Kinnevik AB

STO:KINV B

Earnings Call Transcript 2018-Q3

[Operator]

Hello, and welcome to the Kinnevik AB Q3 report for 2018. [Operator instructions] Today I'm pleased to present the CEO, Georgi Ganev. Please go ahead with your meeting.

[Georgi Ganev, Chief Executive Officer]

Thank you very much. Good morning, everyone, and welcome to the presentation of Kinnevik's result for the Third Quarter of 2018. So I'm Georgi Ganev, Kinnevik's CEO; and with me today is our CFO, Joakim Andersson; and our Director of Corporate Communications, Torun Litzen. We will start by taking you through a presentation as usual of the results released this morning. And after that, we're happy to answer any questions you might have. So please turn to Page 4, where we have provided you with a summary of the key highlights for the quarter. The third quarter has been characterized by high activity in all parts of our portfolio. Our telecom companies have executed transformational deals and our investment activity has been high as we continue to deliver on a strategy to accelerate our product portfolio. In August, we distributed our MTG shares to our shareholders to facilitate the clearance of the merger of Tele2 and Com Hem. And I'm happy to note that on 8th of October, the European commission approved the merger, and I will come back to this milestone transaction in a short while. Our financial performance was weighted down by Zalando's weaker than anticipated trading in the quarter on the back of the company's profit warning, but we remain convinced of the company's long-term strategy and potential. The net asset value was SEK 78.8 billion at the end of the quarter, reflecting the weak share price development in Zalando. [ But ] in addition, we distributed our shares in MTG during the quarter, effectively transferring SEK 4.2 billion or SEK 15 per Kinnevik share to our shareholders. Our financial position remains strong with a net debt of SEK 4.1 billion or 5% of the portfolio value. Now please turn to Page 5 for an overview of the performance of our large listed companies. So Zalando reported second quarter figures in August and in September. The company revised its guidance for 2018. The extended and unusually hot summer period, together with a delayed switch to the fall/winter season, weighed down both revenue growth and adjusted EBIT. While this clearly does not reflect Zalando's ambition, we're still confident about the company's ability to deliver on its long-term strategic plan. The market penetration of online fashion e-commerce in Europe is expected to continue to grow strongly and for Zalando, important long-term growth indicator, such as the partner program [ share and the number of active customers continue ] to develop positively. Zalando will report its full third quarter numbers on the 2nd of November. Millicom reported solid revenue growth with Latam service revenue growing 4.7% and EBITDA going 4.2%. This was the fourth consecutive quarter of positive organic mobile service revenue growth, and I'm particularly pleased to see that Millicom's investments in Colombia contribute to improving operating and financial performance. Tele2's final quarter, before the closing of the merger with Com Hem, was a quarter of solid business trends. Revenue grew 4% year-over-year and adjusted EBITDA margin amounted to 30% and Tele2 also published yet another upwards revision for the full year. Com Hem saw improvements in operational KPIs as churn reached a record low in the third quarter. Group revenue declined slightly driven by decline in the Boxer segment, but with a margin expansion in both the Com Hem and the Boxer segment, EBITDA grew 4% and in line with guidance. Now moving on to Slide 6, where we highlight the progress on creating the new Tele2. Shareholders of both Tele2 and Com Hem approved the merger of the -- in the middle of September. And with regulatory clearance in the beginning of October, the transaction can now be finalized. The 2 companies will formally merge on the 5th of November, creating a leading connectivity provider in the Baltic Sea region offering more and better choice to consumers through a portfolio of truly integrated services. I'm very confident that a combined entity is well positioned for the future and the employees of both Tele2 and Com Hem shall feel very proud of what they have achieved so far. The hard work from both organizations during this year has created a solid foundation on which to build. And for Kinnevik, the merger is a testament of our active ownership, and it illustrates how we can support our companies as they execute on their strategic vision. Now please turn to page 7, where we'll take a closer look at Millicom's acquisition of Cable Onda. Millicom's goal is to be a customer focused and convergent provider of high-speed data in Latin America and the position of Cable Onda in Panama fits perfectly with this strategy. Cable Onda is the leading provider of broadband Internet, pay-TV [ fixedtelephony ] and B2B Tele communications services in Panama, and Panama is also an important business hub in Central America. And after the acquisition, Millicom will have [ counter ] operation spanning all the way from Guatemala to Colombia, significantly improving the value proposition for businesses in the region. The transaction is expected to close by the year-end of 2018. Now please turn to page 8 for an overview of the momentum in our largest private companies. Our private companies experienced solid growth during the third quarter, and I'll go through some of the highlights