VNV Global : Six-Month Report 2021

VNV Global AB (publ)	01
Financial Report for the
Second Quarter and
the First Six Months 2021

Financial Report for the Second Quarter and the First Six Months 2021

02

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

The VNV Global AB (publ) ("VNV Global") group's net asset value was USD 1,340.86 million (mln) on June 30, 2021 (December 31, 2020: 1,080.23), corresponding to USD 12.61 per share (December 31, 2020: 11.36). Given a SEK/USD exchange rate of 8.5389 the

NAV was SEK 11,449.50 mln (December 31, 2020: 8,833.34) and SEK 107.70 per share (December 31, 2020: 92.91), respectively.

The group's NAV per share in USD increased by 11.8%.

Net result for the period was USD 127.51 mln (January 1, 2020-June 30, 2020: -8.69). Earnings per share were USD 1.23 (-0.11).

Financial results for the second quarter 2021

Net result for the quarter was USD 103.82 mln (36.97). Earnings per share were USD 0.97 (0.47).

Key events during the quarter

April 1, 2021-June 30, 2021

During the second quarter of 2021, VNV Global invested a total of USD 92.9 mln, mainly in BlaBlaCar (USD 42.2 mln) and BestDoctor (USD 10.2 mln).

On April 21, 2021, VNV announced it was leading a new larger financing round in BlaBlaCar with a USD

42.2 mln (EUR 35 mln) investment, primarily in the form of convertible notes.

On April 27, 2021, Hemnet IPOed on Nasdaq Stockholm. The IPO price was SEK 115 per share, corresponding to a total market value of listed shares of SEK 11.6 bn. As per the end of 2Q21, the share price was SEK 192.5 per share, an increase of 67% com- pared to the IPO price and a 167% upward revaluation of VNV's valuation of Hemnet in 2Q21. Following the IPO, VNV expects to realize approx. SEK 141 mln in sales proceeds and VNV's remaining indirect holding corresponds to 4,196,773 shares in Hemnet.

On June 3, 2021, VNV Global announced that Babylon will become publicly traded via a merger with Alkuri Global Acquisition Corp. which is a publicly traded special purpose acquisition company. Upon closing of the transaction, the combined company will operate as Babylon and plans to trade on Nasdaq in the second half of 2021.

On June 18, 2021, the Company announced that it had successfully placed a new senior unsecured bond loan (the "Bonds") in an initial amount of SEK 500 mln within a framework of SEK 750 mln. The Bonds have a tenor of three years and will carry a fixed rate coupon of 5.50 per cent p.a. with interest paid quarterly. The transaction attracted demand from a wide range of Nordic and international investors and was significantly oversubscribed. The Bonds are listed for trading on Nasdaq Stockholm and the Frankfurt Stock Exchange.

On June 22, 2021, VNV announced that the Board of Directors had resolved, by virtue of authorisation by the annual general meeting on May 4, 2021, to repurchase the Company's own ordinary shares. The purpose is to provide flexibility in relation to the Company's possibilities to return capital to its shareholders and to improve the capital efficiency in the Company.

Key events after the end of the period

Collectiv Food

In July 2021, VNV Global invested GBP 5 mln as part of a 12 mln series A round in Collectiv Food, a B2B food marketplace. Collectiv Food is a B2B food market place 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.

Wallapop

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), which is in line with the valuation as per June 30, 2021.

Miscellaneous

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.

The Company will hold a telephone conference with an interactive presentation at 15:00 CEST (09:00 a.m. EDT) Wednesday, July 28. For call-in details, see separate press release issued Thursday, July 22, at www.vnv.global.

Financial Report for the Second Quarter and the First Six Months 2021

03

Management report

Dear all,

An active quarter and period in general with several new investments (BestDoctor, Collectiv Food - completed in July - and Tise), serious developments in the existing portfolio and financing work.

