Vef AB (publ)
STO:VEFAB
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Vef AB (publ)
Earnings Call Analysis
Summary
Q2-2024
VEF's latest earnings call highlights a stable NAV with expectations for a rebound driven by key portfolio companies like Creditas, Konfio, and Juspay. Creditas reported its first profitable quarter and anticipates reaccelerated growth. The broader portfolio, now majority breakeven, is forecast to achieve 30% revenue and 60% gross profit growth next year. Confidence in NAV growth remains strong despite currency headwinds. VEF's focus is on sustaining growth while strengthening the balance sheet, aiming for more investments and possibly partial exits in 2024-2025.
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Good day, and thank you for standing by. Welcome to the VEF Second Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.
I would now like to turn the conference over to CEO, David Nangle. Please go ahead.
Super. Thank you, Radia. Good morning and good afternoon, everybody, and welcome to the VEF Q2 First Half 2024 results conference call. Very happy to have you all with us today. And the slides for this as ever are online on our website but also through the video portal. And as per usual, myself, and I'm joined by Alexis Koumoudos, our CIO. We will go through a number slide about 15 slides in the next 15 minutes. And then we're very happy to open up to Q&A.
And moving to Slide #2. I think the key events of the quarter, top 3 are probably most important here for you, the investor. From an NAV point of view, it's been a flattish performance year-to-date. In the quarter, we were off a couple of percent in USD and up a couple of percent in SEK given the weakness of the SEK, but up 14% from Q4 '22 levels.
I think the key message here that Alexis will go through in a bit more detail is underlying strength year-to-date in the portfolio that's driving the NAV, and we like that, but some headwinds in currencies which are exposed to in our local markets as well as some multiples from a valuation comps point of view. Feeding off that strength in the general portfolio, specifically, Creditas is always in focus, given it's our solid asset and nearly 50% of our NAV and recently reported its 1Q 2024 numbers itself and it announced its first profitable quarter and also as important it is starting to reaccelerate growth. So I'll double-click on that. But a key milestone for the company. Key milestone for VEF as a key shareholder in that company, and we do love to see growth with profitability coming through in some of our key portfolio companies once again.
And I see it more generally into the broad portfolio where it's just -- it's a portfolio that looks a lot better if we look at month-on-month, week-on-week, year-on-year. It's now the risk/reward is quite nice in what was at one point a high-growth burning portfolio as was the era and stage of the portfolio is now majority breakeven. 90% plus of the portfolio at breakeven and now starting to reaccelerate growth in some of the cyclical names like Creditas, Konfio, TransferGo and then some of the structural names a lot higher growth than that and mainly Juspay and Gringo point to. And but what we're expecting in the next 12 months from a revenue and gross profit point of view is 30% and 60% weighted growth in that portfolio. So quality, breakeven, growing and actually raising capital.
And the final 2 points, we as a reminder, on our bonds, we rolled over our sustainability bonds in Q4 of last year to push out the duration to Q4 2026. And in tandem with the last one we did, we released our allocation report earlier this quarter. Allocating that bond monies to similar names that we did the first time around.
And finally, just from a regional point of view, from an emerging market point of view, it's been an eventful quarter and in our world, albeit won't argue is an eventful quarter for macro and politics in the developed world as well, be it U.S., U.K. and France. But in our world, we had elections in India and Mexico is always an eventful period and one in focus for investors in markets like ours. And we're quite happy to see a continuation of government under Modi in India and also the Marina Party winning against the leftist government in Morena, albeit with a new President, a female President of Mexico for the first time, so some continuity there in both markets, albeit you get volatility around election time.
And then on the macro front in Brazil, a lot of focus around some of the fiscal constraints from a balance sheet point of view and the Central Banks targeting their moves on interest rates and the government opinions on them. But generally, it was a noisy window and we saw some FX volatility as you do and notably true the BRL and the MXN Mexican peso of 10% each quarter-on-quarter, albeit both have pulled back as is the way in volatility we've seen in these names.
