Kinnevik AB

STO:KINV B

Earnings Call Transcript 2021-Q3

[Operator]

Good morning, everyone, and welcome to the presentation on Kinnevik's results for the third quarter 2021. I am Georgi Ganev, Kinnevik's CEO. And with me today is our CFO, Erika Söderberg-Johnson; and our Investment Manager and Healthcare Lead, Christian Scherrer. For the Q&A part of this call, we're also joined by our Director of Corporate Communications, Torun Litzén; and our Head of Strategy, Samuel Sjöström.Let's move to Page 2. We will begin with the strategic highlights of the quarter, and then move on to a deep dive into our health care portfolio and the progress within fintech and our enabler strategy. After this, we will go through our financial position and give you an updated indication of our expected investments for the remainder of this year. So let's move on to Page 3, where we have summarized the key strategic highlights during the third quarter. During the past few quarters, we've been very active both in finding and investing in new, exciting companies in a competitive environment and in supporting our existing companies. And in the quarter, Betterment raised $160 million in new capital to accelerate the record growth the company has delivered year-to-date, leading to a significant uplift in valuation. Cityblock raised almost $400 million, increasing the valuation to over $6 billion and doubling the fair value of our stake at 2x or SEK 2 billion. The funding round establishes Cityblock as a leader in value-based Medicaid and other complex populations. The need to close the care gaps for underserved communities is as pressing as ever, and the company is growing rapidly as payers are looking for a value-aligned partner. Babylon reaffirmed its 2021 and 2022 growth guidance and secured $200 million in sustainability-linked financing as it nears completion of its SPAC merger transaction, and we expect the company to trade on Friday this week. We remain focused on reallocating capital across the portfolio into new and exciting growth companies, ensuring we maintain the momentum of our strategic transformation and capture the opportunities that arise in a very active venture and growth capital market. This quarter, we invested in 4 new companies in our focus sectors. We invested in Lunar, the leading Nordic challenger bank already in July. Since then, we have also added Spring Health, a company that is making mental health fundamental to health care; and Quit Genius, a digital clinic that helps people conquer their substance addictions. In the enabler space, we invested in Sure, a company offering a complete end-to-end SaaS insurance platform. And I'm very proud to say the strong momentum we see comes on the back of more and more founders choosing Kinnevik as one of their preferred partners based on the expertise, network and track record we have established over the past few years. Something that also supports this momentum is that Tele2 announced its divestments of the Netherlands joint venture and its intentions to pay out an extraordinary dividend, strengthening our financial position by more than SEK 2 billion. And lastly, last week, we announced our support of the deepened partnership between VillageMD and Walgreens. The partnership has been a key growth driver, and we were happy to facilitate an acceleration of the rollout of the Village Medical at Walgreens practices by committing to sell a minimum of $340 million stake. Considering the growth opportunity of this accelerated rollout, we were keen to remain a significant investor and are happy to retain around 60% of our investment in the company. In terms of our net asset value, the upwards revaluation of our private portfolio was balanced out by negative share price developments at Teladoc and GFG, leading to a NAV remaining quite flat compared to the second quarter. On a year-over-year basis, our NAV was up by more than 21% to SEK 75.8 billion or SEK 273 per share excluding Zalando. Our private portfolio grew by almost SEK 4.5 billion, of which around half was due to net revaluations and half due to the investments I just mentioned. Erika will take you through the development of our NAV in more detail as well as the valuations of our unlisted companies in a few minutes. But first, let's take a look at the development within health care services, starting on Page 4. And for this, I will now hand over to Christian Scherrer, the investment manager who leads our health care team.

[Christian Scherrer, Investment Professional]