before I cover GFG in more detail on the next slide. I start with Quikr. Quikr, which operates 2 types of businesses: classifieds, and transactional across five categories is currently benefiting from positive momentum. The verticalization strategy has allowed the company to improve both engagements and monetization on the platform while reducing marketing costs. Assets under management and Betterment amount to $15.2 billion at end of the third quarter of 2018, an increase of 39% compared to last year. And the number of customers total to 384,000, a yearly increase of 32%. The company has launched a number of product innovations and has continued to develop its platform beyond a single digital product to a Multiplan-advice offering. And the offer also includes access to certified financial planners and licensed financial consultants. Babylon's AI platform is increasingly attracting strategic partners. And during the quarter, Babylon signed an agreement with Prudential, a leading provider of medical insurance in Asia with over 5 million health customers in the region. Under this agreement, Babylon's AI will be made available to Prudential existing and new customers in up to 12 markets in Asia. Livongo had more than 90,000 members at the end of the third quarter, and the company demonstrated a strong momentum in the health service agreement with solid growth within some of the largest health plans in the U.S. The high potential products is proven to be successful, and Livongo announced the first cellular-enabled blood pressure monitoring system in the U.S. during the quarter. Now please flip to Page 9 for an update on Global Fashion Group. With a continued focus on further developing assortment in customer service, Global Fashion Group continues to add customers, now amounting to 10.6 million active customers at the end of the second quarter, up 15% year-over-year. Revenue growth accelerated from the first quarter on a constant-currency basis and the adjusted EBITDA margin continue to improve. However, continued significant depreciation across both the Brazilian real and the Russian ruble put pressure on absolute euro growth in the quarter. Brand acquisition engagement continues to be a priority and we see good progress here.In addition to the local and international brand acquisition in the region, the international buying team acquired 16 new international brands in the second quarter of 2018, including [ See by Chloé ] and L.K. Bennett and [ Reiss ] . Please turn to Page 10, where we now will highlight the IPO of Westwing. Westwing was listed on the Frankfurt Stock Exchange on the 9th of October and as part of the IPO, Westwing raised EUR 130 million of primary capital, giving the company good room to invest in growth going forward. After the IPO, Kinnevik remains a large owner with 13% of the company. [ Trading view ] in the first half of 2018 was solid and Westwing continues to be EBITDA positive. The value of Kinnevik's stake in Westwing increased by 47% to SEK 748 million compared to the second quarter reflecting the pricing of the IPO. Page 11. As you know, driving growth and value in our [ private ] portfolio is a key strategic priority and during the first nine months of 2018, we have intensified our investment activities, adding 6 new companies during the third quarter alone and 9 companies year-to-date. Within financial services, we have added 3 new companies to our portfolio, Monese, the first mobile only banking app in the U.K.; Deposit Solutions, providing an open banking platform for banks to offer third-party deposit products to their customers; and Bread, operating in the boundaries between Financial Services and e-commerce, offering a white label payment solution to online retailers in the U.S.What unites these companies is that they are digital challengers, finding innovative ways to serve their customers online. We also added 2 new Nordic companies to our portfolio during the third quarter, Karma and Kolonial. Kolonial is the leading online grocery store in Norway, and we have been impressed by the founding team and what they have achieved in a relatively short period of time. And addressing another part of the food sector, Karma reduces food waste by letting customers buy unsold food at a discount through their app from local grocery stores and restaurants. This is a business proposition we find very attractive, both financially and for society at large. The largest investment in our private portfolio in the third quarter, as well as year-to-date, was the SEK 443 million investment in GoEuro. Please turn to Page 12 for a closer look at that investment. GoEuro is an OTA, so called online travel agency that aggregates all major modes of transportation in Europe. The company allows consumers to compare journey options across rail, bus, and air travel and to make bookings that include multiple modes of transportation in one ticket. The attractiveness of the business lies not only in the fact that it's a large sector with low online penetration relative to online booking, GoEuro has also built an unmatched inventory and deep supply partnerships with over 600 rail and bus operators across 15 countries.Naren Shaam, GoEuro's visionary founder is backed by a number of strong global investors, and we're very excited about partnering up with Temasek, the global investment company headquartered in Singapore, which shares our philosophy of an active long-term ownership. With that said, I would like to hand over the call to our CFO, Joakim Andersson to comment on our financial position.