And moving on to Slide 3. And just key highlight numbers. We have an NAV at the end of the quarter of $436.6 million. I would say it's off a couple of percent quarter-on-quarter, but broadly flat year-to-date. And from a SEK point of view on a per share basis, we're up 4.45%, sort of up from year-end 2023. And I guess the key point here from a share price versus NAV per share, which we'll touch on, is the share price has been growing year-to-date faster than the NAV per share but both directionally positive and hence that discount is starting to gradually close.
From an NAV dollar point of view, on Slide 4, the chart that we always show that shows the evolution of our NAV from a dollar perspective over time. We've kind of seen some consolidation since the down drag of the highs of 2021. I think the key message to you, the investors, we keep on reiterating that we're starting to see confidence through the prism of our portfolio of tailwinds coming through and our NAV and we can see that directionally over time, it is up to the right, albeit to gradually consolidate at some point in the cycle.
And last slide from my point of view before I pass to Alexis and just really around the markets, and we can't get away from public markets. We are big respecters of public markets because public markets are read across the private markets, be that valuation, exits, confidence in everything that we do. Year-to-date, you'll have seen in public markets, as indicated by the NASDAQ and the S&P up strong year-to-date and again in Q2 up 8% NASDAQ and 4% in S&P. And in our world, in the fintech world, it's been a flattish year-to-date evolution wise in terms of indexes and broadly speaking, multiples, albeit a lot of individual variances within that, which feed into our valuation process and Q2 was quite weak. A lot of interest rate sensitivity given the headlines that were coming through of 8-9% indexes in the quarter.
And at this point, I'm going to pass over to Alexis, who's going to double-click on the whole area of valuation, NAV and portfolio and where we are today before it comes back from myself. Alexis?
Thanks, Dave. Good afternoon, good morning, everybody. As Dave mentioned, just going to double-click a little bit on some of the points that Dave made. I think the first point here on Slide 6 shows the evolution of our valuation marks and the theme for the quarter is relatively flat and stable, but what's important are the components of that stability. And the underlying trend of like portfolio performance comes through on this slide when you consider some of the headwinds that we've been facing, i.e., weak effects in the quarter and weak public comps.
You can see that being the case for both Creditas, Konfio. So in those cases, we've had FX headwinds of circa 10% in the quarter and the performance of those portfolio companies offsetting that. In Juspay's case, there was a double-digit decline in public comps for the payment space, which was almost all offset by Juspay company performance, but not quite. And I think the only -- one other company is mentioned on this slide, which has a larger quarterly percentage decline is Nibo, which experienced both the FX headwinds and public comp headwinds. So the performance of the company and the growth in the company was not enough to offset both of those.
One other thing that we do, sometimes we get questions on is the other bucket. This comprise companies that are less than 1% of the portfolio or where the mark can't be disclosed due to regulatory restrictions. And in the quarter, the bucket saw an incremental decrease. This is generally because companies -- because we have become a bit more conservative on the forecast for these smaller companies, and in some cases, there were fresh rounds in which we did not participate in. And in one case, there was a down round versus a recent transaction that was Rupeek in India. So that's those accounted for the decline in the other bucket.
On the next slide, slide 7. There's been no change quarter-on-quarter to the valuation approach for the portfolio. We still have 13% of the portfolio marked to the latest transaction and 87% mark-to-market with over 90% of those mark-to-market valuations incorporating multiples further down the income statement as we detailed in the last quarter.
I think the important thing to mention here is the direction of travel for the marks over the course of the year will most likely be towards the latest transaction as we see more transactions happening in our portfolio companies, which then should help increase the confidence and validate our NAV and also create opportunities for realizations of VEF.
On Slide 8, this is our NAV bridge, which helps to quantify the drivers of the NAV over the quarter. As you can see, the NAV, the starting NAV for the first quarter was $448 million, moved to $437 million in round numbers. The biggest driver of that was portfolio performance which contributed about 10% in the quarter for the model holdings. That was quantified of $41 million. That was broadly offset by FX headwinds in the quarter, mainly reais and Mexican peso. Moving down 10% each in the quarter, which contributed to $32 million of negative NAV contribution.
