand the many reasons why an investment company like VEF can trade where it does at a point like this in the macro/market cycle, but we fundamentally disagree with it and will continue to do anything in our power to address it.
Our thoughts and actions include:
Increased transparency at portfolio level Alongside quarterly updates of performance released by Creditas, we share summary public updates across our portfolio to the market in a formal release each quarter. We are also sharing portfolio wide top line growth rates (historic and predicted) and path to profitability expectations across the portfolio in our quarterly results presentations.
Investor and Public Relations In 2022 and 1Q23, we remained on the front foot marketing the VEF story. We marketed in Europe, US and the Middle East with a host of investment banking partners helping us. We have a tier one through cycle investor base, and we intend to continue to broaden and deepen it through this opportune investment window.
All of the above is layered in off a strong fundamental business and investment case that is VEF. We are just working harder in this window to bring that case back front and centre. They say, take care of the business and the share price will take care of itself. Twenty-five years in markets tells us you have to work hard with the market, especially in times like these, to help achieve the price you deserve.
As a key input into fostering long-term returns for our investors, sustainability matters, ESG: environmental, social, and governance, are the cornerstones in building and growing VEF as an investment company and in our investment philosophy and process. As part of this journey, VEF issued SEK 500 mln of sustainability bonds in March 2022. We developed a Sustainability Framework for this bond in accordance with the Sustainability Bond Principles and the Green Bond Principles, both published in 2021 by the International Capital Markets Association (ICMA). Approximatively one year after issuing this debut sustainability bond, we issued our maiden bond allocation
and impact report – see here. We were happy to report that an amount equal to the gross proceeds from issued sustainability bonds were used to finance and refinance VEF's investments in companies that derive 90% or more of their revenues from one or several sustainable finance categories.
Specifically, as of end 1Q23, all the proceeds from the sustainability bonds have been allocated to four eligible companies:
With 2022 firmly in the rear-view mirror, we feel we layed the foundations for our next leg of success. 2023, as volatile as the start of the year has been, does feel better, and we have some early tail winds in our sails and renewed confidence for the year ahead. Having spent time on the ground with the majority of our portfolio and NAV in 1Q23, we have fresh confidence that we have a portfolio well placed to create a lot of long-term value for our patient shareholders. We look at our shares and where they are trading, and we see both a strong value and growth case to be made. On the pipeline front, there are encouraging signs that we are on the cusp of a fresh and positive investment vintage. At VEF, we invest in fintech across the emerging world, riding one of the strongest multi-year secular growth trends in some of the world's fastest-growing markets. Long a portfolio of quality emerging markets fintech holdings, while selectively shopping for new holdings, we are as well-positioned as ever to create long-term value for our shareholders.
April 2023, Dave Nangle
VEF's net asset value per share increased by 7.5% in USD over 1Q23, while VEF's share price in SEK decreased by 22.5%. During the same period, the MSCI Emerging Markets index* decreased by 16.9% in USD terms.
The Company has investments in money market funds and bonds as part of its liquidity management operations. As at March 31, 2023, the liquidity investments are valued at USD 37.2 mln.
| Company | Fair value Mar 31, 2023 |
Net invested amount |
Net investments/ divestments 1Q23 |
Change in fair value 1Q23 |
Fair value Dec 31, 2022 |
Valuation method |
|---|---|---|---|---|---|---|
| Creditas | 198,689 | 103,356 | – | 5,613 | 193,076 Mark-to-model | |
| Juspay | 62,822 | 21,083 | – | 15,351 | 47,471 Mark-to-model | |
| Konfío | 48,929 | 56,521 | – | 8,783 | 40,146 Mark-to-model | |
| Gringo | 20,577 | 12,250 | – | 8,327 | 12,250 Mark-to-model | |
| Solfácil | 20,000 | 20,000 | – | – | 20,000 Latest transaction | |
| TransferGo | 16,160 | 13,877 | – | -187 | 16,347 Mark-to-model | |
| Nibo | 9,491 | 6,500 | – | 2,674 | 6,817 Mark-to-model | |
| Rupeek | 8,551 | 13,858 | – | -6,644 | 15,195 Mark-to-model | |
| FinanZero | 8,119 | 5,163 | – | 34 | 8,085 Latest transaction 1 | |
| BlackBuck | 7,596 | 10,000 | – | 702 | 6,894 Mark-to-model | |
| Abhi | 7,585 | 1,798 | – | – | 7,585 Latest transaction | |
| JUMO | 2,173 | 14,614 | – | -149 | 2,322 Mark-to-model | |
| Mahaana | 1,000 | 1,000 | – | – | 1,000 Latest transaction | |
| minu | 483 | 450 | – | -58 | 541 Mark-to-model | |
| Magnetis | 354 | 6,668 | – | -2,283 | 2,637 Latest transaction | |
| Finja | 264 | 2,925 | – | -170 | 434 Mark-to-model | |
| REVO | 0 | 6,664 | – | – | 0 Mark-to-model | |
| Liquidity investments | 37,172 | 39,475 | -3,000 | 295 | 39,877 | |
| Investment portfolio | 449,965 | 336,202 | -3,000 | 32,288 | 420,677 | |
| Cash and cash equivalents | 8,506 | 8,612 | ||||
| Other net liabilities | -48,107 | -47,458 | ||||
| Total net asset value | 410,364 | 381,831 |
* The MSCI Emerging Markets Index is a free float weighted equity index that consists of indices in 24 emerging economies.
The investment portfolio stated at market value (KUSD) at March 31, 2023
14%
During the first quarter, we moved Juspay from a last transaction-based valuation to a model-based valuation approach. Juspay saw the largest uptick in dollar terms across the portfolio, delivering a 32% valuation uplift, or USD 15.4 mln. Continued underlying strong trends confirms our view on Juspay as one of our portfolio stars continuing to unlock value.
Juspay launched Hyperswitch: An open-source payment orchestration platform to boost merchant revenue
Juspay's Hyperswitch platform brings together various payment processors and acquirers worldwide, creating a seamless and secure payment experience for merchants. This open-source platform offers a reliable payment stack that enables merchants to increase their revenue while lowering their costs.