Thank you, Georgi. The pandemic had a profound impact on global health care systems and highlighted systemic issues within the sector. But it also accelerated technology adoption in the last 18 months to the extent we expected would happen over the next decade. This resulted in significant value creation in our companies and opened new markets and opportunities in health care we can now start to explore. The systemic issues are not new. And over the last 5 years, we invested over SEK 5 billion in companies that tried to solve them. These issues center around aligning interests between payers and providers to deliver more value to consumers, data interoperability and equal opportunities in society to get access to high-quality care. We are seeing increased urgency to solve these issues and, therefore, more demand for our company's services. Our thesis continues to receive external validation from incumbents and investors alike. As Georgi mentioned, Walgreens deepened its partnership with VillageMD by investing a further $5 billion and increasing the ambition level to 1,000 clinics nationwide by 2027. Cityblock received yet another substantial valuation step-up through the funding round led by Softbank. We see this as a strong proof point of value-based care expanding beyond Medicare into Medicaid and other markets. Our total investment before this round is up more than 6x since we first invested only last year. As we continue to build out our health care portfolio, we will expand in adjacencies such as data and automation but also double down in value-based and virtual care delivery. We will back companies that offer data-driven preventative care, increasingly focused on specific conditions that are underserved. Livongo was a good example in diabetes, and our investments this year reflect the same thesis: Parsley Health in women's health; Spring Health in anxiety and depression; and Quit Genius in substance abuse, all conditions that are currently top of mind for health insurers and employers. On Page 5, we will look at the 2 new additions to the portfolio this quarter. We invested $100 million in Spring Health in a very competitive funding round. Spring Health is a comprehensive mental health provider for the U.S. workforce, serving employees and their families with high-quality, data-driven and personalized care. Prevalence of anxiety and depression has skyrocketed globally with 1 in 4 reporting symptoms during the pandemic, up from 1 in 10 prepandemic. Employers are facing a big challenge as their employees are feeling the strain from lockdowns, mourning lost loved ones and the lack of access to child care. Demand for compassionate care and mental health is at unprecedented highs, and we see it continue to increase further in 2022. The stigma in mental health has largely disappeared, and hence the addressable market is expanding. Unsurprisingly, mental health care is a competitive market today. We believe Spring Health is unique for several reasons. First, it's the most comprehensive solution we've seen replacing full-suite employee assistance services. Second, the company is expanding the product to serve entire families in an integrated way. Third, the company is built on the most advanced data infrastructure that personalizes care pathways and, therefore, reaches outcomes faster and at a lower cost. We see this as a key advantage to win as this market moves towards value. Another exciting addition this quarter is Quit Genius. Quit Genius is a digital clinic helping individuals conquer their substance addictions such as smoking, alcohol and opioids. What drove the founders to start 4 years ago was the realization that despite the U.S. spending over $40 billion on treatment facilities, more than 90% of people suffering from addiction never get access to evidence-based care. Substance abuse, not unlike anxiety and depression, is a behavioral health condition seeing rapid increase in prevalence as we suffer through the effects of the pandemic and is becoming an increasingly challenging issue for payers and employers. We were thrilled to co-lead the company's $64 million Series B financing alongside Atomico. Proceeds will fuel expansion in the U.S. and long term support their ambition to help 100 million people conquer their substance addiction in the next 10 years. Spring Health and Quit Genius align with Kinnevik's vision of a transformed health care sector, driving up quality while providing seamless access to care. These companies are doing just that in areas that historically have been drastically underserved and underfunded. With that, I will hand it back to you, Georgi.

[Georgi Ganev, Chief Executive Officer]

Thank you for that, Christian. There is so much to do in the health care sector, and I'm thrilled with these new additions to our portfolio. If we then turn to Page 6 to look at the developments within our fintech and enabler portfolio. After a successful round at Pleo earlier this year, the momentum in our fintech and enabler portfolio continued to build this quarter. Betterment, which we first invested in back in 2016, has firmly established itself as the largest independent digital investment adviser with $32 billion in assets under management and nearly 700,000 clients. In the quarter, we took part in Betterment's $160 million funding round to support the continued growth, allowing Betterment to cement its category leadership position by hiring the industry's best talent and to further innovate in its product suite, including its offering for small and medium-sized enterprises. Kinnevik invested $8 million as part of the round, which was concluded at a valuation more than 40% above last quarter's carrying value. We also continued to execute on our enabler strategy that we touched upon a few quarters back. One of the key themes we have identified within the enabler space is embedded finance, and our activity started in 2018 with our investment in Bread, which we recently exited, realizing an IRR of more than 30%. Across our sectors, from health care to e-commerce, our portfolio companies use embedded finance to deliver everything from payment solutions to lending products, drawing on our extensive work in this space, many times in collaboration with our existing portfolio companies who use these enabler businesses. This quarter, we invested in Sure. This company offers a complete, end-to-end SaaS insurance platform that enables insurance companies to distribute their product digitally and enables brands to distribute insurance products to their customers' base to provide a better customer experience. We were impressed by Sure's state-of-the-art tech platform, which has advanced far beyond what you would expect from a company at this stage, and by the clear vision of the founder, Wayne Slavin, and the company's stellar financial performance. Drawing on the network effects of our enabler strategy in sourcing and diligencing the Sure opportunity, we were actually helped by our friends at Betterment, who are happy customers of Sure's services. If we now turn to Page 7. We will focus on our work within diversity and inclusion. We have been hard at work with diversity and inclusion over the past few years and are focused on driving real change in how we operate, behave and think. And we have made significant progress. Last report, we highlighted how our investment team had increased from being made up of 18% women at the end of Q2 2020 to 38% in 2021.D&I is also an area where we offer hands-on support to our portfolio companies as we are convinced that diversity and inclusion is a key driver of transformation and that our commitment will ensure we build stronger and better companies that can become the disruptors of tomorrow. Therefore, I was immensely proud when we last week were awarded the Allbright prize. It is given each year to the company at Nasdaq Stockholm that shows the strongest results in gender equality. The prize demonstrates that we are on the right path with our efforts in diversity and inclusion. And Kinnevik has a history of paving the way for new ideas in traditional and outdated environments. We always try to set bold ambitions, and we hope to stay at the forefront of the industry as we expand on our efforts. Let's now move over to Page 8 for Erika to go through the details of valuation changes and NAV development.