[Joakim Andersson, Chief Financial Officer]

Thank you, Georgi. On Slide 14, we present the key elements of the NAV development in the quarter. The weak share price performance of Zalando had a significant negative impact on our net asset value during the quarter. Also, the distribution of MTG to our shareholders reduced NAV by SEK 5 billion. The value of our private portfolio increased during the quarter to SEK 13.7 billion, largely driven by net investments of SEK 1.2 billion during the quarter, partly offset by GFG. The value of Global Fashion Group amounted to SEK 4.6 billion in Q3 compared to SEK 5 billion in the previous quarter, a result of multiple contraction among listed payers as well as the depreciation of both the Russian ruble and the Brazilian real. In total, our NAV decreased by 18% SEK 78.8 billion and NAV per share was 286 in the third quarter. After yesterday, our NAV was SEK 77.9 billion or SEK 283 per share. Please turn to Page 15 for an overview of our balance sheet. As previously mentioned, our investment activity has remained high during the quarter and in total, we invested SEK 1.5 billion and made divestments amounting to SEK 312 million. As a consequence, our net debt position increased to SEK 4.1 billion at the end of September, which corresponds to a leverage of 5% of the portfolio value. In the fourth quarter, we expect to receive SEK 1.3 billion in cash consideration from the Tele2 Com Hem merger as well as around SEK 450 million, as Millicom pays out the second tranche of its annual dividend. That's all, we remain confident that we have a strong financial position that will enable us to continue to execute on our strategy.Georgi will now take you through the last slide of this presentation on Page 17.

[Georgi Ganev, Chief Executive Officer]

Thank you, Joachim. Yes, to finishing off this presentation, I just wanted repeat that I'm very excited that the merger of Tele2 and Com Hem can now proceed to be finalized. A merger, which is a clear testament to how we drive active ownership in our companies to create value. The intense investment activity in the [ prior ] portfolio year-to-date should be seen as having gone at a fairly muted pace in the recent past. Going forward, I would say the activity will remain high, as always, within Kinnevik, but I also expect that a number of new investment will go down, as we will also focus on working with our companies to ensure that they are well positioned to execute on their respective strategies. Thank you very much for listening. And let's now open up for questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Magnus Råman of Handelsbanken.

[Magnus Råman, Research Analyst]

My first question is in regards to your investment capacity. I mean, you made no less than 10 new [ unlisted ] investments year-to-date, but from the context of available pipeline, capital available for you and perhaps also capacity in your investment organization, how should we review prospect for new investments in the year to come.

[Georgi Ganev, Chief Executive Officer]

Okay. Magnus, if I actually start a bit about the investment capacity and the team then Joachim can elaborate a bit on the financial side. We still have a portfolio today compared to more than a year ago that is including less companies. So we feel that we have a team that is suitable to handle these investments and also our, let's say, our continued pipeline, but again, as I said, the high activity -- especially this quarter with 6 new investment, and 9 year-to-date should again be seen against the fairly muted pace in the past. So we don't expect that temp of new investments to continue. But the current pipeline that we have, and perhaps the slightly larger ticket going forward, will be able to handle by our existing team.

[Joakim Andersson, Chief Financial Officer]

And then on the financial side of things. As you've seen this quarter, based on the portfolio value coming down and the net investments, so we have a leverage of around 5%. However, as I said, we expect roundabout SEK 1.7 billion coming in from the Com Hem sale and the Millicom dividend. So pro forma is just add that back to the numbers, the leverage would be around 3%. So we're quite comfortable that we have ample firepower within this financial leverage target that we have.

[Magnus Råman, Research Analyst]

Okay. That's clear. In terms of divestments. I mean, you mentioned, Georgi, here that you had lesser companies in total. Can you tell us which companies were divested under the [ post other ] in Q3?