And then you can see that there was a net negative contribution from comps as well, specifically because of the impact of payment comps and their impact on Juspay which was comfortably in double digits in the quarter on a percentage basis. I think on the smaller side of contributions to the NAV move in the quarter, it's worth mentioning that as you can see here in the latest transaction bucket, there was negative $2 million and part of that was because of the down round in Rupeek in India. And then you have some other cash changes and noncash changes in the corporate bucket. The cash changes being our OpEx and coupon payments and FX being the translation impact from our SEC bond.
On Slide 9. So sitting halfway through the year, we're feeling very confident, as Dave mentioned, in the portfolio and the outlook for delivery. And therefore, the opportunity for us to compound the NAV from here. I think the key thing to mention is whilst in the past we've mentioned that 90% of the portfolio or more have the ability to achieve breakeven. We have now hit that point where over 90% of the portfolio is breakeven and growing on a self-sustaining basis.
They include all 3 of the top names from Creditas, Konfio and Juspay, but extend beyond that to TransferGo, Solfacil and Nibo as well. So feeling very confident in the sustainable growth of our portfolio.
On top of that, we are now seeing companies turn a corner and starting to accelerate growth from the self-sustaining position. Dave mentioned we have -- we are forecasting a 30% weighted next 12-month revenue growth number for the portfolio and 60% on a gross profit basis. And that's in part driven by Creditas but contribute to from the rest of the portfolio. I think we're really moving past the phase of solving for breakeven for the portfolio and portfolio companies are now self fine-tuning the self-sustaining growth and reaccelerating.
And then the last point to make is that from a position of strength, i.e., well capitalized and having reached breakeven, we're now starting to see investors lean into the portfolio for fundraisers like has happened at both TransferGo and Gringo. So these events will help validate our NAV and create opportunities for realizations on the horizon.
Dave, back to you.
Thanks, Alexis. Look, moving from a portfolio level, which Alexis delved into our most important asset from a size perspective, that's Creditas. You will have seen in Q1 numbers coming out that they had their first profitable quarter, indicative of what's happening in the portfolio, and as important for future equity value growth potential they're now starting to reaccelerate growth.
And I think if you pull back with Creditas and you look back from our initial investment back in 2016, there's really been 3 distinct phases of the company, which is in Phase 3. But Phase 1 was growth to reach scale, and that was aggressive growth. That was a growth of the day that was funded by the venture capital ecosystem, allowing them to grow their franchise, their customer base, their portfolio and our market share to real size and scale and growing at 100% plus and burning as we all know, in that period.
Then you had the period of '22 and '23 in partly market force, partly general consolidation, but a real focus on getting to cash flow positive, breakeven and be in control of once forces and once [ devices ] going forward. They did that. They're now at that point. And now we're in the phase, let's call it, Phase 3 of profitable growth at scale and just be on the phone with Sergio Furio recently, it just feels to be very comfortable, confident place that the company is in at this point in the cycle.
You'll see from the data on Slide 10. Yes, the gross profit and the net income is very clear from this reported numbers from the company of where they've got themselves to in terms of cash flow positive. What we will see, and this is not forward-leading guidance ranking but this is just indicative of what we're seeing happening at the company. That the originations, the portfolio, the revenues will start to pick up now as we get into Q2, Q3 and beyond. It won't be back to that 100% growth of 2015 to 2019 or 2021, should I say. But this will be more reasonable, robust growth once again profitable growth at scale. And that sort of company that intends to IPO someday needs to be showing the market quarter-on-quarter for a year, maybe 2 before it leans in to do something special.
And from a share price point of view, the next couple of slides talk about that, our NAV per share premium discount. I think first and foremost, on Slide 11, the main thing for us is it's directionally positive. We always say at VEF to the team, to our board and our shareholders, it's gradual. In everything we do, it's focus, it's delivery, but we want things moving forward and gradually positive. And that's what's happening with our share price. That's what's happening to our discount to NAV. It is moving in the right direction, and we're using all the triggers we can to get there as soon as possible.
And I would say to shareholders when we're marketing and to ourselves as shareholders there's two very clear forces are at work here, which we're going to see a good return on share price or shareholder investment. And that is one, an increase in NAV of which a quality portfolio compounding is key. And the second is gradually or quickly reducing the NAV discount. And those two forces clearly give you the upside you've had year-to-date in the share price.