Rupeek and Federal Bank won the "Best Fintech Partnership/Start-up alliance of the year" Rupeek and Federal Bank's partnership has been recognized for their outstanding work in revolutionizing India's gold loan industry. The award highlights the team's hard work and dedication and strengthens their collaboration. Rupeek's gold loan service, supported by Federal Bank's extensive branch network, is changing the way India takes out gold loans.
Konfío upsizes their loan with Goldman Sachs and Gramercy to MXN 4.1 bln Konfío reaffirms commitment to Mexican SMEs with a two-year extension and increase of the credit line with Goldman Sachs and Gramercy, allowing for the granting of nearly 10,000 new loans.
The value of our position in Rupeek decreases by 44%, or USD 6.6 mln, QoQ to USD 8.6 mln in 1Q23 as we move it to mark-to-model valuation from its previous last round valuation. The 1Q23 valuation reflect a contraction in multiples compared to the last round valuation, as well as a downward revised revenue forecast to reflect the company's increased focus on reaching profitability.
During 1Q23, we moved our valuation methodology from a last transaction basis to a mark-to-model basis. With one of the strongest growth profiles during the quarter and a top performer across many other VC-portfolios, Gringo experienced the largest valuation uplift in percentage terms, 68%, and the third largest in dollar terms, USD 8.3 mln, driven to a large extent by positive moves in the listed peer group multiples. One year into this investment we remain strong supporters of Gringo and their delivery to date.
Solfácil is building a digital ecosystem for solar energy adoption in Brazil. It currently offers a digital solar panel marketplace and financing solutions on its platform, allowing Brazilian consumers and SMEs to finance and own their solar panels.
C round led by QED and also saw participation from SoftBank and existing investors. The round was subsequently extended to USD 130 mln with an additional USD 30 mln contribution from Fifth Wall in 2Q22.
Creditas is building an asset focused ecosystem that supports customers in three essential aspects: living (home), mobility (transport) and earning (salary) by providing fintech, insurtech and consumer solutions. One of LatAm's leading private fintech plays, Creditas is on a clear path towards IPO.
In 4Q22 VEF made a follow-on investment of USD 5 mln into Creditas as part of a convertible round taking the total invested amount in Creditas to USD 103 mln.
Founded in 2020, Gringo is building a "super-app" for drivers in Brazil and currently offers vehicle-documentation related services, credit and insurance solutions. Gringo is focused on improving drivers' vehicle ownership journey in Brazil, which is currently riddled with pain points driven by analogue processes, massive paperwork and broken legacy systems.
together with Piton Capital which also saw participation from existing investors.
Nibo is the leading accounting SaaS provider in Brazil, transforming the way accountants and SMEs interact. Nibo services over 400,000 SMEs through 4,200 accountants on their platform.
Since VEF's initial investment into Nibo in 2017 VEF made two follow-on investments in 2019 and 2020 and has in total invested USD 6.5 mln.
VEF stake: 5.4%
Share of VEF's portfolio:
0.1%
Fair value (USD): 0.4 mln
Fair value (USD): 62.8 mln
Fair value (USD): 8.6 mln
Share of VEF's portfolio: 1.9%
VEF stake: 2.3%
Share of VEF's portfolio: 14.0%
VEF stake: 10.2%
| Fair value (USD): 7.6 mln |
|
|---|---|
| Share of VEF's portfolio: 1.7% |
|
| VEF stake: 1.0% |
|
Magnetis is a digital investment advisor democratizing access to affordable and easy-touse investment management. Magnetis offers customers a simple, digital tool to manage their wealth.
Since 3Q17 VEF has invested USD 6.7 mln into Magnetis.
Juspay is India's leading payment technology company offering a unifying layer of products and value-added services to merchants, thereby enabling them to improve their conversion rates. Juspay has played a key role in India's payment transformation and is present on 300 mln+ smartphones and processing USD 100 bln+ annualized TPV.
VEF has made a cumulative investment of USD 21 mln into Juspay, investing USD 13 mln leading its broader Series B round in 2020 and investing USD 8 mln in its series C round in 2022.
Rupeek is one of India's leading asset-backed digital lending platform offering low interest rate doorstep gold loans and gold backed credit cards to consumers. Rupeek is building products to make credit accessible to Indian households, which hold over 25,000 tonnes of gold worth c. USD 1.5 tln.
In 2022, Rupeek raised an additional USD 49 mln in its Series E extension round led by Lightbox with a participation of USD 7 mln from VEF. In total VEF has invested USD 14 mln into Rupeek.
BlackBuck is the largest online trucking platform in India digitizing fleet operations for truckers (payments solutions around tolls and fuel) and operating a marketplace matching trucks with relevant loads. BlackBuck represents VEF's first investment in the 'embedded finance' space.
VEF made its initial USD 10 mln investment into BlackBuck in 3Q21.
Konfío builds digital banking and software tools to boost SME growth and productivity in Mexico through three core offerings: credit, payments, and SaaS.
in Konfío's USD 110 mln Series E2 round led by Tarsadia Capital in 3Q21.
minu is an employee financial wellness company offering a digital compensation and benefits platform to thousands of employees in Mexico. minu's platform provides benefits including insurance, telemedicine, financial education, savings and credit products, and minu's market-leading salary-on-demand offering. VEF made its initial investment of USD 0.5 mln into minu in 1Q21.
TransferGo provides low-cost, fast, reliable digital money transfer services to migrants across Europe, with customers paying up to 90% less compared by using banks and have their money delivered securely in minutes.
VEF first invested in TransferGo in 2Q16 and has invested a total of USD 13.9 mln into the company.
FinanZero is the leading online credit marketplace in Brazil, acting as an independent broker to give millions of customers access to credit from a network of over 70 lenders at the best rates and terms in the market in one search.
VEF made its initial investment into FinanZero in 2016, with the latest follow-on investment of USD 1 mln taking place in 2Q22.
