VNV Global : Nine-Month Report 2021

VNV Global AB (publ) Financial Report

for the Third Quarter and the First Nine Months 2021

Financial Report for the Third Quarter and the First Nine Months 2021

02

Net asset value (NAV) and financial results for the nine-month period 2021

The VNV Global AB (publ) ("VNV Global") group's net asset value was USD 1,490.38 million (mln) on September 30, 2021 (December 31, 2020: 1,080.23), corresponding to USD 14.02 per share (December 31, 2020: 11.36). Given a SEK/USD exchange rate of 8.7378 the NAV was SEK 13,022.59 mln (December 31, 2020: 8,833.34) and SEK 122.50 per share (December 31, 2020: 92.91), respectively.

The group's NAV per share in USD increased by 25.31%.

Net result for the period was USD 276.95 mln (January 1, 2020-September 30, 2020: 29.64). Earnings per share were USD 2.65 (0.35).

Financial results for the third quarter 2021

Net result for the quarter was USD 149.45 mln (38.33). Earnings per share were USD 1.41 (0.42).

Key events during the quarter

July 1, 2021-September 30, 2021

During the third quarter of 2021, VNV Global invested a total of USD 65.7 mln, mainly in Olio (USD 13.9 mln), Breadfast (USD 7.0 mln), Collectiv Food (USD 6.8 mln) and other scout investments (USD 6.6 mln).

In July 2021, VNV Global invested GBP 4.9 mln as part of a 12 mln series A round in Collectiv Food. Collectiv Food is a B2B food marketplace that supplies a range of food retailers, from restaurants, to catering firms and dark kitchens with food and beverage products from thousands of different producers.

On July 21, 2021, VNV Global completed the sale of all of its shares in Wallapop for a total consideration of USD 11.8 mln (EUR 10 mln).

On July 27, 2021, Victoria Grace resigned from the Board of Directors of VNV Global at her own request, citing a looming conflict of interest. Victoria will continue to serve as VNV Global's representative on select portfolio company boards on a consultancy basis.

On July 28, 2021, VNV Global announced that its portfolio company Swvl had entered into a SPAC merger agreement with Queen's Gambit Growth Capital to become publicly traded, resulting in an expected NAV increase of SEK 8.1 per share compared to the 2Q21 NAV.

On August 6, 2021, VNV Global announced that its portfolio company Voi had raised additional funding, resulting in an expected NAV increase of SEK 7.6 per share compared to the 2Q21 NAV.

Key events after the end of the period

On October 8, 2021, VNV Global announced that its portfolio company Babylon had secured a sustainability -linked investment of up to USD 200 mln from AlbaCore Capital Group in the form of notes and warrants. The investment is subject to the completion of Babylon's SPAC merger transaction with Alkuri Global Acquisition Corp.

On October 21, 2021, VNV Global announced that its portfolio company completed its business combination with Alkuri Global Acquisition Corp. The transaction was approved on October 20, 2021, by Alkuri's shareholders. Babylon's shares of Class A common stock and its warrants will begin trading on the New York Stock Exchange ("NYSE") on October 22, 2021, under the new ticker symbols "BBLN" and "BBLN.W", respectively.

The Company will hold a telephone conference with an interactive presentation at 15:30 CEST (09:30 a.m. EDT) Friday, October 22. For call-in details, see separate press release issued Wednesday, October 20, at www.vnv.global.