Slide 12, we've played just a bit to give a different perspective on how we're looking to close the discount to NAV, but a lot of the same kind of narrative is there. I think first and foremost, what we're seeing is discounts do persist in both VEF and the industry at large. But once again, we are seeing those discounts from a sector point of view, starting to come down. They're directionally positive. And also, there's a bit of quality differentiation from investors as well as investors are starting to hoard or move towards the more quality names with the better portfolios, and we would like to think that we are in that pack. That's one aspect of what's happening here.
And on a micro level, I think what's important for us to close the discount. First and foremost is the portfolio. If those companies reporting, delivering credit cost within it, which is the most public and of our private companies. It's us, as stewards of this capital and communicating our story well through Investor Relations and PR, and you will see a lot more and you have seen a lot more from us on that front. It's our company's rating capital, which once again compounds the NAV marks that we've put out there based on our own workings and valuation.
But I think finally, it's very clear to you and to us that exits are real. That's when a NAV market becomes very real, and that's when cash comes in. And that's something that we're looking to and confident we can deliver on in '24 and '25. And that's the goal for us and what we're saying to you, and we said that to our investors over the last few quarters. And that capital in besides reaffirming the NAV market that we have plus minus also gives us the capital that we need, want to strengthen our balance sheet. And that capital goes straight to areas like paying down our debt and/or buying back our equity because they are the 2 most obvious things we can do with any dollar coming in right now beyond getting back to investing and putting money to work in pipeline, which is very clear for long-term value creation, both for us and our shareholders.
And from a capital position, this is an extrapolation of last quarter's data, nothing that you wouldn't be able to see or work out from what we've shown. But we end the quarter with nearly $16 million of cash capital on balance sheet. And we will end year end '24 with $10.9 million. And we did roll over our bond, as I mentioned, to year-end '26. Our bonds are trading very well, and we look forward to our equity doing likewise. And at the end of the quarter, we're in a net cash negative $22.2 million position given the liquidity position and the bonds outstanding. And as a reminder, we did pay down SEK 100 million or $10 million of that SEK 500 million bond in Q4 of last year.
And as we're touching upon our sustainability bond because it is a key part of our cap structure. And the bond markets in Sweden have been very good to us and very supportive into our second iteration of that bond at better pricing. We put out our allocation report in the quarter. And once again, we alloted that money to companies which feeds within the sustainability bond framework, namely Konfio, Solfacil, Rupeek, and Mahaana sort of same, very similar allocations to the last bond.
Finally, just to wrap up, and then we'll get into questions from the floor. But from our side, I think what you're hearing in this presentation is that it's all about the portfolio. Investment companies like ours have a lot of aspects which help them succeed in life over time. But if you haven't got a quality portfolio under the hood you are in trouble, and we're the opposite of that. We're very confident in our portfolio. Top 7 names specifically stick out, they are 95% of our NAV. And as Alexis has double-clicked on around profitability, 90% plus quality growing. One thing is being profitable, we need growth. We're in growth markets. We're in growth sector and are starting to not just come through but ramp up in a lot of our names. And then capital is coming through to reaffirm that markets and give the companies in our portfolio more capital for more growth and then more expansion.
I think around NAV tailwinds, want to be careful, there's many aspects to NAV, be it the underlying portfolio company performance into FX into multiples and markets. But from what we can see, I won't say what we can control, but what we can see, we're very close to our companies and we're very confident on the NAV evolution through the prism of our company's performance, and that comes through, obviously, from a valuation perspective looking ahead.
And on balance sheet, traded discounts and this area is something that we think a lot and focus a lot on. It is a priority. It is the top priority to strengthen the balance sheet. And that comes into the area of exits and what we can say on the exit front is that we are working on a number of situations, general comments within the portfolio for partial exits as opposed to full exits. And we'd like to think that we can deliver within 2024 and '25, a number of exits, which will fit into strengthening balance sheet at the right price from the right situations. That goes in tandem with our share price and our share price evolution. I'd like to think they're connected. One happens, the other will happen also but we need to communicate well, we need to deliver on our portfolio of companies, we are doing that as well. So I like the direction of travel of the share price year-to-date. We just see more of the same or a lot more to go by year-end.