[Georgi Ganev, Chief Executive Officer]

The largest divestment was Linio. So the number was -- Joachim?

[Joakim Andersson, Chief Financial Officer]

The total, 300 from the slide, 312 in total, it's on Page 15 in the presentation. It's Linio 273 and the other 39, it's some smaller companies in that longtail kind of cleanup.

[Magnus Råman, Research Analyst]

Yes. So that what I was asking about or wondering about, which companies were in that other bracket of SEK 39 million, but perhaps we can come back to that. But in terms of the Linio divestment, I believe that you -- I mean, you had divested this whole thing for SEK 273 million, as you stated, right? But I believe you invested in total SEK 438 million up until the end of 2016 in this company. But then you also made a share swap, I believe, from -- with Jumia shares swap to Linio shares. So can you please remind us of how much you invested in Linio in total and the result of that -- of the divestment then?

[Georgi Ganev, Chief Executive Officer]

Yes. I think we can look at these and perhaps get back to you, Magnus, offline. If that's okay.

[Magnus Råman, Research Analyst]

Yes.

[Georgi Ganev, Chief Executive Officer]

We don't have those numbers now.

[Magnus Råman, Research Analyst]

Sure, sure. I just have one final question and it's on the listing of Westwing. I believe you own 13.4% in the company after the dilution in the IPO and that should correspond to 2.7 million shares and that places mark-to-market value at just below SEK 700 million. So I was just curious to your valuation of SEK 750 million there? Is there something I missed?

[Georgi Ganev, Chief Executive Officer]

That was the end of the quarter, Magnus.

[Magnus Råman, Research Analyst]

Yes. I understand, but I guess that it hasn't traded, I can't see that it traded so much higher that, that would represent that value, perhaps on…

[Georgi Ganev, Chief Executive Officer]

Probably Fx effects included as well. So what we did -- I mean, the value in our balance sheet is as per 30th of September, based on euro-SEK rates as per that date, and then what we did was to take the pre-money valuation per share at the IPO and use that on our shareholding.

[Operator]

Our next question comes from Joachim Gunell of DNB.

[Joachim Gunell, Junior Analyst]

So a few questions on Betterment. We note here, in the quarter that they managed to increase its asset management in relation to the customers having been in a downward trend for the 2 quarters prior to this. So what is driving that development?

[Georgi Ganev, Chief Executive Officer]

Basically, there's been a strong momentum in Betterment for the past, let's say, year past quarters. We've seen some volatility depending also how the market develops. If there's some uncertainty in the market in general, then the inflow of new assets under management is slower. So there's no specific reason for Betterment growing slower in some quarter and a bit higher [ and this from my perspective ] .

[Joachim Gunell, Junior Analyst]

All right. No but I was referring to the assets under management in relations to the number of customers. So an ARPU, or what you would call [ unit rev ] like that?

[Georgi Ganev, Chief Executive Officer]

I see your point, but we have not seen any, let's say, isolated reason for that change.

[Joachim Gunell, Junior Analyst]

All right, thank you. And another question here on Betterment. How would you say that it is positioned for -- I mean, as a significant downturn in capital markets. I can only assume that some Betterment customers are seeing some red numbers on their accounts right now. So if you can just elaborate a bit on how you think Betterment is positioned for that.

[Georgi Ganev, Chief Executive Officer]

Of course. It's a very valid question. Of course, when you're managing people's money and you're going into a downturn or recession, that will affect you. However, if you see it from a different perspective, you can also say that the companies with the best cost efficient platform such as Betterment would actually have an opportunity to grow relatively their competition in such downturn. And I believe that, that in times where you have red numbers, you'll also, let's say, maybe will try to evaluate how much -- how many basis points you paid for that service to get. And we know that Betterment has a very competitive offer in the market with a high MPS score from the customers. So we see at the same time that even though it, of course, will affect Betterment's growth relative to competition, we actually believe they can be strengthened.

[Joachim Gunell, Junior Analyst]

That was clear. Final question on Betterment. I read an interview just -- it was a month back where the CEO and founders that it is building an institution and foundation to go public eventually, commenting that it would probably have to be at least twice as big as it is today. So in your view, what parameters should be met before that topic will even be on the table?