Financial Report for the Third Quarter and the First Nine Months 2021

03

Management report

	Dear all,
	Is it just me or do you not feel these quarters pass
	quicker and quicker? I am super humble that I have
	spent most of this Covid period in Sweden, where
	there has basically been no lockdown compared to
	most places, and that being locked up in your flat for a
	looong period of time probably will have felt like time
	was passing very slowly. This period though has of
	course accelerated the move to digital enormously and
	the pace of the world we work in at VNV Global has
	picked up… a lot… I guess partly explaining why it feels
	like 5 minutes ago when I was writing the last intro to a
	quarterly report.
Per Brilioth	This is also good pointer to a fact that has been evi-
dent for a while but which struck me or I got reminded
Managing Director	of recently when Voi clocked the three-year mark since
Photo: Tobias Ohls	it had its first scooter on the street. Voi is a 3 year-old
	company!!! This is a company that is a European leader
	in a very fast-growing micro mobility space, has serious
	revenues, is active across 65 cities, has nearly 1,000
	employees dealing with everything from being at the
	forefront of product development to managing a very
	large fleet of connected scooters to being world class
	in funding to a ton of other things. And it is 3 years old!!
	If this was 10 or even 5 years ago only a 15-year-old
	company could have reached this stage.
	Companies grow up so much quicker today. Access
	to capital helps but it is not the only factor. Technology
	and people are probably equally important. I was speak-
	ing to one of the greatest founders I know (now turned
	investor who we are very happy to be involved with)
	and he told me of how when he got going a decade or
	so ago he spent his time carrying servers up and down
	the house and building a search engine because there
	simply wasn't any available. Today a founder of a startup
	has access to AWS (Amazon Web Services) and many
	others, through a few clicks and can download a search
	engine in an instant, probably spending like 15 minutes
	on something that took 6 months those decades ago.
	And people. I remember when we started funding
	entrepreneurs in the mid 2000s even in the developed
	world there was a lack of experience, let alone in
	emerging markets. Today places like Stockholm (and
	Moscow and Cairo and many others) have eco systems
	of people who started out at a large tech firm, left to
	start their own business, has sold that and started yet
	another. A completely different wealth of experience of
	what it takes to set up and run a company.
	Access to capital, technology and experienced
	people allows companies to grow up so much faster,
	something that I believe will keep on accelerating.

I think Voi is a great example of many many things, but also how our portfolio works. If you look at the structure of it today, six companies make up some 3/4 of the portfolio, then there are four or so that are large enough to show up as names but the bulk of the 65 odd names in the portfolio are grouped together in "Others", simply because at this stage they are too small individually. Take the experience of Voi though and it is not an outlier bet that many of these will grow up much faster than we think and hence also become much more meaningful in our portfolio.

I am a strong believer in our strategy of being an early backer of founders and their companies (although we do also get involved in companies at more mature stages - we have some really exciting stuff in the pipeline which are at the more mature stage which we hopefully we be able to talk to you about in the next quarter… which will come in like 5 minutes…) and then just continuing to back them. I think this style of cross-stage investing is key to success in our part of capital markets. There are great people out there who specialize in certain stages of capital raising only seed, series A etc. but I think it will be increasingly important to be able to back founders and companies over much longer periods of time, across different stages.

This also provides us with access to founders of very high quality, because they know they can focus on running their companies when they have someone who has their back on the funding. And great founders are really what it is all about. As I heard someone recently say: "great management teams do great things". Sounds so obvious but so so SO true. Of course there have been and will be companies that don't/won't perform like we thought they would, but I do think the rate of success improves when management teams can focus on running the business.

We are active investors in the sense that we get involved at the board level. We try to be clear that we are not there to run companies, we will let the founders do that, strongly believing that it creates more friction than help when capital providers get too involved. However, we believe that board presence allows us to be able to help on e.g. funding faster when the timing is right.

It is harder to scale when being an active investor, which is partly why we have set up our scout program, allowing us to use the scout network to source, invest and monitor a larger number of early stage companies that we could with our current staffing. However, having said that we will be taking on some more people at VNV to build more capacity to capitalize on the opportunities in the portfolio and of course do new deals.

For example StudySmarter, which I wrote about in the last quarterly report. It is a holding within our scout portfolio. I wanted to pre-empt their next round, thought I had a deal but got outbid by someone else. I guess it highlights that we are price disciplined. That is good. What is bad is that we maybe should have been faster on this ball. More capacity people-wise at VNV Global will help us capture such opportunities. It often requires being close to the founders and the companies. Founders don't want to be close to people they don't get along with, so when we are recruiting we need to look for people who not only come with experience of young digital startups in our niche of network effects but also people who are good guys and girls… people who are willing to lead by example and to whom it comes natural to do the right thing…

Voi

Voi is a good example where we had capacity to be very close and hence I think help the company in various ways including the timing and size of their funding, also allowing us to build a larger absolute holding in this great company. Speaking of Voi, they did close a funding round of USD 45 mln this summer which values our stake in the company at USD 226 mln, an upward move of some USD 98 mln since our previous mark. And did you know that since only 2020 the users of Voi have replaced 11 million car trips with Voi e-scooters. Pretty cool!