[Erika Soderberg-Johnson]

Thank you, Georgi. The fair value of our unlisted growth assets increased by almost SEK 4.5 billion or 15% in the quarter. Of this, new investments accounted for SEK 2.3 billion and net revaluations SEK 2.2 billion. The value increase was driven primarily by Cityblock and Betterment. In addition, Tele2 traded up by 11%. These positive changes were offset by negative share price developments in Teladoc and Global Fashion Group. With SEK 2.3 billion net invested, the total value of our Growth Portfolio amounted to more than SEK 50 billion at the end of the quarter. And now I would like to comment on the key valuation changes. On the back of the recent fundraise, our valuation of Cityblock increased by almost 2x from last quarter. This implies a fair value of our 8% stake of SEK 4.1 billion and means that Cityblock is valued broadly in line with listed peers on a 2022 basis. Our holding in Betterment amounts to SEK 1.6 billion and is valued in line with the valuation in the company's funding round in the third quarter of 2021. Our valuation is corroborated by forward-looking revenue multiples of digital wealth managers with reference to financial technology companies and SaaS businesses with similar financial profile to that of Betterment. With Betterment performing strongly, our valuation is in line with peers' on a forward-looking basis. The fair value of Kinnevik's 9% shareholding in VillageMD amounts to SEK 7.7 billion and corresponds to the valuation in the recently announced transaction with Walgreens Boots Alliance. The valuation remains fairly stable compared to the previous quarter, down around 5% in spite of peers trading down by around 30% to 40% on average as VillageMD's growth trajectory is strengthened through the deepening of the Walgreens partnership. The fair value of Kinnevik's 37% shareholding MatHem amounts to SEK 1.5 billion and corresponds to a decrease of 12% compared to the second quarter. The company is performing in line with expectations, and the write-down this quarter is solely driven by multiple contraction in the peer group. Let's turn to Page 9. Our net asset value amounted to SEK 75.8 billion at the end of September or SEK 273 per share. This is down SEK 0.3 billion compared to the second quarter and represents a net asset value decrease of 0.4% in the quarter. The Nasdaq traded down 7% and the OMXS30 was essentially flat, while our total shareholder return was down 10% in the quarter due to our NAV premium contracting. With yesterday's closing prices of our listed assets, our net asset value was SEK 74.3 billion, 19% up so far this year excluding Zalando. Now please turn to Page 10 for an update on our financial position and capital allocation framework. During the quarter, we invested a total of SEK 2.3 billion, whereof SEK 205 million was deployed into our existing businesses. Our largest follow-on investments in the quarter were SEK 76 million into Cityblock and SEK 70 million into Betterment. We are expecting to invest an additional $26 million into Cityblock in Q4 as part of this quarter's funding round. We added 4 new companies to the portfolio during the quarter, investing SEK 2.1 billion in total into Lunar, Quit Genius, Spring Health and Sure. This brings our net cash position at the end of the third quarter to SEK 1.8 billion, down from SEK 4.3 billion at the end of Q2. When including the VillageMD divestment and the extraordinary dividend proposed by Tele2, the pro forma net cash position amounts to SEK 6.9 billion. This gives us a continued very strong financial position and full flexibility to maintain the momentum in our strategic transformation. As for our capital allocation, our original expectations for 2021 were to invest between SEK 2.3 billion and SEK 4.6 billion, with an overall allocation into new investments relative to our framework, adding 4 to 6 new companies to our Growth Portfolio. Due to the successful momentum of recent quarters financed by the material capital releases from VillageMD and Tele2, we now expect to invest around SEK 6 billion in total during 2021, and we will continue to add new companies to the Growth Portfolio also during the fourth quarter. With that, I would like to hand back over to Georgi for some closing remarks on Page 11.