[Georgi Ganev, Chief Executive Officer]

First of all, we see this as a long-term growth story. So we're not as investors really keen to push an exit or an IPO, or whatever you call it, sooner than we need to. We believe that the company is in a very positive growth trajectory, it's a strong team, strong position. They are, after all, the largest independent online advisor, actually in the world. But most probably, the founders are right. The company needs to reach a significant bigger size before it can actually continue to grow in the public environment, but again, with that said, we have no rush in this -- on the topic.

[Joachim Gunell, Junior Analyst]

Thank you, Georgi. My last question, it's around this types of new investments that we're seeing, more venture capital like. I mean, you don't press release all of them. So in this quarter, we have seen investments, which have had a quite material impact on your net debt. So could you just -- if this is something that we should expect going forward? Or will you try to press release so that we can have a better understanding of the implications of your net debt.

[Georgi Ganev, Chief Executive Officer]

I mean, first, when it comes to press release, it's also in relation to the size of the investments, obviously. And I would say that the activity in this quarter was very high. As said, 6 new companies in the quarter, making it 9 new companies year-to-date. And I would expect the company -- the number of new investments to go down. But we'll say, the reason for press releasing some of them is that they are larger. And also on that -- our website will always be updated with investments independently, if we proactively send a press release or not.

[Operator]

Our next question comes from the line of Derek Laliberte of ABG.

[Derek Laliberte, Analyst]

I had a question on the emerging market exposure, whether you have a clear ambition to reduce this given that -- I mean, you sold Avito several years ago, the new investments haven't really been in that area and the portfolio's still over 30% exposed to this markets.

[Georgi Ganev, Chief Executive Officer]

Yes. I mean, our strategy, as we also disclosed on our website, is basically to focus on Europe and U.S. for new investments, and we have a special [ folks that we have set ] in Nordics. We want to be more active in, let's say, older stage companies than the startup community. That said, with the right partner, or with the right angle through our existing invested companies and go further in the emerging markets. However, what we say is that as investors, we are willing to take risk. And at Kinnevik, we have always had the DNA to take, let's say, a big bets, but when you are compounding risks, including emerging markets exposure, early-stage businesses, tech ventures, of course, the risk can be too high. And therefore, we have said for new investments, we mainly focus on Europe and U.S. And the current exposure in the emerging market is relative to our, let's say, to our old investments. But if we then specifically look at the company like Millicom, what we have said for several quarters now is that we really support the company strategy to pull out, out of Africa and focus on Latin America. So of course, that's also a testament to our active ownership and try to steer the company into regions where we feel that we have more control of the risks.

[Derek Laliberte, Analyst]

And a question on the GoEuro, it seems like really exciting company on a great idea founded [indiscernible] et cetera. I was wondering what's the main focus for this company, now actually the capital raise and the main challenge as they have, I mean, if we go and look at the website, I mean, it still seems like it's -- I mean, in a very early stage on this aggregate different methods of travel is not really seem to be up and running so what's the main...

[Georgi Ganev, Chief Executive Officer]

Yes. I think that they have 20 million customers using their services, many of them in the mobile app. So of course, it's already today a well-functioning service for customers from 120 countries. But having said that, you're right that their, let's say, focus until today has more been on the back end side. So they have developed a unique supply side of the business, integrating these 600-plus transportation companies on the ground, which I think, is a core of their value proposition. With now a strengthened, let's say, financial position, they are able to continue to develop and to improve the front end interface for the customer by developing the technical platform even further, hire the right people, of course, to strengthen the team and continue to grow. So we believe that what they have built so far is a very strong value proposition and with this capital and the right investors in their base, they have now the ability to scale.

[Operator]

Our next question comes from the line of Marie Scheja of Nordea.

[Marie Scheja, Analyst]

I have a question regarding the focus on unlisted ventures and increased dividend gap. Could you give any comment on common dividends and that we have no chance to see the MTG distribution as a part of the dividend?

[Joakim Andersson, Chief Financial Officer]

This is Joakim. So yes, I guess, what we have done -- as we said before, we are not worried. We see potential based on the guidance in Tele2. From Tele2-Com Hem, we see some potential there. So we are not particularly worried about the dividend gap as such. And also, the way we look upon it is that we don't look only on the dividend gap, but from a total consolidated cash flow position where we have income and outgoing cash flows and then tied out into the leverage target. So it's kind of a bigger question than on the dividend gap in our minds, but we are very comfortable.