Numan

Another example of this is Numan. This is an investment that we did ourselves at VNV at a very early stage, really even before we started the scout program, managed to have capacity to stay close. From a very small investment it has just closed a funding round, in which we participated raising some USD 40 mln and valuing the company at USD 211 mln and our stake at USD 37 mln. This takes the company out of the oblivion of the "Other" section into something that is starting to become meaningful in the portfolio. Numan targets health and wellness for men, offering a subscriptions service for users to treat men's health issues. Based and initially launched in the UK it has grown to become one of the leaders in the space in Europe. A similar player in the US, Hims is listed on the NYSE with a market cap of USD 1.4 bln. If (when?) Numan enjoys the same price then our stake would be USD 244 mln, making Numan the 2nd largest asset in the portfolio, everything remaining the same. Obviously all hypothetical but still…

Financial Report for the Third Quarter and the First Nine Months 2021

04

Swvl

During the quarter Swvl took a BIG leap forward in the portfolio following the announcement that they are listing in the US via a SPAC merger at a materially higher valuation than where we previously had it marked.

The transaction is expected to close before year end and at the SPAC reference price values our stake in the business at approx. USD 144 mln. As per 3Q21, we still keep our Swvl investment on a model-based valuation of USD 126.8 mln, so slightly discounted to the implied valuation in the SPAC transaction, but still propelling it to VNV's 5th largest holding as per the end of September.

Swvl recently also announced its own 3Q21 results, with highlights including USD 16 mln in gross revenue for the quarter, an increase of 264% yoy and ~508k active users representing an increase of 207% yoy. In their result announcement Swvl also increased their FY2022 gross revenue guidance to USD 155 mln, up from previously communicated USD 141 mln.

Olio

This quarter we are super happy to have led the USD 43 mln round at Olio which saw Lugard Road (known to us through their association with Luxor Capital, our previous large shareholder) and DX Ventures (the venture arm of Delivery Hero) also participating. We have been shareholders in Olio since last summer when we bought a small stake in the company by buying out some early backers.

Olio is building a hyper local community around the topic of sustainability, hitting it off around food waste, an enormous global issue, where as much food as it takes an area as large as China to grow is thrown away each year. Long-term it is aiming, credibly we believe, to fill the vacuum of becoming one of the world's most iconic sustainability brands. As sustainability becomes an absolute demand from larger and larger populations and consumers there are some big opportunities to capture here. Its current monetization encompasses large corporations like Tesco paying them to handle their out-of-date food products. The realization is that in it time will not be possible for merchants such as Tesco and Pret A Manger to run their businesses without showing their customers that they are efficient in terms of food waste, in essence they will have to have associated with a the type of brand Olio is aiming to become to be in business. Although visibility is low today I believe you can sense the upside potential in terms of revenues from monetizing an Olio brand and

community. More near-term revenue streams will come from the launch of products like Borrow and Made which will allow the community to borrow items from each other and sell homemade products.

Founded in 2015 by Tessa Clarke and Saasha Celastial-One,one-time Stanford classmates with a wealth of experience across many industries, the company has today grown to a community of 5 mln members.

An interesting comparison for valuation benchmarks is Nextdoor of the US which currently carries a USD

5 bln price tag, providing a pointer on the upside of Olio from this round.

BlaBlaCar

In this report our mark in BlaBlaCar is marked downwards. This is the result of two factors, first that BlaBlaCar's revenues are yet to return to pre-Covid levels in a sustainable way (long distance travel is still impacted by this pandemic) and also that the comparison we use is derived from a relevant peer group whose multiples are also somewhat impacted by the same set of circumstances.

What it is not reflective of is our conviction that BlaBlaCar's business model and thus the investment case has a very large upside. Short run, its net revenues in September were back to 2019 pre-covid levels

for the first time since the crisis, while the new high petrol prices norm is boosting carpooling usage, with people looking for ways to reduce the pain at the pump. Looking beyond, the company has made a smart play by positioning itself as the leading player digitalising long-distance buses in emerging markets, which opens up a large avenue for growth.

We funded the company earlier this year, are not worried about the short term (what great investment returns are made on near term outlooks?) and look forward to marking this higher has the effects of this pandemic wears off.