VEF stake: 13.8%
Share of VEF's portfolio: 0.2%
Share of VEF's portfolio: 0.5%
| Fair value (USD): |
|---|
| 1.0 mln |
Fair value (USD):
| 2.2 mln | |
|---|---|
VEF stake: 21.2%
Share of VEF's portfolio: 0.0%
| Fair value (USD): |
|---|
| 0.3 mln |
VEF stake: 11.5%
| 1.7% | |
|---|---|
During 1Q23, no gross investments in financial assets have been made (1Q22: USD 32.2 mln).
Gross divestments in financial assets during 1Q23 were USD 3.0 mln, of which all relates to divestments in liquidity investments (1Q22: USD 30.0 mln).
VEF AB (publ)'s share capital per March 31, 2023, is distributed among 1,106,675,373 shares with a par value of SEK 0.01 per share. For more information on the share capital please refer to Note 5.
In August 2022, VEF announced that the Board of Directors had approved a new share buyback program based on the mandate from the annual general meeting of the Company on May 10, 2022.
The new buyback program allows VEF to buy shares for a maximum of USD 10 mln in total. The purpose of the buyback program is to allow the Company the flexibility to create additional shareholder value and optimize the Company's capital structure as and when deemed appropriate by reducing the Company's share capital. No share repurchases were made during 1Q23. As per March 31, 2023, the company holds 12,824,243 repurchased shares equivalent to USD 2.9 mln which are held in treasury by the Company.
During 1Q23, the result from financial assets at fair value through profit or loss amounted to USD 32.3 mln (1Q22: -21.7).
The first quarter broad-based recovery in financial markets had a positive impact on the financial results in 1Q23. On average peer valuation multiples were in positive territory through the quarter and combined with underlying portfolio performance was the key driver of overall NAV. On an aggregated level, portfolio performance remained strong, with moderated revenue growth a reflection of plans to reach break-even at a majority of portfolio companies.
The liquid assets of the Group, defined as cash and bank deposits, amounted to USD 8.5 mln on March 31, 2023 (YE22: 8.6). The Company also has placements in money market funds and bonds, as part of its liquidity management operations. As of March 31, 2023, the liquidity placements are valued at USD 37.2 mln (YE22: 39.9).
Finja is a digital lending platform for SMEs in Pakistan, providing small-ticket loans and invoice financing to kiryana stores and FMCG distributors to purchase inventory on credit. VEF has invested a total of USD 2.9 mln into Finja since 2016.
Abhi is a financial wellness company for businesses and their employees in Pakistan, offering earned wage access, invoice factoring and payroll solutions.
VEF led Abhi's Seed round in 2Q21 and has invested a total of USD 1.8 mln into the company, most recently participating in Abhi's Series A with an investment of USD 0.5 mln in 2Q22.
Mahaana is Pakistan's first digital wealth management company, building a platform to allow working class Pakistanis to better invest their savings and pensions in a market where the individual savings rate significantly lags peers.
VEF invested USD 1 mln into Mahaana as part of their seed round in 3Q22, co-leading the USD 2.1 mln round with SparkLabs Group and local strategic partner IGI Holdings.
JUMO is a full technology stack for financial services that enables partner banks to reach millions of new customers with credit and savings products at affordable prices whilst making predictable returns. JUMO provides a full range of infrastructure and services from core banking to underwriting, KYC and anti-fraud and recently achieved B Corporation certification.
In 4Q21 JUMO raised USD 120 mln from new and existing investors in a round led by Fidelity Management, Visa and Kingsway. VEF has invested a total of USD 14.6 mln in JUMO since 2015.
Africa
The parent company, VEF AB (publ), is the holding company of the Group. The net result for 1Q23 was SEK 69.9 mln (1Q22: -22.9). VEF AB (publ) is the parent of four wholly owned subsidiaries; VEF Cyprus Limited, VEF Fintech Ireland Limited, VEF Service AB (under liquidation) and VEF UK Ltd. VEF AB (publ) is the direct shareholder of three portfolio companies (BlackBuck, Juspay and Rupeek).
With 2022 behind, a year marked by market and sector headwinds, 2023 started on a more positive note with a broader recovery in financial markets – particularly in technology and fintech stocks. However, in March the Silicon Valley Bank crisis sparked the start of a broader distrust in the global banking system, putting negative pressure on many companies in the financial service sector. During 1Q23, the global fintech indices ARKF and FINX that VEF is tracking, experienced a positive development on average, with ARKF the outperformer of the two. Our key portfolio currencies were essentially flat during 1Q23, with some FX tailwind for BRL and MXN. Brazil, a VEF key market, saw inflation coming down for the eighth consecutive month in February, while the consensus is that the SELIC rate has peaked and should gradually start to come down by the end of the year. India, our second largest market, remains very strong and resilient to the current macro climate.
During the quarter VEF has continued to trade at a deep discount to our 4Q22 NAV, similar to many global peers and other listed fintech stocks. VEF's financial position remains comfortable with a solid balance sheet and a USD 45.7 mln cash position at the end of the quarter, expected to be more than sufficient to support current portfolio over the coming twelve-months period. Importantly, approximately 71% or our portfolio remains well funded and have the ability to reach break-even without additional funding, while the remaining 29% have a weighted cash runway of approximately 15 months. On a micro level, the negative impact in some of our portfolio names is for the most part market-related in the short to medium term, affecting their respective valuations and potentially their ability to raise additional capital further on.
| KUSD | Note | 1Q 2023 | 1Q 2022 |
|---|---|---|---|
| Result from financial assets at fair value through profit or loss | 4 | 32,288 | -21,721 |
| Coupon income | – | 97 | |
| Other income | – | 164 | |
| Administrative and operating expenses | -2,420 | -2,598 | |
| Operating result | 29,868 | -24,058 | |
| Financial income and expenses | |||
| Interest income | 5 | – | |
| Interest expense | -1,284 | -6 | |
| Currency exchange gains/losses, net | -146 | -60 | |
| Net financial items | -1,425 | -66 | |
| Result before tax | 28,443 | -24,124 | |
| Taxation | – | -1 | |
| Net result for the period | 28,443 | -24,125 | |
| Earnings per share, USD | 9 | 0.03 | -0.02 |
| Diluted earnings per share, USD | 9 | 0.03 | -0.02 |
The Group have no items to account for as other comprehensive income and therefore the net result for the period is equal to the total comprehensive
income for the period.