	Babylon SPAC
	The largest "news" in the portfolio this last quarter was
	the announcement on June 3rd of the start of the listing
	of Babylon through a merger with the Alkuri Global
	SPAC (trading on Nasdaq under ticker KURI). We are
	excited to see Babylon on the verge of entering this new
	chapter on its journey as a publicly traded company.
Per Brilioth	The company is continuing to perform and grow rapidly,
especially in the US, and with this transaction, Babylon
Managing Director	will have a significant cash balance that will enable the
Photo: Tobias Ohls	company to further accelerate this trajectory. We still
	believe that Babylon is only at the beginning stages of
	its journey, and we continue to see significant upside
	potential over the coming years.
	The transaction is expected to close in the second
	half of 2021, subject to Alkuri shareholder approval
	and satisfaction of other customary closing conditions,
	including any applicable regulatory approvals.
	Alkuri will contribute USD 345 mln of cash in trust
	assuming no redemptions, and a further USD 230 mln
	in capital, including USD 5 mln from VNV Global, has
	been committed through a private investment in public
	equity ("PIPE") at USD 10 per share.
	The transaction implies a pro forma enterprise value
	of Babylon of approximately USD 3.6 bn and pro forma
	equity value of USD 4.2 bn. The merger agreement
	contemplates that existing Babylon shareholders,
	including VNV Global, will roll-over and retain 100% of
	their existing equity, owning approximately 84% of the
	combined company's pro forma equity. The combined
	entity is estimated to have up to USD 540 mln of cash
	following the closing.
	At closing, VNV Global is expected to, directly and
	indirectly, own 43.2 mln shares in the combined entity
	which implies a valuation of USD 432.2 mln for VNV
	Global's holding at the reference share price of USD 10
	per share. This means that we would own approximately
	10% of the company.

Financing - issue of a new bond

On June 18th we placed a new senior unsecured bond loan of an initial amount of SEK 500 mln within a framework of SEK 750 mln. The bonds run with a tenor of three years at a fixed rate coupon of 5.50 per cent p.a. with interest paid quarterly. We are excited to see the strong interest in our new bonds. With this additional financing, we will be able to remain flexible and opportunistic around our strong deal flow. We are currently looking at a number of opportunities that we believe have very investable risk/reward characteristics that would make great additions to the exciting and growing list of next generation companies in the portfolio, all of which we believe have the potential to become our next Babylon or Avito.

Including the senior secured bond our total outstanding debt now amounts to USD 153 mln.

Buy backs

Buy backs have been an integral part of our company's investing history over the past 20 years. Having been quiet for a while we re-initiated a buy back program a couple of weeks ago by buying back a total of 433,745 shares, roughly 0.4% of the company. We do not have any illusions that us doing this will in itself close a discount to NAV, it is more about us thinking that if we can buy back our portfolio at a discount to what we ultimately think is a conservative NAV with a huge upside potential, that is an investment that is hard to stay away from. Of course always trying to balance this with liquidity and not missing out on new investments that will over time ultimately be the driver of the NAV and the stock price.

Scout program

We will endeavour to describe a scout company in each of our quarterly reports, this time around the German company StudySmarter, one investment done within our scout program this quarter.

We continue to be super excited about our scout program as a portfolio on its own but importantly as a source of future deal flow. In parallel to the scout pro- gram, we continue to invest into early-stage companies directly as well and have closed a few in the period since our last report.

StudySmarter

StudySmarter is a leading EdTech start-up from Munich that develops an intelligent and content-agnostic platform for lifelong-learning. The StudySmarter learning platform was first published in 2018 and

is currently used by more than 1 mln learners. The start-up is headquartered in Munich and employs more than 60 people. StudySmarter's vision is to leverage state-of-the-art technology to empower everyone to achieve their educational goals.

This study tool is made for mass usage, it is a sort of a social network for e-learning. Network effects are significant as users upload and share content and rate study materials and books. The company also automatically matches users into learning groups based on their learning materials and goals, so that users can exchange their content and answer each other's questions on the platform. Moreover, its growth has been mostly viral and customer acquisition has been organic, with very little paid marketing.

We hope StudySmarter will be one of the first scout investments that develops into a direct investment for us, thus also becoming a great example of the design of the scout program as a source of future deal flow.

New deals

Collectiv Food

We are very happy to have led the GBP 12 mln Series A at Collectiv Food, the next generation food supply business transforming how fresh products are accessed and distributed within cities. Collectiv's innovative managed marketplace connects a fragmented supply of producers with the very fragmented demand of professional kitchens, creating improved transparency and other clear network improvements for all stakeholders. We look forward to continuing to support the Collectiv team as they scale the business over the coming years. It is the largest recorded Series A for a managed B2B food marketplace in Europe. The investment will be used to further develop Collectiv's innovative delivery and sourcing models and expand the team, across all functions, gearing up for further international expansion in Europe.

The potential for strong network effects, enormous market (GBP 145 bn in Europe alone) and a great great team. Checks all our boxes!