[Georgi Ganev, Chief Executive Officer]

Thank you, Erika. Although the COVID crisis is subsiding, parts of the world are still severely affected, and uncertainty regarding the global economic recovery remains. At the same time, we are in a period when the creation of innovative companies is greater and faster than ever, enabled by tailwinds and such as API adoption, remote talent and rapidly shifting customer preferences. Consequently, the number of private companies valued at over $1 billion has exploded over the last 12 months. In a period of increased volatility, high risk premiums and multiple contractions, we remain wary of the market which we operate in. But we hold to our dedication to fast-growing businesses with strong unit economics as the most sustainable way to generate long-term shareholder value. We remain focused on making the most of our proven ability to identify consumer trends ahead of the curve and back digital businesses with the potential to become category winners. We are proud of our successes to date and are working hard to continue replicating these successes by backing the next generations of digital winners. That said, we are now ready to answer your questions. So operator, please open up for Q&A.

[Operator]

[Operator Instructions] We have the first question from Derek Laliberte from ABG.

[Derek Laliberte, Research Analyst]

Congrats on a quite impressive NAV development during the quarter despite tough market conditions. So I was wondering about Betterment here. It's great to see the financing round and the, of course, the accompanying value uplift as well. But I was wondering, why are you only investing $8 million in this quite big round of $160 million in total? And also, I was wondering if you could just remind us what the profitability is like for this company. And also, if you could give some more details on what the funds will be used for.

[Georgi Ganev, Chief Executive Officer]

Thank you, Derek. So regarding the Betterment round, as always, when we allocate capital, it's a trade-off of where we think we would like to invest more money. We are already a relatively large owner in Betterment, and we also welcome new investors to the cap table. So there's nothing to do with our belief in the company's future. We've been supporters of Betterment since 2016. At that time, the company had roughly $4 billion of assets under management. Today, it's $32 billion. So it's an impressive journey. And regarding profitability, we've always said that this is a scale business, right? So you need to go up to these levels of $30 billion, $40 billion in assets under management in order to get to this profitability. But I think what's really interesting now is that the company is entering a new phase, adding new kind of product sectors or product suites, if you will. So the capital will be used to expand these new kind of verticals further and to attract talent, which is, of course, it's a talent who are out there, as we all know. So this money will be used to further expand these verticals. And the new CEO, Sarah, is in place now, and I think the strategy that has been presented to the Board is something that we support very much.

[Derek Laliberte, Research Analyst]

That's perfectly clear. And then just briefly on Cityblock here, basically the same question about the invested amount in the latest round. But I think Erika commented on this, but I didn't get that part. It sounds like the line was cut off. But did you say something about that? And also, I was wondering what -- who were the other sort of major investors in this round when it comes to Cityblock.

[Samuel Sjostrom, Head of Strategy]

Samuel here. So we're going to invest $35 million in the Cityblock round, but we've only managed to close $9 million so far. So it's going to be an additional $26 million next quarter. The round was very large, almost $400 million, and it was led by Softbank.

[Derek Laliberte, Research Analyst]

Perfect. That's exactly what I was looking for. That's all from me.

[Operator]

Next question from Nizla Naizer from Deutsche Bank.

[Fathima-Nizla Naizer]

I just have a question on the post-COVID world, if you can call it like that, that we're sort of currently living in. What -- in which sectors in your view, Georgi, have been sort of the structural winners even in a post-COVID environment? So the basis of this question is a lot of the digital businesses did succeed or did do really well during a pandemic-like condition, and there were all these concerns that once things normalize, some of these businesses will also not see continued growth. And based on your exposure to the digital businesses that you own, what sectors in your view are continuing to do well? And which sectors are facing challenges, if you can put it like that? Some color there would be great.