| KUSD | Note | Mar 31, 2023 | Dec 31, 2022 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Tangible non-current assets | |||
| Property, plant and equipment | 145 | 156 | |
| Total tangible non-current assets | 145 | 156 | |
| Financial non-current assets | |||
| Financial assets at fair value through profit or loss | 4 | ||
| Equity financial assets | 412,792 | 380,800 | |
| Liquid financial assets | 37,172 | 39,877 | |
| Other financial assets | 34 | 32 | |
| Total financial non-current assets | 449,998 | 420,709 | |
| CURRENT ASSETS | |||
| Tax receivables | 71 | 64 | |
| Other current receivables | 165 | 449 | |
| Prepaid expenses | 208 | 104 | |
| Cash and cash equivalents | 8,506 | 8,612 | |
| Total current assets | 8,950 | 9,229 | |
| TOTAL ASSETS | 459,093 | 430,094 | |
| SHAREHOLDERS' EQUITY (including net result for the financial period) | 410,364 | 381,831 | |
| NON-CURRENT LIABILITIES | |||
| Long-term liabilities | 6 | 47,284 | 46,979 |
| Total non-current liabilities | 47,284 | 46,979 | |
| CURRENT LIABILITIES | |||
| Accounts payable | 105 | 76 | |
| Other current liabilities | 187 | 241 | |
| Accrued expenses | 1,153 | 967 | |
| Total current liabilities | 1,445 | 1,284 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 459,093 | 430,094 |
| KUSD | Note | Share capital |
Additional paid in capital |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Balance at Jan 1, 2022 | 1,308 | 97,440 | 662,980 | 761,728 | |
| Net result for the period | – | – | -377,359 | -377,359 | |
| Value of employee services: | |||||
| - Employee share option scheme | – | 12 | – | 12 | |
| - Share based long-term incentive program | 10 | 350 | – | 360 | |
| Buyback of own shares | – | -2,910 | – | -2,910 | |
| Balance at Dec 31, 2022 | 1,318 | 94,892 | 285,621 | 381,831 | |
| Balance at Jan 1, 2023 | 1,318 | 94,892 | 285,621 | 381,831 | |
| Net result for the period | – | – | 28,443 | 28,443 | |
| Value of employee services: | |||||
| - Employee share option scheme | 7 | – | 4 | – | 4 |
| - Share based long-term incentive program | 8 | – | 86 | – | 86 |
| Balance at Mar 31, 2023 | 1,318 | 94,982 | 314,064 | 410,364 |
| Value of employee services: |
|---|
| Value of employee services: |
| KUSD | 1Q 2023 | 1Q 2022 |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Result before tax | 28,443 | -24,124 |
| Adjustment for non-cash items: | ||
| Interest income and expense, net | 1,279 | 6 |
| Currency exchange gains/-losses, net | 146 | 60 |
| Depreciations | 11 | 24 |
| Result from financial assets at fair value through profit or loss | -32,288 | 21,721 |
| Other non-cash items affecting profit or loss | 91 | 91 |
| Adjustment for cash items: | ||
| Coupon income | – | -97 |
| Change in current receivables | 86 | -41 |
| Change in current liabilities | 185 | -160 |
| Adjustments of cash flow in operating activities | -2,047 | -2,520 |
| Investments in financial assets | – | -32,250 |
| Sales of financial assets | 3,000 | 30,000 |
| Coupon income | – | 97 |
| Interest received | 5 | – |
| Net cash flow from/used in operating activities | 958 | -4,673 |
| FINANCING ACTIVITIES | ||
| Interest paid on sustainability bonds | -1,113 | – |
| Proceeds from new share issue through employee options | – | -4 |
| Net cash flow used in financing activities | -1,113 | -4 |
| Cash flow for the period | -155 | -4,677 |
| Cash and cash equivalents at beginning of the period | 8,612 | 11,131 |
| Exchange gains/losses on cash and cash equivalents | 49 | -74 |
| Cash and cash equivalents at end of the period | 8,506 | 6,380 |
Alternative Performance Measures (APMs) are financial measures other than financial measures defined or specified by International Financial Reporting Standards (IFRS) and have been issued by the European Securities and Markets Authority (ESMA).
VEF regularly uses alternative performance measures to enhance comparability from period to period and to give deeper information and provide meaningful supplemental information to analysts, investors, and other parties.
It is important to know that not all companies calculate alternative performance measures identically, therefore these measurements have limitations and should not be used as a substitute for measures of performance in accordance with IFRS.
Below you find our presentation of the APMs. For more information on how the APMs are calculated, see Note 9.
| Note | Mar 31, 2023 | Dec 31, 2022 | |
|---|---|---|---|
| Equity ratio | 9 | 89.4% | 88.8% |
| Net asset value, USD | 9 | 410,363,778 | 381,830,589 |
| Exchange rate at balance sheet date, SEK/USD | 10.38 | 10.43 | |
| Net asset value/share, USD | 9 | 0.39 | 0.37 |
| Net asset value/share, SEK | 9 | 4.09 | 3.82 |
| Net asset value, SEK | 9 | 4,261,084,863 | 3,981,466,381 |
| Share price, SEK | 1.90 | 2.45 | |
| Traded premium/discount to NAV | 9 | -53.5% | -35.8% |
| Weighted average number of shares for the financial period | 9 | 1,041,865,735 | 1,045,052,785 |
| Weighted average number of shares for the financial period, fully diluted | 9 | 1,041,865,735 | 1,045,052,785 |
| Number of shares at balance sheet date | 9 | 1,041,865,735 | 1,041,865,735 |
| Number of shares at balance sheet date, fully diluted | 9 | 1,041,865,735 | 1,041,865,735 |
| KSEK | 1Q 2023 | 1Q 2022 |
|---|---|---|
| Result from financial assets at fair value through profit or loss | 95,807 | -7,229 |
| Coupon income | – | 930 |
| Administrative and operating expenses | -13,177 | -15,474 |
| Operating result | 82,630 | -21,773 |
| Financial income and expenses | ||
| Interest income | 11 | – |
| Interest expense | -13,165 | – |
| Currency exchange gains/losses, net | 374 | -1,146 |
| Net financial items | -12,780 | -1,146 |
| Result before tax | 69,850 | -22,919 |
| Taxation | – | – |
| Net result for the period | 69,850 | -22,919 |
The Parent Company have no items to account for as other comprehensive income and therefore the net result for the period is equal to the total comprehensive income for the period.
