VNV Global : Three-Month Report 2021

VNV Global AB (publ)	01
Financial Report for
the First Quarter 2021

Financial Report for the First Quarter 2021

02

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

The VNV Global AB (publ) ("VNV Global") group's net asset value was USD 1,241.86 million (mln) on March 31, 2021 (December 31, 2020: 1,080.23), corresponding to USD 11.63 per share (December 31, 2020: 11.36). Given a SEK/USD exchange rate of 8.7321 the NAV was SEK 10,844.04 mln (December 31, 2020: 8,833.34) and SEK 101.59 per share (December 31, 2020: 92.91), respectively.

The group's NAV per share in USD increased by 2%. Net result for the period was USD 23.68 mln

(January 1, 2020-March 31, 2020: -45.67). Earnings per share were USD 0.24 (-0.58).

Key events during the quarter

January 1, 2021-March 31, 2021

During the first quarter of 2021, VNV Global invested a total of USD 19.2 mln, of which USD 10 mln

was invested in SWVL, USD 3.5 mln was invested in HousingAnywhere and USD 5.7 mln in other investments.

An Extraordinary General Meeting in VNV Global held on January 13, 2021 resolved in accordance with the Board's proposals to amend the articles of associa- tion, to authorize repurchase of own shares, to authorize the issue of shares, and to issue new incentive shares to the participants of VNV Global's long-term incentive programs LTIP 2019 and LTIP 2020 as compensation for the dilutive effect of the rights issue 2020.

On February 17, 2021, VNV Global announced that the Company's directed share issue of 11,662,000 shares was subscribed. The directed share issue provided VNV Global with proceeds amounting to SEK 1,116.2 mln (USD 140.5 mln) prior to transaction costs. The subscription price in the Directed Share Issue amounts to SEK 100 per share.

Key events after the end of the period

On April 21, 2021, VNV announced it was leading a new larger financing round in BlaBlaCar with a EUR 35 mln investment, primarily in the form of convertible notes.

On April 27, 2021, Hemnet IPOed on Nasdaq Stockholm. At the IPO price Hemnet is valued at approx. SEK 11.6 bn, implying a valuation of SEK 623.5 mln for VNV's indirect stake of 5,421,476 shares in the company before the transaction, which implies a 72% upward revaluation compared to VNV's valuation as per 1Q21. Following the IPO, assuming the over-allotment option is exercised in full, VNV expects approx. SEK ~141 mln in sales proceeds and the Company's remaining indirect holding will amount to 4,196,773 shares in Hemnet.

The Company will hold a telephone conference with an interactive presentation at 15:00 CEST (09:00 a.m. EDT) Wednesday, April 28. For call-in details, see separate press release issued Friday, April 23, at www.vnv.global.

Financial Report for the First Quarter 2021

03

Management report

Well, this first quarter has been a busy one for us:

- Raised USD 140 mln in equity through a directed share issue.

- Lead large rounds in BlaBlaCar and SWVL

- Helping several of our portfolio companies to navigate capital market activity.

- Capitalizing on an intense deal flow around new opportunities.

	What's going on out there?
	Hahahaha LOTS!! One topic that seems to be coming
	up a lot is that on a macro level at least the historical
	measure of inflation seems to be creeping up in turn
Per Brilioth	leading to higher interest rates (albeit from a very low
level). Higher interest rates have a more negative effect
Managing Director	on assets with longer duration which include companies
Photo: Tobias Ohls	with profits far into the future, which is typical for the so
	called tech space. So higher interest rates create more
	volatility and we have witnessed this for example in the
	IPO of Deliveroo.
	However, we are at a point in time which in some
	ways is similar to 2008. Then like now we have been
	through a crisis which is being helped along with an
	abundance of liquidity. 2008 saw the proper large scale
	spread of the iPhone which created ample ground for a
	large scale disruption of especially consumer industries
	by quick footed startups who are now starting to
	become dominant and very valuable players. Liquidity
	and the iPhone kicked off a decade of tech growth in
	pretty much every sense.
	What is the equivalent of the iPhone right now?
	I cannot think of anything as concrete as the iPhone
	right now, but pressed against a wall I would say that
	blockchain (not bitcoin…) and quantum computing
	top the list. We will know in ten years from now but the
	point is that despite a more volatile macro world (the
	punch bowl of ample liquidity will not be around forever)
	there is large scale disruption yet to happen and it is
	not unrealistic that we are in for another long stretch of
	immense value creation.
	If the B2C side of things were disrupted in 2008 and
	onwards with the help of the iPhone, the feeling is that
	B2B is very much the focus point now. Most the new
	investment opportunities that we are engaging in now
	are startups that aim to disrupt the enormous world of
	B2B. Some parts of the B2B world are still not using
	tech at all and here we see a lot of activity, across the
	world in both emerging and developed markets and in
	all sorts of industries. We also see software solutions
	that have been around for a while getting a lot of
	competition from newer software players who are active

within the consumerization of B2B. It shouldn't be more difficult to operate industry software than it is to use a consumer facing software.