[Georgi Ganev, Chief Executive Officer]

So thank you for the question. I mean as we've said before, the question is not whether we are growing as fast these kind of months compared to the firing COVID last year at the same time with lockdowns. Obviously, there will be some kind of changes in that growth profile. However, it's -- the question is really whether we will have a higher penetration of these services post COVID. And we believe that is clear, but that's the case. So we will go back to some normal growth in certain sectors, for instance online groceries, but from a much higher kind of penetration online. Looking today, we have very clear proof points that, for instance, in digital health care, this trend will not go backwards. Technology is something that payers and providers need to leverage in order to cope with the increasing demand for health care services. So for us, that's a structural trend that will continue for the next 10, 20 years. If we look at some of our enabling services that are kind of helping other e-comm companies to grow, such as Budbee, for instance, in the Nordics, we also see very, very strong growth numbers. So again, it's a structural shift and a structural trend. But in some specific areas during kind of the lockdown last year, of course we saw some kind of hypergrowth, for instance, in online groceries with extreme growth target -- growth figures. Those will be less impressive, let's say, these months. But on average, they will still be very, very strong. And more importantly, as I started off with, we will start from a much higher base with strong cohorts of customers.

[Fathima-Nizla Naizer]

Perfect. That makes a lot of sense. And I'm not sure if I missed it, but the potential sale of your stake in VillageMD, what do you intend to do with the proceeds because it is quite a substantial sort of inflow, $340 million if I remember right? So any color on what you intend to do with your increased liquidity position once this does come your way?

[Georgi Ganev, Chief Executive Officer]

Yes. You're absolutely clear. It will -- it's close to SEK 3 billion and, of course, a substantial amount. But again, it's 100% in line with our strategy and what we have communicated earlier to dynamically reallocate capital. So we will use these proceeds and invest in new kind of growth companies that we believe could be the category winners of tomorrow. So we've seen a few examples this quarter of companies that Christian went through on the health care side: the enabler service, Sure, for instance; and earlier this year, in July, Lunar. That's kind of the past. The future will probably look more or less the same. So we will add a few companies in Q4. And again, this is a way for us to maintain a healthy financial position so we can support our companies not only in good times but also in bad times as well. So that's the purpose.

[Operator]

Next question from Johan Sjöberg from Kepler Cheuvreux.

[Johan Sjöberg, Equity Research Analyst]

And I have so many questions I don't know really where to start, to be honest. My first question has to do with your -- you being invited to new investments. I would love to hear a little bit more about that and how you have positioned yourself. Georgi, you mentioned yourself as being the leading investor into digitalized health care in Europe. Could you talk about what sort of benefits you see from that in terms of invitations to early-round financing and investment, please?

[Georgi Ganev, Chief Executive Officer]

Yes, of course. I can start off with that. So, I mean, as I've said before, if you look today, at least to our understanding, it's very difficult to get this type of exposure to the digital health care globally definitely in Europe. And for us, that means a lot because this track record of being a kind of successful investor in this sector has created a lot of partnerships and strong bonds, bonds with founders, management team and co-investors. And since we're looking for large minority stakes, it's not -- we're not the kind of the only selected partner typically in a funding round. We would like to collaborate in this ecosystem and kind of increase the brand of Kinnevik or make it stronger over time. And what we see now in rounds is that we are selected among other shareholders in these very competitive rounds. Although there are really strong names, top-tier kind of investors sometimes even offering a higher valuation of a certain company, we're anyhow selected. And of course, that is a very strong testament. But I can say we are selected on a generic basis or in every sector. It's really about our sector focus globally that helps us to actually achieve this type of position. When it comes to kind of the Nordic portfolio, it's a little bit different because here, I think we've had a stronger brand since a long time, we have our legacy and we have our network. So here, we can be a bit more sector agnostic and make sure that we back companies earlier on in the journey. And I think a few years back, people maybe didn't think that some of these companies would make a different on Kinnevik as a whole. But looking today, as companies like Oda emerging out of Norway, Pleo emerging out of Denmark and Budbee emerging out of Sweden, we have 3 strong examples and actually more to add that actually have made a great difference on the total. Therefore, that is helpful when a lot of investors, both U.S. based but also Central European based, are looking more and more into the Nordics, we have this platform. And lastly, I would say the collaboration with earlier-stage fund is instrumental for us. So looking at some of the investments we've done this quarter, we have shareholders like Northzone in the cap table that, of course, we have a close dialogue with. So that's very, very strong that we can help each other to have the common view of how to build strong companies for the long term. And of course, that is something I would say, that the partnership with other type of investment vehicles, [ Feandum ], Northzone, Atomico, for instance, just to name a few, have been helpful.

[Johan Sjöberg, Equity Research Analyst]

Great. Just also looking at your investments for this year, you basically guided for SEK 2 billion in investments. And of course, that's a -- can change. But would you -- how big a portion of this is earmarked, would you say, for health care in Q4? And can you give us some color on that of where you're going to put these extra $2 billion?