[Marie Scheja, Analyst]

Yes. But since you're focusing more and more on -- of the portfolio on the unlisted ventures that doesn't really pay any dividend and should you adjust your dividend after this change of focus?

[Joakim Andersson, Chief Financial Officer]

No. We don't see any reason to do that. And the focus on the investment side is rightly into the private side of things. But no, we don't see any reason to do any adjustments. No.

[Georgi Ganev, Chief Executive Officer]

I think, you can say that we, of course, appreciate that distributing MTG that as a company that gave us let's say, proceeds. It was still a relatively small amount, 200 million, and with let's say, the consensus we have on the new Tele2, we expect that company actually to increase its dividend over time. To answer your question, with this equation now going forward like-for-like, we don't see any reason for adjust our financial position and targets.

[Marie Scheja, Analyst]

Okay. Super. And also given the recent poor performance of Zalando and your conviction in the case, no chance you could increase your holding in the company?

[Georgi Ganev, Chief Executive Officer]

I mean, it's a very good question because giving the -- what we think is an overreaction on the share price of Zalando, you can say it is time for buying. But again, we need to also go back to our exposure towards balancing the share. So we are the largest owners of Zalando owning 32% and it still represent the large part of our portfolio. So I think that is more the question from us, whether we should also buy or sell the company. But having said that, as I've said in the report, and as I've said when I commented the press release when Zalando a month ago actually issued their profit warning, we think that this, let's say, short-term change in the guidance for 2018, that's not really impacted all the potential of Zalando's, let's say, growth and ability to deliver on the long-term targets. What Zalando has is a unique platform within e-commerce and a leading position within fashion, but only having, let's say, a bit more than 1% of the fashion market in Europe means that it's a very good, let's say, room for growth going forward and this trend from offline to online, will just continue. And with the ability to continuously innovate and improve the customer services that they have as well as strength and their partner program position, which I think is extremely important. And broaden the assortment within cosmetics that they have done now in the recent past, they are executing on the strategy exactly as we would like them to do. So we are confident, but the questions about buying is more going back to our portfolio strategy.

[Operator]

Our next question comes from the line of [ Liana Osterby ] of [ Kalii ].

[Unknown Analyst]

I've got 2 questions for you. First of all, I was a little bit curious if you could say a little bit more on Global Fashion Group, you have a new management team in place now for a little bit. And I was wondering if you could say in addition to sort of the widening of the assortment, what's going on, on a centralized level? You've talked that there are some synergies that you can extract between the company. So how is that proceeding and what is going on? And then the second question is on Babylon. And the new agreement with Prudential, I assume that's just sort of leasing out the platform. So how does that business model differ from what they have in Rwanda and with the [ NHS ] in the U.K.? And is that how they will continue to go forward by, as you're licensing the platform, rather than expanding themselves organically into new markets?

[Georgi Ganev, Chief Executive Officer]

So I'll start GFG then. As we've said now, we've had 2 new co-CEOs for some time and they have developed the business in a very positive way. We see improvements in growth in local currencies in all regions as well as improved profitability. And they look at HQ and synergies. I mean, they have definitely strengthened the [central buying team ] , and we have also discussed directly with the local management of some companies that can assure me that there are some very concrete activities now paying off and how to share everything from best practices but also share, let's say, buying power in acquiring these global brands but also private label and so forth. And I think the results speak for themselves, even though we had a very tough situation in Russia due to the ruble and Brazil, due to the real. And on top of that, this strikes on truck drivers in Brazil, we are outperforming all of the, let's say, public peers that we have been compared with in these regions, and we, as I say, growing 20% for the group. In Iconic that we know, together with Zalora, we have very strong position growing as much as almost 40%. So yes, I think, that even though we don't have any more specific, let's say, details disclosed on exactly the central strategies -- central activities, we see clear result from them. When it comes to Babylon, exactly as you pointed out that the business model of licensing the platform to Prudential in Asia is different from, let's say, more B2C services. But remember that Babylon has spent a lot of time and effort to build this platform, and it makes a lot of sense to have 2 business types: one, enterprise sales model we actually [ find ] these partnership; and one B2C model. And I don't think it's going to be either/or going forward, but actually, both of these models together. Because it will be very difficult to scale these businesses only on the B2C side but on other hand, if you turn into a platform provider, it's a different thing. So what we see now is that Babylon developed its platform in order to increase the efficiency on its own B2C services. And with that, let's say, proof point, and with that effect and efficiency, they have the best case -- case study in order to get new strategic partnerships. And we have no information of, let's say, other partnerships looking like Prudential. But I would say that, that is, of course, all around the globe, a huge potential going forward.