And then the big thing for us is getting back to investing because in short-term value creation for investors short to medium term, around the balance sheet strengthening, exits into the share price. And then in the medium to longer term which is really about finding the next Creditas, Gringos, Juspays, which we're starting to do again, and we're looking forward to getting those into our portfolio as we go.
Operator, I will stop there, and we will open the floor to questions, please.
[Operator Instructions] We are now going to proceed with our first question. The question has come from the line of Linus Sigurdson.
All right. Thank you. So starting off, I mean, looking at your expectation of 60% gross profit growth, it seems that it's down from 65% in the last quarter. Could you just elaborate a bit on what's driving that change?
Linus, thanks for the question. I won't take the big move from 65% to 60%, but we hear you. And Alexis, would you mind grabbing that one?
Yes. I would say, Linus, what we've been -- what's been driving some of the faster gross profit growth versus revenues is obviously margin expansion and these companies reaching or like approaching steady-state margins. And I think what you're seeing in that slight slowdown is as we roll forward 1 quarter the margin expansion isn't going to be happening at quicker rate. And so that's why you're seeing a slight -- I wouldn't say it's a reflection on the growth or the quality of the businesses. But it becomes incrementally harder to get that gross margin expansion quarter-on-quarter.
Right. Understood. And then I mean a bit of a broader question, if I may. If we look a bit further out beyond sort of any potential exits and so on. I mean I would assume you are already looking at a number of potential targets for new investments. It would be interesting to hear you talk about sort of what you're looking at in that area and where in the world?
Thanks, Linus. It's a very fair question. And let me talk generally and maybe Alexis feel free to layer in after specifically. But Look, we spent maybe 10 years in this industry Linus and building VEF into what it is today. Through the prism of our listed share, we have a team and a deep bench of experts who keep on scouring the emerging world for fintech assets of note that we want in our portfolio. And we've got some of the best capital providers supporting us to go get there and make sure that we all benefit from them. That worked very well in the first 7 years of what we were at in the last couple of years have been a consolidation phase, mainly from market forces reasons. And hence, we're talking about balance sheet strengthening and exits of some names within the portfolio, all of which -- many of which are still performing exceptionally well.
We never stop looking for the next Creditas, Tinkoffs, EasyGos, Juspays. That's what we're constantly doing. And what I'd say in the last couple of years, '22 and '23, they just haven't been there. Well, the companies have been there, but the opportunity to invest hasn't been there. It's been a theoretical buyers market, but it's been reality. There hasn't been a lot of deals done because companies haven't wanted to raise or go out there unless they have to. And what we're seeing in 2024, though, is an opening up of that.
From our side, on a general basis, the early-stage capital has kept on going through in local markets in Brazil, Mexico, India, many of the markets that we look at. And we're seeing a fresh iteration of growth-stage companies, Series B, C, that has always been our sweet spot. That's when we come into Konfio, into Creditas, into EasyGo. They're starting to come out, they're starting to bloom, and we're starting to see them again. So we're doing work on a range of companies in this area.
Also, what we've seen is companies that we liked on the way up in 2019 through to 2021 in a variety of countries and segments that were quality fintech companies quite clearly that will be scaled champions, but they were just priced to the hilt, and we looked away in that window. And what's happened is these companies have consolidated, they've delivered and now profitable and they're raising but they're raising it more realistic valuations in this new cycle.
So what I'd say generally speaking is it's starting to get to that investment window again, and it's kind of the window where we would like to lean in when we get ourselves in that place to do it. Now this doesn't become a 3-month window on its close. It can be a 3-year, 5-year window as we've seen before. But those opportunities are starting to show their head again and those excite us. That's a lot of what we're about. And Alexis, do you want to add on to that?
Yes. I just overlay a little bit from what Dave is saying, like these opportunities are starting to rear their head. I think where we're seeing them is predominantly like in our big core markets, the ones that we know really well where we have a good presence and a good reputation. So we're seeing a lot of these deals are still like coming across our desk.
And I think there were some like interesting themes as well in our portfolio where we've become deeper because of our portfolio involvement in those themes. And so we feel that we've become more expert at them. And yes, I think there continues to be great opportunities in our like in our wheelhouse, I'd say, to start to execute on as and when we bring more capital.