[Georgi Ganev, Chief Executive Officer]

I mean I can't comment on the exact type of investment because that's kind of future communication. But we hate to earmark anything, to be honest. The only thing we've done basically is to have this commitment for female-founded and female-led businesses. It was 10% of our total budget within 1 year. that we have overshot big time. And already this year, we're rather at 20% than 10%. So that's great. But I think apart from that, we would like to look at each individual company case by case. In health care, we've built up this momentum, as I said earlier. So when we have a good chance to invest in the absolute best company within a category and it fits our strategy and it's kind of helped us to diversify our health care portfolio, we will always be open for that type of investment. But having said that, we are also looking at expanding the kind of food ecosystem, as we've said before. We started downstream, and we are going backwards in the value chain, if you will. And not to forget are kind of broader consumer services and enabler services. So I think we are -- we're today well positioned to invest in these focus sectors, and we are more kind of analyzing companies and teams case by case rather than trying to kind of evenly distribute the capital.

[Johan Sjöberg, Equity Research Analyst]

I love your investment pace. And I just want to go back to your comment that you've seen your -- you said that you thought that valuations in -- at the beginning of the year was quite high, and you thought that it was a good thing to have piled up with cash. Now you're actually obviously increasing your investment pace. Is this because, do you think, valuation has come down or not?

[Georgi Ganev, Chief Executive Officer]

I mean it's definitely not because of that. We think that being a long-term investor, we again need to focus on the best companies that will enjoy a tailwind, structural tailwind, for many years to come, 10 years, 20 years. That's what we're looking to invest, right? And since we're investing ahead of the curve and kind of boldly backing these new business models, it's always some sort of risk taking that is far beyond the multiples at a given time. It's more about our understanding of what actually could become the potential future. So many of these companies we invest in today like Sure, for instance, but also Parsley Health, Quit Genius and Spring Health, it's based on our conviction rather than looking at the exact multiples. Of course, as an investor, we never want to overpay anything, but we believe that the potential upside on all these companies will, over time, kind of be -- that's basically what we should focus on rather than trying to buy cheap, if you will.

[Operator]

Okay. So we don't have any more question for the moment. [Operator Instructions] We have one new question from the last person once again. Hello again.

[Georgi Ganev, Chief Executive Officer]

Thank you very much for your questions. I think we lost -- we have a question?

[Operator]

We can you, sir. Go ahead.

[Johan Sjöberg, Equity Research Analyst]

But sorry, Georgi, I got cut off here. Last one if it's fine.

[Georgi Ganev, Chief Executive Officer]

Quiet from you.

[Johan Sjöberg, Equity Research Analyst]

Hello?

[Georgi Ganev, Chief Executive Officer]

Yes, we hear you.

[Johan Sjöberg, Equity Research Analyst]

Oh, yes. Sorry about that. Yes, my question -- I need the transcripts on it. But just coming back also to the upcoming Babylon SPAC now, which you -- where it's going to be voted today, I'm a little bit curious on how you view that. And, I mean, when I'm comparing the IT -- Livongo, which you did, you actually committed new capital into Livongo. But you're not doing that now. Is that -- in Babylon, is that because you think that there are better investment alternatives out? Or how is your thinking about that? Because, I mean, historically, when I especially listened to you, Georgi, about, Babylon, I get super bullish vibes from you on here. So I wonder why you're not committing capital to Babylon.

[Georgi Ganev, Chief Executive Officer]

Yes. I think it's a relevant question. But let us look at the health care portfolio now compared to what it was back in 2018, 2019, right? We have 3 buckets, and 2 of them are very large. That's value-based care and telemedicine. And then we have more kind of data-driven, infrastructural services, if you will, helping both payer and providers become more efficient. So our distribution of capital needs to reflect how we have structured our health care portfolio and, of course, how much we own in each of these companies. So we are taking big bets on some kind of companies early on in their journey, trying also to kind of get this exposure to the entire health care market. So this quarter, again, we discussed Spring Health and Quit Genius as 2 new opportunities to kind of drill down in more niche players, whereas we have great exposure to value-based care and telemedicine in general, if you will. So Babylon being a relatively large shareholder and that combination of how -- what to back at what stage is the kind of the reason for us committing a smaller ticket this time than what we did with Livongo back in the days.

[Operator]

Thank you. We don't have any more questions. Back to you for the conclusion.

[Georgi Ganev, Chief Executive Officer]

Thank you very much for listening in and for your questions. And as a reminder, we will report the results for the full year of 2021 on the third of February 2022. Now everyone, stay safe.