Another scout example: Carla

Carla is a next generation car vertical, focusing solely on the niche of electric cars, offering a modern product, where the buyer of a second-hand car can experience the same service as when buying a new car. A Carvana or a Carzoo but only for electric vehicles, which of course comes with some different aspects than historic cars, most importantly the battery. And the market

for electric cars is… enormous, estimated to grow in 5 years to some EUR 100 bln in Europe alone.

Patrik Illerstig and Niklas Jungegård have a long

background within both the startup world, the investing world as well as within the historic automotive industry which they have found is struggling to adapt to selling cars online.

Chris Norman is an old friend and Avito Alumnus who also serves as one of our oldest VNV scouts. He has invested a substantial amount of money in Carla, both within our scout framework and outside.

We are super excited by this scout opportunity which we aim to continue financing.

Per Brilioth

Managing Director 

Financial Report for the Third Quarter and the First Nine Months 2021

Investment portfolio

Portfolio structure - Net Asset Value

The investment portfolio stated at fair market value as at 9M 2021, is shown below. /Expressed in USD thousands/

05
Other
7.5%
Marketplace
15.2%
Mobility
46.7%
Digital Health
30.6%

Category	Company	Fair value,	Investments/	Fair value	Valuation change	Fair value,	Percentage	Ownership	Valuation
		09/30/2021	Disposals	change	per share	12/31/2020	weight		method
Digital Health	Babylon	427,646	-3	28,379	7%	399,270	26.0%	10.9%	Revenue multiple
Mobility	Voi	226,017	3,600	93,789	73%	128,627	13.8%	24.8%	Latest transaction
Mobility	BlaBlaCar	154,686	4,487	-28,283	-17%	178,482	9.4%	8.8%	Revenue multiple
Mobility	Gett	142,008	6,150	27,552	24%	108,306	8.6%	5.3%	Revenue multiple
Mobility	Swvl	126,776	10,000	86,394	234%	30,382	7.7%	14.1%	Revenue multiple
Marketplace	Hemnet	83,254	-16,378	58,800	144%	40,832	5.1%	3.1%	Listed company
Marketplace	Property Finder	40,097	-	-1,138	-3%	41,235	2.4%	9.5%	Revenue multiple
Digital Health	Numan	36,767	4,217	23,531	251%	9,020	2.2%	17.4%	Latest transaction
Marketplace	Booksy	34,957	-	-	0%	34,957	2.1%	10.4%	Latest transaction
Mobility	Borzo	32,790	8,829	-5,064	-22%	29,025	2.0%	18.8%	Latest transaction
Mobility	OneTwoTrip	32,220	-	6,642	26%	25,579	2.0%	21.1%	Revenue multiple
Marketplace	HousingAnywhere	17,241	6,499	-941	-5%	11,683	1.0%	30.3%	Latest transaction
Other	Olio	15,589	13,924	791	5%	874	0.9%	11.0%	Latest transaction
Other	Other scout investments	15,435	15,435	-	0%	-	0.9%	-	Net asset value
Marketplace	Hungry Panda	12,894	-	-	0%	12,894	0.8%	4.0%	Latest transaction
Marketplace	Inturn	12,538	-	-	0%	12,538	0.8%	9.8%	Latest transaction
	Other equity investments	129,939	43,754	-1,716	-1%	87,900	7.9%
Mobility	BlaBlaCar, debt	37,521	37,691	-170	0%	-	2.3%	-	Convertible
	Other convertible notes	6,222	-3,767	796	15%	9,193	0.4%
	Liquidity management	-	-2,122	1	-	2,121	0.0%
	Investment portfolio	1,584,597	132,317	289,364		1,162,916	96.4%
	Cash and cash equivalents	58,542				23,321	3.6%
	Total investment portfolio	1,643,139				1,186,237	100.0%
	Borrowings	-149,355				-98,362
	Other net receivables/liabilities	-3,403				-7,642
	Total NAV	1,490,381				1,080,234

Babylon: USD 65,522 thousand is held through Global Health Equity AB.

Hemnet: Indirect holding through YSaphis S.A. and Sprints Euphrasia S.a.r.l. The basis of equity valuation of Hemnet includes sales proceeds and VNV Global's remaining indirect holding will amount to 3,146,503 shares in Hemnet. For further details on the holdings, see Note 3.