I could go on and on but the gist of it is that there remains an enormous amount of opportunities.

I strongly believe that our focus on looking for moats built on strong network effects remains very valid and that we have the capacity to navigate our portfolio into investments offer very attractive returns. onwards and upwards. Now to the existing portfolio.

Portfolio

BlaBlaCar

We led a larger round into BlaBlaCar which cements the company as the world leading player in ride sharing, be it through their core product of C2C cars or through B2B. Otiva J/F AB, created by Jonas Nordlander and Filip Engelbert, founders of Avito (the leading classified in Russia, acquired by Naspers), and FMZ Ventures,

a new Experience Economy fund created by Michael Zeisser, former Chairman, Investments at Alibaba and board member of both Lyft and TripAdvisor.

Including debt the company raised EUR 95 mln, which gives it a cash pile of more than EUR 200 mln thus very well positioned to be opportunistic versus competition including M&A.

Nico, the CEO of BlaBlaCar, recently described the situation well: "The crisis has reshuffled the cards of the game in the mobility space, and we see attractive opportunities that we're keen to seize to accelerate our ambition to be the go-to app for shared-transport. The funding, which adds to an already strong balance sheet, will help us lead an offensive strategy as we rebound from an unprecedented year of crisis."

The fact is that in a year where basically people

didn't travel at all BlaBlaCar recorded 50 mln passen- gers. 50 million passengers!

As vaccination progresses and travel restrictions are lifted, we expect travel to resume fast, with a preference for safe, local and affordable travel. Carpooling has shown to be a favored means of transport during the crisis because it minimizes the number of contacts along a journey. Meanwhile the affordability of both carpooling and buses, and the unrivaled geographical coverage of the combined network across its 22 markets makes BlaBlaCar's offer particularly relevant as the world adjusts to a new norm.

BlaBlaCar also announced the acquisition of Ukrainian company Octobus. Octobus has developed

1. state-of-the-artInventory Management System to help digitalize bus supply. This acquisition will reinforce

BlaBlaCar's ability to support the digitalization of bus carriers outside of Europe where bus operators are still selling most of their tickets offline. BlaBlaCar is accelerating the digitalization of this space, while offering to its members a vast offer of carpool or bus journeys.

Babylon

As you know, our mark in Babylon is based on our usual simple valuation model which looks out at financials in the near future and then uses an adjusted market multiple based on a listed peer group. There is nothing out there in the publicly listed world that is quite like Babylon and hence the peer group encompasses a wider group of companies active in digital health. Prices for that peer group have been volatile of late and especially the largest US teledoctor player, Teladoc, has come off its peaks. Despite this and due to the continued progress at the company we have recorded a slight upwards revaluation of Babylon as of the end of March. However, I believe that our approach still puts a conservative mark on Babylon, as the potential growth for their product within digital first primary care is potentially materially higher than

for the peer group and quite certainly that the long term sustainable margin for Babylon's business model are also higher than the peer group as barriers to entry have an inherent presence in their aggregation of data.

I think visibility is about to increase at Babylon, also likely in a material way increasing the prospects for a higher valuation for the company. We are on a similar path right now to when we invested into the company in 2017. Back then the company had yet to bring on their first proper client, having had no meaningful revenue to date, instead concentrating all their effort into building their product. A year or so later NHS became their first institutional client immediately transforming visibility into the company's future revenue path. the price for Babylon increased by 8x.

Now the world's largest healthcare market stands before them. The mighty US, a USD 860 bn market. No European healthcare company had ever managed to enter the US market and win. Also no company within the digital first value based model has become profitable. Visibility into Babylon achieving this is low, especially in this period of pandemic where it is difficult to manage and build teams of people. This is not an easy challenge but from where we sit Babylon is navigating these waters very well. I believe visibility on these two important aspects of the US market will increase substantially over the next 12 months, making the valuation jump that we saw when visibility increased last time around in 2018, look like a modest move. So exciting… and worth

Financial Report for the First Quarter 2021

reiterating the GIGANTIC acceleration of digital health that this pandemic has produced. Before the pandemic digital appointments were at a 0.8% in the US, now they are at 30%. In a USD 860 bn industry. And 30% is not the end game.