Financial Report for the Second Quarter and the First Six Months 2021

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Collectiv operates by sourcing great quality food produce directly from a network of thousands of producers, cutting out the wholesaler middleman and delivering straight to professional kitchens - with customers ranging from restaurants and hotels to catering firms, meal-kit companies, dark kitchens, where restaurant style meals are cooked for delivery, and stores. Its greener last mile delivery utilises 'PODs' (Points of Distribution) in disused city locations and results in up to 50% less CO2 emissions than traditional methods. This unique, decentralised model enables it to offer market-beating prices, fresher products, and a reliable service, all underpinned by a commitment to sustainability.

Setting it apart from traditional wholesalers or catering butchers, Collectiv sells on demand, not by catalogue, and carefully selects producers to match buyers' needs. All products are then consolidated through an innovative distribution model before reaching the customer. The model offers full transparency and traceability, with no relabelling or hiding producers' brands. The Series A funding will additionally allow further development of Collectiv's Producer Sustainability Index, providing ratings on each producer and enabling better informed decisions for the customer.

Tise

Tise is a social marketplace i.e. acting in the intersection of a classified and an Instagram. It fits the profile of a company with genuine potential to become global leaders in its space, with a fantastically strong founding team, inherent network effects and huge scalability. It's evident that consumers are becoming increasingly conscious about how and where they purchase their clothes and everyday items, and the Tise's platform is perfectly positioned to tap into this new movement by helping people make more sustainable choices. We're very proud to be part of the Tise journey and we look forward to supporting Eirik and the team through the next stages of growth.

On the topic of potential investment returns, both Poshmark at USD 3 bn (listed company) and Vinted at EUR 4.5 bn are relevant valuation benchmarks, providing a glimpse of a very serious upside for Tise.

BestDoctor

We participated in the USD 26 mln round at BestDoctor, a Russia focused insurtech/healthtech startup, founded in 2015, that is currently targeting the voluntary health insurance (VHI) market and plans to expand further to create an ecosystem around health. The market is large at an estimated USD 1.1 bn for the private market. Its core product is B2B health insurance plans to corporates, where the companies of "new" Russia i.e., Yandex, Mail, Avito etc have stepped up as the early clients.

We believe BestDoctor is the leading healthtech/ insurtech player in Russia, which is best positioned to capitalize on the transformation and digitalization of the healthcare industry. We believe that the market is ripe for innovation, and BestDoctor plans to develop a number of technological products that will remarkably improve its economics (client routing via mobile app, ongoing monitoring and disease prevention, telemed- icine, wellbeing products cross-sell, ML symptom checker, etc.). Management is young but very passionate and strong. Network effects are clear through customer data generation and efficiencies in patient routing, similar to Babylon.

Sort of an Oscar Health, Clover, Alan of Russia but without the heavy competition that those companies are subject too. I believe in a 5-10x upside potential if we allow ourselves the usual 5-year time frame.

Per Brilioth

Managing Director 

Financial Report for the Second Quarter and the First Six Months 2021

05

Investment portfolio

The VNV Global investment portfolio /June 30, 2021/

Category		Category			Category			Category
Mobility		Digital Health	Marketplace	Other
41.7%		31.1%			18.7%			8.5%
Company		Company			Company			Company
BlaBlaCar1	15.4%	Babylon	28.2%		Hemnet	7.4%		Cash and cash equivalents	5.6%
Gett	9.3%	Numan1	0.9%		Property Finder	2.9%		Scout investments	0.9%
Voi	8.6%	BestDoctor	0.7%		Booksy	2.3%		Glovo	0.8%
SWVL1	2.8%	Vezeeta1	0.4%		HousingAnywhere1	1.2%		YouScan	0.4%
OneTwoTrip	2.3%	Yoppie	0.4%		HungryPanda	0.9%		Marley Spoon	0.2%
Dostavista1	2.1%	Grace Health	0.2%		Inturn	0.8%		Olio	0.1%
Monopoliya	0.6%	Napopravku	0.2%		Wallapop	0.8%		Other investments	0.5%
Shohoz1	0.6%	DOC+	0.1%		El Basharsoft1	0.7%		Liquidity management	0.1%
		Stardots	0.1%		Merro	0.5%
		Pale Blue Dot	0.0%		Tise	0.4%
						JamesEdition	0.3%
						Naseeb Networks1	0.3%
						Alva	0.1%
						Dubicars	0.1%
						Agente Imóvel	0.1%
						Shwe Property	0.1%
						JobNet	0.1%

1. Including convertible debt.