| KSEK | Note | Mar 31, 2023 | Dec 31, 2022 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Financial non-current assets | |||
| Shares in subsidiaries | 2,411,208 | 2,400,800 | |
| Financial assets at fair value through profit or loss | |||
| Equity financial assets | 819,989 | 725,327 | |
| Liquid financial assets | 385,983 | 415,811 | |
| Other financial assets | 50 | 50 | |
| Total financial non-current assets | 3,617,230 | 3,541,988 | |
| CURRENT ASSETS | |||
| Tax receivables | 311 | 245 | |
| Other current receivables | 1,598 | 4,310 | |
| Other current receivables, Group | 17,483 | 9,746 | |
| Prepaid expenses | 996 | 956 | |
| Cash and cash equivalents | 70,942 | 74,592 | |
| Total current assets | 91,330 | 89,849 | |
| TOTAL ASSETS | 3,708,560 | 3,631,837 | |
| SHAREHOLDERS' EQUITY (including net result for the financial period) | 5 | 3,199,463 | 3,128,670 |
| NON-CURRENT LIABILITIES | |||
| Long-term liabilities | 6 | 490,000 | 488,750 |
| Total non-current liabilities | 490,000 | 488,750 | |
| CURRENT LIABILITIES | |||
| Accounts payable | 835 | 649 | |
| Other current liabilities, Group | 5,566 | 2,442 | |
| Other current liabilities | 988 | 1,463 | |
| Accrued expenses | 11,708 | 9,863 | |
| Total current liabilities | 19,097 | 14,417 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 3,708,560 | 3,631,837 |
| KSEK | Note | Share capital |
Additional paid in capital |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Balance at Jan 1, 2022 | 10,963 | 849,376 | 2,272,233 | 3,132,572 | |
| Net result for the period | – | – | 23,969 | 23,969 | |
| Value of employee services: | |||||
| - Employee share option scheme | – | 122 | – | 122 | |
| - Share based long-term incentive program | 104 | 3,590 | – | 3,694 | |
| Buyback of own shares | – | -31,687 | – | -31,687 | |
| Balance at Dec 31, 2022 | 11,067 | 821,401 | 2,296,202 | 3,128,670 | |
| Balance at Jan 1, 2023 | 11,067 | 821,401 | 2,296,202 | 3,128,670 | |
| Net result for the period | – | – | 69,850 | 69,850 | |
| Value of employee services: | |||||
| - Employee share option scheme | 7 | – | 41 | – | 41 |
| - Share based long-term incentive program | 8 | – | 902 | – | 902 |
| Balance at Mar 31, 2023 | 11,067 | 822,344 | 2,366,052 | 3,199,463 |
(Expressed in KUSD unless indicated otherwise)
VEF AB (publ) was incorporated as a shelf company on December 7, 2020, but changed name to VEF AB (publ) and became active on May 28, 2021. The registered office is at Mäster Samuelsgatan 1, 111 44 Stockholm, Sweden. The common shares of VEF AB (publ) are listed on Nasdaq Stockholm Main Market with the ticker VEFAB. The common shares of VEF AB (publ) replaced the Swedish Depository Receipts representing shares in VEF Ltd. With effect as from July 5, 2021, in connection with the transfer of domicile of the group from Bermuda to Sweden.
As of March 31, 2023, the VEF Group consists of the Swedish Parent Company VEF AB (publ) and four wholly owned subsidiaries; VEF Cyprus Limited, VEF Fintech Ireland Limited, VEF Service AB (under liquidation), and VEF UK Ltd. VEF Cyprus Limited act as the main investment vehicle for the group, holding fourteen of seventeen investments at balance date. VEF AB (publ) holds the remaining three (BlackBuck, Juspay and Rupeek) and act as a service company, together with VEF Fintech Ireland Limited and VEF UK Ltd, providing business and investment support services to the Group. The financial year is January 1–December 31.
The Parent Company VEF AB (publ) is a Swedish limited liability company, incorporated in Sweden and operating under Swedish law. VEF AB (publ) is the holding company of the Group and directly owns all the companies in the Group. The net result for 1Q23 was SEK 69.9 mln (1Q22: -22.9). VEF AB (publ) was incorporated on December 7, 2020, and became active on May 28, 2021. The parent company has four employees per March 31, 2023.
This interim report has, for the Group, been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The financial reporting for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for legal entities, issued by the Swedish Financial Reporting Board. Under Swedish company regulations it is not allowed to report the Parent Company results in any other currency than SEK or EUR and consequently the Parent Company's financial information is reported in SEK and not the Group's reporting
currency of USD.
The accounting principles in the 2022 Annual Report sets out the principles for the Group and the Parent company.
For a detailed account of risks associated with investing in VEF and VEF's business, please see the 2022 Annual Report, Note 2.
Related party transactions for the period are of the same character as described in the 2022 Annual Report. During the period VEF has recognized the following related party transactions:
| Operating expenses | Current liabilities | |||
|---|---|---|---|---|
| 1Q 2023 | 1Q 2022 | Mar 31, 2023 | Mar 31, 2022 | |
| Key management and Board of Directors ¹ | 1,168 | 1,708 | – | – |
members.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry company, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to determine the fair value of an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Investments in assets that are not traded on any market will be held at fair value determined by recent transactions made at prevailing market conditions or different valuation models depending on the characteristics of the company as well as the nature and risks of the investment. These different techniques may include discounted cash flow valuation (DCF), exit-multiple valuation also referred to as leveraged buyout (LBO) valuation, asset-based valuation as well as forward looking multiples valuation based on comparable traded companies (peer companies). Usually, transaction-based valuations are kept unchanged for a period of twelve months unless there is cause for a significant change in valuation. After twelve months, the fair value for non-traded assets will normally be derived through any of the models described above.
