Kinnevik Results Presentation Deck
Intro
Net Asset Value
during the last twelve months as at 30 September 2022 (as disclosed
on p. 12). On a NTM basis, the multiple is at a >30 percent discount to
the aforementioned key peers.
The fair value of Kinnevik's 11 percent shareholding in Vivino amounts
to SEK 587m, effectively flat in the quarter save for currency headwinds.
The valuation is mainly based on forward-looking GMV multiples of a peer
group of global online marketplaces with high user engagement such
as Etsy (ETSY). Our assessed value of the company reflects a relatively
material, slightly increased, discount to the peer group's average multiple.
As our holding benefits from downside protection from the preferential
terms of our investment in the company's latest equity fundraise, the fair
value of our investment remains largely unchanged.
The fair value of Kinnevik's 5 percent shareholding in Jobandtalent
amounts to SEK 1,123m, a few percent above last quarter due to cur-
rency tailwinds. The valuation is based on near-term forward-looking
revenue multiples of a peer group consisting of human capital-focused
businesses such as Fiverr (FVRR) and Upwork (UPWK), with reference
also drawn to marketplaces such as Airbnb (ABNB) and Uber (UBER).
The peer group's average NTM revenue multiple decreased by around
5 percent in the quarter, and the company remains valued at a premium
to the peer group, albeit a decreasing one, considering its significantly
stronger revenue growth relative to the peer group constituents while
maintaining comparable margins and profitability. Our holding benefits
from downside protection from the preferential terms of our investment
in the company's fundraise in the fourth quarter of 2021, causing an ef-
fectively unchanged fair value in spite of reflecting considerable multiple
contraction in the peer group over the last few quarters.
SOFTWARE
Our Software businesses are typically benchmarked against both high-
growth SaaS businesses such as Atlassian (TEAM) and Salesforce (CRM),
and more transactional software businesses like Twilio (TWLO) and Shopify
(SHOP). The companies in our peer sets typically grew revenue at around
30 percent in 2022 with gross margins of 75 percent, compared to our
businesses which typically are growing almost five times faster with
somewhat lower gross margins.
KINNEVIK
Interim Report Q4 2022
Portfolio Overview
Sustainability
The fair value of Kinnevik's 8 percent shareholding in Cedar amounts
to SEK 1,662m, down around 18 percent in the quarter. The valuation
reflects a somewhat lower growth outlook as the company strengthens
its profitability, as well as the peer group's average NTM revenue multi-
ple contracting by around 7 percent in the quarter. The Swedish krona's
appreciation against the dollar puts further pressure on our fair value.
The company is valued in line with the richest valued companies in its
peer group, corresponding to a material premium to the peer group
average to reflect Cedar's stronger growth rate. In relation to this average,
the valuation normalizes materially twelve months out, courtesy of the
company's strong outlook.
The fair value of Kinnevik's 14 percent shareholding in Pleo amounts
to SEK 3,352m, down around 10 percent from last quarter's valuation.
The valuation reflects revenue and gross profit multiple contraction of
around 15-20 percent in the quarter, in line with many of the constituents
of the peer group. The valuation still implies a significant premium to the
peer group on an NTM basis, but normalizes over the coming 12 months
in relation to the best-in-class companies in the peer group as Pleo is
expected to grow at a significantly faster pace with improved profitability
and a strong financial position.
The fair value of Kinnevik's 15 percent shareholding in TravelPerk
amounts to SEK 1,964m, effectively flat in terms of underlying valuation
in the quarter but decreasing 7 percent, mainly due to currency effects.
The assessed valuation is fairly in line with where the company raised
new financing in late December 2021, and where smaller secondary
transactions took place during the second and third quarters, in which
Kinnevik participated. The resilience of the carrying value of our TravelPerk
investment reflects the company's superior performance benefiting from
a sharp rebound in travel as well as continued strong acquisition of new
clients more than offsetting an approximate 40 percent decline in the
NTM revenue multiple during the full year 2022.
CONSUMER FINANCE
Our Consumer Finance businesses are typically benchmarked against a
peer set of digital wealth managers such as Avanza (AZA.ST) and Nordnet
(SAVE.ST), and consumer subscription businesses such as Match Group
Financial Statements
Other
(MTCH) and Netflix (NFLX). On average, the companies in the broader
composite peer set saw flat revenues in 2022 with gross margins of around
45 percent. Our investments in the sector are growing by around 20-40
percent with comparable gross margins.
The fair value of Kinnevik's 13 percent shareholding in Betterment
amounts to SEK 1,438m. The peer group's average NTM revenue multiple
expanded around 10 percent in the quarter, but we apply a discount to
the peer group in valuing Betterment in consideration of the current
volatility in financial markets bearing a more adverse impact on Better-
ment than on more transactional asset management models. Per the
end of November, the company's assets under management amount-
ed to around USD 33.0bn. While the revenue mix is becoming more
diversified, Betterment's revenues are still primarily derived from fees
on assets under management and therefore remain in part correlated
with the development of the US and global stock market. At the current
valuation level, the carrying value of our investment is positively affected
by liquidation preferences, causing an unchanged fair value in USD terms
and an decreasing fair value in SEK terms due to currency headwinds.
The fair value of Kinnevik's 21 percent shareholding in Monese amounts
to SEK 832m, virtually flat in the quarter. The valuation is at a not imma-
terial discount to the valuation where the company raised new capital at
during the third quarter, stemming from the terms at which this capital was
raised from a strategic investor. The peer group's average NTM revenue
multiple expanded by around 4 percent in the quarter. Our valuation
means valuing the company at an approximate 10 percent premium to its
peer group of financial services and consumer subscription companies.
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