Gett

We go back a long time since I felt this enthusiastic on Gett. Its focus is on the attractive B2B segment targeting the USD 51 bn global corporate ground transportation market excluding B2B car rentals. The countries where Gett is currently active amount to USD 26 bn, with the US being the largest. Its product allows corporate clients to connect with a range of vendors on a single platform. It is estimated that customers can save as much as 22-45% of annual travel expenses with the Gett product, as it optimizes the actual travel cost but also the front and back offices administration. Marketplace EBITDA margins with SaaS-like revenue retention is within reach. In a huge market.

SWVL

During the first quarter, we invested an additional USD 10 mln in SWVL as part of a larger round in the form of convertible notes. SWVL, like all mobility businesses, was impacted by Covid-19 last year and saw an initial decrease in activity on its platform. SWVL managed to cut spending significantly without doing any layoffs and turned the situation into an opportunity to triple its engineering and product team and double down on its very complex network planning, route optimization, pricing technologies and new business offerings.

SWVL quickly bounced back to very close to pre- covid revenue while maintaining a significant improvement on profitability, breaking-even on unit economics across the platform. SWVL used the opportunity to massively expand on the transit technology that powers corporates, schools and now even transit agencies/ governments, working on packaging its consumer technology into a Software as a Service that transit agencies and governments can use to operate much more efficient public transportation systems with enhanced margins. SWVL is now one of the biggest operators in the world if not the biggest in the tech enabled mass transit space across both its Direct to Consumer and Business segments with hundreds of clients across emerging markets. SWVL also expanded its offering to Saudi Arabia, the United Arab Emirates and Jordan, and now has presence in six countries and nine cities and is planning further launches in several new markets during 2021.

Hemnet

Hemnet went public on April 27th. While multiples appear high they in fact leave potential for further returns due to its standing on the Swedish real estate market, which is unique on a global comparison. This is classic network effects where barriers to entry are near impenetrable, combined with a strong management team we feel this will be a household stock for Swedish investors, large and small as well as a core holding for value oriented marketplace investors on an international scale. We have provided secondary supply in its IPO alongside all other existing shareholders, are now under lock up but see this as an asset that offers investable risk reward characteristics and see it remaining in the portfolio.

Scout program

During last year we launched a scout program and are excited that it is now starting to take some form. All in all we have a total of five scouts through whom we have made some 15 investments. Ticket sizes have varied from very small with the largest being a couple of USD millions, into early stage companies based in Sweden, Israel, US and others. While in no rush, the ambition is to have some ten scouts each building out a portfolio of ten holdings, providing us with a 100 companies into which are in a prime position to, should we want to invest further into as they raise more senior rounds.

A very good example of a scout holding is Alva, a SaaS model in the recruitment space that we believe has the potential to also capture the value of marketplace characteristics.

Alva

Alva provides a SaaS tool offering companies and job seekers an automated, objective, and engaging way to find the right candidate for the right job opening. The tool is built upon cutting-edge research in psychometrics and data science. Today Alva runs a traditional SaaS model, but as more companies and candidates join the platform, Alva improves its ability to match supply and demand in the most effective way.

Ultimately, we believe there will be strong network effects in the model and opportunities for Alva to serve every recruiter with high potential candidates for their jobs and to help candidates find relevant job opportunities at scale going forward.

Every bad hiring decision involves extremely high costs (money, time, and human costs for the people involved) and the problem exists globally. We believe Alva has the potential to build a very large international company by addressing this problem.

04

OK, stay well everybody. Thanks for supporting us as shareholders. I look forward to hopefully soon seeing you all at AGMs, CMDs and on the road!!

Per Brilioth

Managing Director

Financial Report for the First Quarter 2021

05

Investment portfolio

The VNV Global investment portfolio /March 31, 2021/

Category		Category			Category			Category
Mobility		Digital Health	Marketplace	Other
41.1%		32.7%			15.0%			11.2%
Company		Company			Company			Company
BlaBlaCar	13.0%	Babylon	30.8%		Hemnet	3.1%		Cash and cash equivalents	9.5%
Voi	9.6%	Numan	0.7%		Property Finder	3.1%		Scout investments	0.5%
Gett	9.3%	Yoppie	0.4%		Booksy	2.6%		Glovo	0.5%
SWVL	3.1%	Vezeeta	0.3%		HousingAnywhere	1.1%		YouScan	0.4%
OneTwoTrip	2.5%	Grace Health	0.2%		Wallapop	1.0%		Marley Spoon	0.1%
Dostavista	2.3%	Napopravku	0.2%		HungryPanda	1.0%		Liquidity management	0.1%
Shohoz	0.8%	DOC+	0.1%		Inturn	0.9%		Olio	0.1%
Monopoliya	0.7%					El Basharsoft	0.8%
						Merro	0.5%
						JamesEdition	0.3%
						Naseeb Networks	0.3%
						Dubicars	0.1%
						Alva	0.1%
						Shwe Property	0.1%
						Agente Imóvel	0.0%
						JobNet	0.0%