The validity of valuations based on a transaction is inevitably eroded over time, since the price at which the investment was made reflects the conditions that existed on the transaction date. At each reporting date, possible changes or events subsequent to the relevant transaction are assessed and if this assessment implies a change in the investment's fair value, the valuation is adjusted accordingly. The transaction-based valuations are also frequently assessed using multiples of comparable traded companies for each unlisted investment or other valuation models when warranted.
VEF follows a structured process in assessing the valuation of its unlisted investments. VEF evaluates company specific and external data relating to each specific investment on an ongoing basis. The data is then assessed at quarterly valuation meetings by senior management. If internal or external factors are deemed to be significant, further assessment is undertaken and the specific investment is revalued to the best fair value estimate. Revaluations are first reviewed by the audit committee and later approved by the Board in connection with the Company's financial reports.
The fair value of financial instruments is measured by level of the following fair value measurement hierarchy:
Investments are moved between levels in the fair value hierarchy when the management finds the best suitable valuation technique has changed and that the current applied technique results in a new classification in the fair value hierarchy compared to the prior period. As per March 31, 2023, VEF has a liquidity management portfolio of listed corporate bonds and money market funds that
are classified as Level 1 investments.
The investments in Creditas, Juspay, Konfío, Gringo, TransferGo, Nibo, Rupeek, BlackBuck, JUMO, minu, Finja and REVO are classified as Level 3 investments. The remaining portfolio companies are classified as Level 2 investments. During the quarter, Juspay, Gringo and Rupeek have been transferred from Level 2 to Level 3 and Magnetis has been transferred from Level 3 to Level 2.
| Mar 31, 2023 | Dec 31, 2022 | |
|---|---|---|
| Opening balance Jan 1 | 269,214 | 25,794 |
| Transfers from Level 2 to Level 31 | 74,916 | 605,712 |
| Transfers from Level 3 to Level 21 | -2,637 | – |
| Change in fair value | 34,242 | -362,292 |
| Closing balance | 375,735 | 269,214 |
| Level 1 | Level 2 | Level 3 | Total balance | |
|---|---|---|---|---|
| Financial assets at fair value through profit or loss | 37,172 | 37,058 | 375,735 | 449,965 |
| of which: | ||||
| Liquidity placements | 37,172 | – | – | 37,172 |
| Shares | – | 37,058 | 356,273 | 393,331 |
| Convertibles and SAFE notes | – | – | 17,462 | 17,462 |
| Total assets | 37,172 | 37,058 | 375,735 | 449,965 |
| of which: | |
|---|---|
| Level 1 | Level 2 | Level 3 | Total balance | |
|---|---|---|---|---|
| Financial assets at fair value through profit or loss | 39,877 | 111,586 | 269,214 | 420,677 |
| of which: | ||||
| Liquidity placements | 39,877 | – | – | 39,877 |
| Shares | – | 111,586 | 251,085 | 362,671 |
| Convertibles and SAFE notes | – | – | 18,129 | 18,129 |
| Total assets | 39,877 | 111,586 | 269,214 | 420,677 |
| Company | Valuation method | Date latest transaction |
|---|---|---|
| Abhi | Latest transaction | 2Q22 |
| FinanZero | Latest transaction | 2Q22 |
| Magnetis | Latest transaction | 1Q23 |
| Mahaana | Latest transaction | 3Q22 |
| Solfácil | Latest transaction | 2Q22 |
Holdings classified as Level 2 investments are valued based on the latest transaction in the company, on market terms. The validity of valuations based on a transaction is inevitably eroded over time, since the price at which the investment was made reflects the conditions that existed on the transaction date. At each reporting date, possible changes or events subsequent to the relevant transaction are assessed and if this assessment implies a change in the investment's fair value, the valuation is adjusted accordingly. The transaction-based valuations are frequently assessed using multiples of comparable traded companies for each unlisted investment or other valuation models. When transaction-based valuations of unlisted holdings are used, no material event is deemed to have occurred in the specific portfolio company that would suggest that the transaction-based value is no longer valid. During 1Q23, key portfolio currencies essentially remained flat, with some tailwind for BRL and MXN. The majority of the holdings valued on the basis of the latest transactions demonstrate strong revenue growth profiles and are set to deliver growth broadly in line with their respective business plans on which the latest transaction was based.
Creditas, Juspay, Konfío, Gringo, TransferGo, Rupeek, Nibo, BlackBuck, JUMO, minu and Finja are all valued on the basis of a twelve-months forward looking revenue multiple. REVO's valuation model, in light of the geo-political situation in Russia, was assigned a liquidity discount of 100% in 1Q22, bringing the fair value to zero which remains in 1Q23. Inputs used for each valuation include risk adjusted revenue- and earnings forecasts, local currency moves and listed peer group revenue multiples as of March 31, 2023.
The difference in fair value change between the portfolio companies is dependent on relative revenue forecasts in each company as well as moves in the relevant peer group and moving exchange rates. Peers used in the 1Q23 peer set include a mix of listed emerging- and developed market companies representing accounting SaaS and BNPL companies, fast growth payments companies and a range of Latin American fintech companies. The NTM multiples across the different peer groups per company and valuation range from 0.3x to 22.6x NTM revenues. As a standard process, the median of each group is used, and in applicable cases VEF will adjust the resulting multiple based on prevailing local market conditions, sector and company specific factors, applying discounts or premiums to reflect the fair value of the company.