[Operator Instructions] We are now going to proceed with our next question. The question has come from the line of Ermin Keric.
So maybe if we start off, could you tell us or give us some indication about how large a percentage of your portfolio you expect to be out raising capital in H2 or the coming 12 months? Because I mean, it ties into both your statements about exit, I suppose, because this could be a good opportunity for you to piggyback but also on the confidence of NAV growing from here. I suppose, the easiest way to have that crystallize is if you have new rounds with fresh transaction values you could use on your NAV?
Yes. Hey Ermin, thanks for that. So what I'd say is markets are open. They are active. They're nowhere near, obviously, 2021 or 2020. But what we've seen in the market and then obviously through the prism of ourselves with Gringo and TransferGo is capital is being raised from good investors at decent valuations. So that's a healthy backdrop. Then you've got cross reference with a portfolio like ours, which is now cash flow positive 90%-plus and then there's a need and there's versus a want for capital. And all of our companies do not need capital, but a lot of them want capital because with incremental capital in a window like this, you can do more and be that more balance sheet growth. It can be acquisition of smaller names, which aren't going to make it and consolidation, et cetera.
So there is that want for capital from a number of our companies. And what I would say is active in the markets or slightly active in the market would be in the range of 3 to 6 companies in our portfolio. I am out there having discussions either people have come to them or they're going out to the market, having discussions. So no one is overtly out there raising and actually TransferGo wasn't out their overtly raising, but money did come to them.
So I would be disappointed by year-end if we didn't see at least two more transactions in our portfolio. I got to be careful what I said. It's always fluid, time line is always fluid and then you can define what a transaction is, whether it's internal capital or internal plus external and the size. But we're definitely in that zone where like the two that I've already mentioned, there will be more this year into next year, given everything we see right now.
And then you cross-reference that with the exit opportunity for us as investors. And there's many ways to define exit and most simple as an M&A or an IPO and a full exit of a company, all the IPOs are partial into full over time. But the other area is slicing or top slicing your position as a public market investor would. They owned a lot of Handelsbanken or I don't know on your listed PayPal company, and they want to take some money off the table, but they wanted to keep the position they just sell 10%.
The same thing happens in the private world where we are long quality assets, which we want to keep in the portfolio compound but into any secondary or into any prime replacement that these companies are doing, you get a price round, you get over demand, you get interest from extra investors who want in beyond the amount that the company is raising. That then does create opportunities for us as potential seller. So this is something we're very aware of. We're very much working on. And it does help that companies in our portfolio are or will raise capital this year and the next.
That's super helpful. Then I mean you've highlighted how Gringo and TransferGo did new rounds at or above the most recent marks you had for them, which I think has been quite helpful to kind of show that your NAV is holding up as opposed to repeat, could we get any more details on that one, how deviated to your most recent mark on it. And if there's any specifics why that was perhaps down road as compared to your most recent mark?
That's fair. We should always -- we should be balancing our approach in talking about those companies doing exceptionally well versus those taking on bit of pain and I think we've been balanced through cycle by talking about the Jumos and the Magnetis and the Guiabolsos as well as the Tinkoffs and the EasyGos. Alexis, would you mind taking that and sharing what you can?
Yes, sure. Yes. So there is some information I can share. The -- so Rupeek raised around earlier on this year, and they raised from a good, large investor. They raised a sizable amount. It was, I think, $6 million and then so we moved our mark in Rupeek to that latest transaction, and that happened like in the early part of this year. And then they were out looking to fund raise from some other VCs, some other VCs approached them with additional opportunity to take in more capital. This was a much more sizable amount of capital like $15 million.
But they gradually chipped away the price like as the negotiation for the round continued and Rupeek decided, the Board and the investors at Rupeek and management decided is in the best interest of the company to take the capital to say even if it meant a down round versus actually quite a recent latest transaction and so that's that kind of explains the evolution of the marks there. It wasn't that we'd moved it to mark model, and then we were completely warm on price. It was that there were 2 back-to-back transactions, and they were differently priced. And the company decided that it was in the best interest to take capital rather than not.