[Operator]

Our next question comes from the line of Nizla Naizer of Deutsche Bank.

[Fathima-Nizla Naizer]

I just have a couple of questions on my end. Firstly, on GoEuro, which is quite a sizable investment that you made, could you give us a little bit more color on the size of the company, how much is Kinnevik's stake at the moment? How big is the company in terms of revenue? How fast is it growing? Is it profitable? Some of the KPIs around GoEuro would be great. And secondly, when you look at your Q3 investments, out of SEK 1.5 million that you invested, half of it almost is in Financial Services. Could you just give us an understanding as to why you think Financial Services is at a tipping point? Or is a lucrative sector to sort of invest in going forward? And maybe highlight some of the more promising companies you've ventured into out of those few that you've done in Q3.

[Georgi Ganev, Chief Executive Officer]

Thank you for the questions. If I start with GoEuro, unfortunately, I have to disappoint you, because we are also then bound to the information that the company has disclosed. So when it comes to, let's say, valuation, which is then in relation to our own stake, we have no comments on that one for the time being. Same thing with the KPI. So we need to, on the back of what we can disclose, unfortunately say that what we can say, we have already told the market. Going forward, as with all of our private companies, so with the companies in the private portfolio, we hope to be able to disclose more KPIs. And this is -- has to do a lot with how competition would use these numbers and so forth. But I understand your interest into KPIs, and I can only say that we look forward to come back to that question. When it comes to investing in new companies and financial services, if we look at our portfolio today, we have an overweight within our telecom sector and our e-commerce sector. Telecom, because we have these large listed public assets and in e-commerce, because we have Zalando, so naturally being a large part of our total NAV as well as Global Fashion Group. So what we've said, even though we have done now a few investments in the, let's say, e-commerce/marketplace area, we focus a lot on finding new, let's say, the new icons in the market within financial services than healthcare. So that we did more of them in the Financial Services had not a specific reason that we feel that, that is in a different, let's say, stage than healthcare. But since that, we had addressed and we had a dialogue with these companies that we all think are brilliant ones. And our investment strategy is to go in with a more thematic approach. And as you see, some of these companies are a typical B2C service as with Monese, or a Neo Bank or a Challenger Bank in the U.K. But Deposit Solution being an open banking interface for banks and Bread being in the, let's say, the boundaries of financing and e-commerce support for e-tailers. So if I look at Bread, we feel that it's a natural way for us to expand our knowledge with an e-commerce in the ecosystem as we did with Budbee and [ laugh my ] logistics, because we understand what e-tailers typically need in -- from a payment and an analytical service. And therefore, we could do a due diligence on Bread and feel comfortable that they have extremely good value proposition in the market. And for Monese, we have been looking at Neo Banks for a long time, studying the big ones like N26 and Revolut and so forth. We think that Monese have very clear customer segmentation and also a positive trend and they're unique in attracting customers that actually choose this bank for the [ current ] account. So not only as an add-on service, but actually having Monese as the main bank. So that was the specific reason for investing in Monese. In general, Financial Services is a -- I mean it's a huge, is a vast market opportunity. And it's a industry that needs to be, let's say, digitally transformed. And again, with our DNA within tech companies, it's natural for us to look carefully into that sector.

[Operator]

[Operator Instructions] And there are no further question at this time. Please go ahead, speaker.

[Georgi Ganev, Chief Executive Officer]

So thank you very much for listening in and for all the questions. And just as a last reminder, we would like to inform you that we will report a results for the full year of 2018 on the 8th of February, 2019. So with that said, thank you very much. Have a nice day.

[Operator]

This now concludes our call. Thank you for attending. Participants, you may disconnect your lines.