| Company | Valuation method | Peer group range | -15% | -10% | -5% | 0% | +5% | +10% | +15% |
|---|---|---|---|---|---|---|---|---|---|
| Creditas | Revenue multiple | 0.3–5.2x | 171,869 | 180,809 | 189,749 | 198,689 | 207,629 | 216,569 | 225,509 |
| Juspay | Revenue multiple | 4.0–22.6x | 54,202 | 57,075 | 59,949 | 62,822 | 65,695 | 68,569 | 71,442 |
| Konfío | Revenue multiple | 0.3–5.2x | 43,233 | 45,132 | 47,030 | 48,929 | 50,828 | 52,726 | 54,625 |
| Gringo | Revenue multiple | 4.3–22.2x | 17,785 | 18,716 | 19,646 | 20,577 | 21,508 | 22,438 | 23,369 |
| TransferGo Revenue multiple | 2.4–3.1x | 13,985 | 14,710 | 15,435 | 16,160 | 16,885 | 17,610 | 18,335 | |
| Nibo | Revenue multiple | 6.0–9.2x | 8,179 | 8,616 | 9,053 | 9,491 | 9,928 | 10,365 | 10,802 |
| Rupeek | Revenue multiple | 2.1–12.3x | 7,282 | 7,705 | 8,128 | 8,551 | 8,974 | 9,396 | 9,819 |
| BlackBuck Revenue multiple | 5.1–5.5x | 6,540 | 6,892 | 7,244 | 7,596 | 7,948 | 8,300 | 8,652 | |
| JUMO | Revenue multiple | 2.6–11.0x | 1,831 | 1,945 | 2,059 | 2,173 | 2,287 | 2,402 | 2,516 |
| minu | Revenue multiple | 1.8–7.1x | 398 | 426 | 454 | 483 | 511 | 539 | 567 |
| Finja | Revenue multiple | 0.5–12.3x | 243 | 250 | 257 | 264 | 272 | 279 | 286 |
| Company | Jan 1, 2023 | Investments/ (divestments), net |
Fair value change |
Mar 31, 2023 | Percentage of portfolio |
VEF ownership stake |
|---|---|---|---|---|---|---|
| Creditas | 193,076 | – | 5,613 | 198,689 | 44.1% | 8.5% |
| Juspay | 47,471 | – | 15,351 | 62,822 | 14.0% | 10.2% |
| Konfío | 40,146 | – | 8,783 | 48,929 | 10.9% | 10.3% |
| Gringo | 12,250 | – | 8,327 | 20,577 | 4.6% | 10.2% |
| Solfácil | 20,000 | – | – | 20,000 | 4.4% | 2.6% |
| TransferGo | 16,347 | – | -187 | 16,160 | 3.6% | 12.5% |
| Nibo | 6,817 | – | 2,674 | 9,491 | 2.1% | 20.1% |
| Rupeek | 15,195 | – | -6 644 | 8,551 | 1.9% | 2.3% |
| FinanZero | 8,085 | – | 34 | 8,119 | 1.8% | 19.0% |
| BlackBuck | 6,894 | – | 702 | 7,596 | 1.7% | 1.0% |
| Abhi | 7,585 | – | – | 7,585 | 1.7% | 11.5% |
| JUMO | 2,322 | – | -149 | 2,173 | 0.5% | 4.5% |
| Mahaana | 1,000 | – | – | 1,000 | 0.2% | 13.8% |
| minu | 541 | – | -58 | 483 | 0.1% | 1.2% |
| Magnetis | 2,637 | – | -2,283 | 354 | 0.1% | 5.4% |
| Finja | 434 | – | -170 | 264 | 0.0% | 21.2% |
| REVO | 0 | – | – | 0 | 0.0% | 23.0% |
| Liquidity investments | 39,877 | -3,000 | 295 | 37,172 | 8.3% | – |
| Total | 420,677 | -3,000 | 32,288 | 449,965 | 100.0% |
Per March 31, 2023, a total of 1,000,000 options are outstanding. None to the Managing Director and 1,000,000 to other employees.
| Option grant date | May 16, 2018 | Dec 17, 2019 |
|---|---|---|
| Maturity date | Aug 16, 2023 | Dec 17, 2024 |
| Option price at grant date, SEK | 0.41 | 0.34 |
| Share price at grant date, SEK | 1.97 | 2.95 |
| Exercise price, SEK | 2.35 | 3.69 |
| Volatility | 29.90% | 22.80% |
| Risk free interest rate | -0.13% | -0.29% |
| No. of options granted | 500,000 | 500,000 |
For more information on the option plan, please see Note 8 in the 2022 Annual Report.
During 2Q22, VEF issued sustainability bonds of three years, to the amount of SEK 500 mln, within a frame of SEK 1,000 mln. The bonds carry a floating coupon of 3m Stibor + 725 bps with interest paid quarterly. The bonds are due in April 2025. The bonds are trading on the sustainable bond list of Nasdaq Stockholm and the Open Market of the Frankfurt Stock Exchange.
VEF AB (publ)'s share capital per March 31, 2023, is distributed among 1,106,675,373 shares with a par value of SEK 0.01 per share as set out in the table below. Each share of the Company carries one vote. The common shares trade on Nasdaq Stockholm Main Market, Mid Cap-segment.
The convertible shares of Class C 2020, Class C 2021 and Class C 2022 are held by management and key personnel of VEF under the Company's long-term incentive programs. The Class C shares are redeemable pursuant to the terms set out in VEF's articles of association.
As per March 31, 2023, VEF holds 12,824,243 repurchased shares in accordance with the buyback program based on the mandate from the annual general meeting of the Company on May 10, 2022.