Okay. But that's very fair. Then last question for me would be, you touched a little bit about where you're seeing opportunities going forward for new investments. But could you maybe drill down on that even more? I think you mentioned like Uzbekistan opportunity. That's not a country I would have expected you to talk about perhaps. Is that just a pure one-off? And generally, how do you balance that kind of taking a one-off investment in the market versus I mean, you've talked about Indonesia several times. We know India, Brazil are more core markets for VEF. Just how to think about that? And perhaps if I could add to that one also if there's any specific segments or themes within fintech, you're particularly interested in currently?
Cool. I'll deal with Uzbekistan and the first point and Alexis be ready to get into the specific themes and areas. But and I was warned not use the word Uzbekistan because it turns out that it's the word that everybody is grabbed on to, in all the aspects of what we've reported so far. So I get a lot of questions on that.
Let's be clear, from a strategy point of view, we do EM, Emerging Markets or growth markets on fintech. Brazil and India remain the core of what we are in the portfolio and where we're focused into Mexico and Indonesia is still a big part of the work that we're doing internally, focused analyst and pipeline building. So those big 4 do not change.
And around that, what we've seen in the last 12 months to my -- I'd say my delight is as much as Russia has gone off menu, Turkey has come back on menu. And it's been a while, and we've had a great experience, good relationships and partners of being the Turkish market in the prism of EasyGo. And we've always tracked it from afar and now we're starting to see companies coming through and real capital being raised again as the market's appetite for Turkey and Turkey Fintech has improved.
And on a personal level, obviously, the former Soviet state is something that I have a history of focusing on and Tinkoff in Russia. Obviously, Kaspi is one of the benchmark fintech companies coming out of Kazakhstan, probably out there with NuBank as the 2 benchmark EM fintech companies that everybody wants to be associated with for all the right reasons. You have a lot of other countries within the former Soviet Union, including countries like Georgia, Kazakhstan [Technical Difficulty] and in these markets. And for a team and individual who is as connected in this world's region and has had experience and success we've always kept our finger on the pulse there.
So recently, we're down a bit of a Uzbek rabbit hole. It is the most populous country and in that part of the world. And we're looking at analogies of Kaspi and what they delivered in Kazakhstan. And we've seen 2 or 3 assets, let's call them coming out from an early stage in that market in different ways. So it's got our attention. It's getting work. We do a lots of work on lots of different things and it was ripe while I was writing the management letter, hence, it found its way in there at the same time. We're not going all in on Uzbekistan anytime soon. It was just to show that the breadth and depth of our knowledge and our reach in a lot what we did in looking at Nigeria, Egypt, Pakistan in the past.
More focused answer to that, Alexis, do you want to layer in?
Yes, sure. On themes and specifically what we're seeing. So as Dave mentioned, we continue to stay relatively focused on like -- on our core markets. And I think the opportunity varies quite a bit from market to market. But generally speaking, I would say we continue to really like the opportunity in our core markets for payments. And that is either looking at new pipeline opportunities there or actually helping portfolio companies succeed and expand into some of our markets for payments. So Juspay has spoken about international expansion. And more recently, we've really been leaning in and helping them to evaluate the opportunity in some of our other markets and then introduce them to partners and merchants there.
I'd also say like embedded finance continues to be a very big theme, a bit like the Solfacil and Gringo investments, we're seeing more and more opportunities like that, where there's great, great businesses that have the opportunity to capitalize on very large user bases with financial services, be it payments or credit. But on the face of it, it might not look like fintech businesses.
And then in some other markets, we're looking at like cross-border financing themes where you're seeing like measuring trends and -- and yes, I'd say those are like the big themes that we've been looking at.
We have no further questions at this time. I'll now hand back to you, David Nangle for closing remarks.
Super. Thank you. Look, thank you, everybody, for taking the time to be with us. Obviously, middle of summer, you've got better things to do. But I think the message is clear from our side. It's really about the quality of the portfolio and that's where the compounding short and medium-term value comes from. And then we need to balance that with strengthening the balance sheet, getting share price moving and looking at medium- to longer-term value creation that's in the prism of getting investing again and into pipeline, which we're very excited about.
Any questions as always, always feel free to come back to us direct, and we look forward to seeing you soon. Thank you.
This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.