| Share class | Number of shares | Number of votes Share capital (SEK) | |
|---|---|---|---|
| Common shares1 | 1,054,689,978 | 1,054,689,978 | 10,546,899.78 |
| Class C 2020 | 33,250,000 | 33,250,000 | 332,500.00 |
| Class C 2021 | 8,312,500 | 8,312,500 | 83,125.00 |
| Class C 2022 | 10,422,895 | 10,422,895 | 104,228.95 |
| Total | 1,106,675,373 | 1,106,675,373 | 11,066,753.73 |
| LTIP 2020 | LTIP 2021 | LTIP 2022 | |
|---|---|---|---|
| Performance measurement period | Jan 2020–Dec 2024 | Jan 2021–Dec 2025 | Jan 2022–Dec 2026 |
| Vesting period | Nov 2020–Dec 2024 Sept 2021–Dec 2025 Aug 2022–Dec 2024 | ||
| Maximum no of shares, Managing Director | 13,300,000 | 3,325,000 | 3,325,000 |
| Maximum no of shares, others | 19,950,000 | 4,987,500 | 7,097,895 |
| Maximum no of shares, total | 33,250,000 | 8,312,500 | 10,422,895 |
| Maximum dilution | 3.19% | 0.80% | 1.00% |
| Share price on grant date, SEK | 3.14 | 4.34 | 2.306 |
| Share price on grant date, USD | 0.36 | – | – |
| Plan share price on grant date, SEK1 | 0.37 | 0.62 | 0.10 |
| Plan share price on grant date, USD1 | 0.04 | – | – |
| Total employee benefit expense excl. bonuses paid and social taxes |
LTIP 2020 2 | LTIP 2021 2 | LTIP 2022 2 |
| 2023 | 49 | 28 | 10 |
| 2022 | 204 | 131 | 14 |
| 2021 | 201 | 22 | – |
| 2020 | 31 | – | – |
| Total accumulated | 485 | 181 | 24 |
There are three running LTIP programs for management and key personnel in the VEF Group. All three running programs, LTIP 2020, 2021 and 2022 are linked to the long-term performance of both the Company's NAV and of the VEF share price. For more information on the LTIPs, please see Note 8 in the 2022 Annual Report.
The difference in common share price and plan share price derive from that plan share price has been calculated using the Monte Carlo method applying the performance criterias applicable in the terms for the long-term incentive programme and the current share price at grant date.
The total IFRS 2 expense does not include subsidy for acquisition and taxes arisen.
Result for the period divided with the average number of outstanding common shares. Class C shares issued to participants under the Company's LTIP are not treated as outstanding common shares and thus are not included in the weighted calculation, but they are however recognized as an increase in shareholder's equity. Repurchased common shares held in treasury by the Company is neither included in the calculation.
When calculating diluted earnings per share, the average number of common shares is adjusted to consider the effects of potential dilutive common shares that have been offered to employees, originating during the reported periods from sharebased incentive programs. Dilutions from share-based incentive programs affect the number of shares and only occur when the incentive program performance conditions of the respective programs are fulfilled.
| 1Q 2023 | 1Q 2022 | ||
|---|---|---|---|
| Earnings per share, USD | |||
| Weighted average number of shares | 1,041,865,735 1,042,289,978 | ||
| Result for the period | 28,442,611 | -24,125,268 | |
| Earnings per share, USD | 0.03 | -0.02 | |
| Diluted earnings per share, USD | |||
| Diluted weighted average number of shares |
1,041,865,735 1,042,642,295 | ||
| Result for the period | 28,442,611 | -24,125,268 | |
| Diluted earnings per share, USD | 0.03 | -0.02 | |
VEF's financial report for the period January 1, 2023–June 30, 2023, will be published on July 19, 2023. VEF's financial report for the period January 1, 2023–September 30, 2023, will be published on October 25, 2023. VEF's financial report for the period January 1, 2023–December 31, 2023, will be published on January 24, 2024.
April 19, 2023
David Nangle Managing Director
This information is information that VEF AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 2023-04-19 08:00 CEST.
For further information, visit vef.vc or contact:
Henrik Stenlund CFO Tel +46 8 545 015 50 Email [email protected]
This report has not been subject to review by the Company's auditors.
No significant events after the end of the period.
Shareholders' equity in percent in relation to total assets.
Net value of all assets on the balance sheet, equal to the shareholders' equity.
Net asset value/share is defined as shareholders' equity divided by total number of shares outstanding at the end of the period.
Traded premium/discount to NAV is defined as the share price divided to the net asset value/share.
Total number of outstanding common shares at balance day. Class C shares issued to participants under the Company's LTIP are not treated as outstanding common shares and thus are not included in the calculation, but they are however recognized as an increase in shareholder's equity. Repurchased common shares held in treasury by the Company is neither included in calculation.
When calculating the number of shares outstanding fully diluted, the number of common shares outstanding is adjusted to consider the effects of potential dilutive common shares that have been offered to employees, originating during the reported periods from share-based incentive programs. Dilutions from share-based incentive programs affect the number of shares and only occur when the incentive program performance conditions of the respective programs are fulfilled.
– reconciliation tables
| Mar 31, 2023 Dec 31, 2022 | ||
|---|---|---|
| Equity ratio | ||
| Net asset value/shareholders equity, USD | 410,363,778 | 381,830,589 |
| Total assets, USD | 410,636,778 430,093,844 | |
| Equity ratio | 89.4% | 88.8% |
| Net asset value, USD | 410,363,778 | 381,830,589 |
| Net asset value, SEK | ||
| Net asset value, USD | 410,363,778 | 381,830,589 |
| SEK/USD | 10.38 | 10.43 |
| Net asset value, SEK | 4,261,084,863 3,981,466,381 | |
| Net asset value/share, USD | ||
| Net asset value, USD | 410,363,778 | 381,830,589 |
| Number of outstanding shares | 1,041,865,735 1,041,865,735 | |
| Net asset value/share, USD | 0.39 | 0.37 |
| Net asset value/share, SEK | ||
| Net asset value, USD | 410,363,778 | 381,830,589 |
| SEK/USD | 10.38 | 10.43 |
| Net asset value, SEK | 4,261,084,863 3,981,466,381 | |
| Number of outstanding shares | 1,041,865,735 1,041,865,735 | |
| Net asset value/share, SEK | 4.09 | 3.82 |
| Premium/discount(–) to NAV | ||
| Net asset value, USD | 410,363,778 | 381,830,589 |
| SEK/USD | 10.38 | 10.43 |
| Net asset value, SEK | 4,261,084,863 3,981,466,381 | |
| Number of outstanding shares | 1,041,865,735 1,041,865,735 | |
| Net asset value/share, SEK | 4.09 | 3.82 |
| Share price, SEK | 1.90 | 2.45 |
| Premium/discount(–) to NAV | -53.5% | -35.8% |
Portfolio value
Total book value of financial assets held at fair value through profit and loss.
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