Vef AB (publ)
STO:VEFAB
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Vef AB (publ)
Earnings Call Analysis
Q4-2023 Analysis
Vef AB (publ)
VEF has weathered the challenging economic conditions of previous years and has embarked on a recovery journey fueled by strategic refinements and a focus on value creation. During the fourth quarter of 2023, the company's net asset value (NAV) advanced positively, gaining 5% in dollar terms over the quarter and 16% for the entire year. This rebound is a welcome change after the market downturn experienced in 2022, and VEF attributes this uptick to a myriad of factors including market dynamics, currency fluctuations, and the performance of portfolio companies like Creditas, which alone represents about 40% of VEF's NAV. With efforts concentrated on achieving profitability and managing growth, the Creditas is expected to balance growth and profitability as it approaches an anticipated IPO in 2024.
India has emerged as a promising market, housing three of VEF's fifteen investments. The company's Board reaffirmed the country's potential during their visit, emphasizing the fintech sector's burgeoning prospects, which is evident in Juspay's impressive performance with significant transaction volumes indicating robust growth. Brazil remains a top geography for VEF alongside India, underscoring VEF's strategic foothold in two of the most dynamic emerging markets. Ensuring the future's clarity and continuing the venture investing cycle with a seasoned team, track record, and established relationships are core to VEF's forward-looking strategy.
VEF reported organic NAV growth of 16%, marking an achievement characterized by fundamental growth and reassessed valuations which resonated with the current economic environment. The portfolio displayed a 35% projected revenue growth for the next twelve months, with this estimate slightly reduced from the prior quarter, reflecting the larger share of mature companies within VEF's portfolio. VEF underscored the sustainable growth path its portfolio companies are on, with a significant majority either at breakeven or able to achieve it with existing capital. New initiatives for exits or secondary sales for at least six companies in the portfolio are underway, setting the stage for potential positive liquidity events.
Juspay's growth continues to astound VEF, with the payments company featuring north of $40 million in annualized revenue and record-breaking transaction volumes. While Juspay already has a strategic position within India, its long-term vision includes initiatives to expand globally, prioritizing opportunities to address similar payment challenges for its existing clientele. Recent news pointed to a partial spin-off of its Mobility business, which was clarified as an explorative project that has taken off remarkably and is being restructured to have a separate operational focus from Juspay's core payments solutions.
VEF has bid farewell to two portfolio companies, Magnetis and JUMO, which did not yield the desired outcomes. Magnetis faced scalability issues, and BTG subsequently acquired it after VEF's investment returned negligible proceeds. JUMO experienced volatility and struggled with unit economics, leading VEF to discontinue its capital support during a crucial fundraising round. These departures serve as critical lessons in risk assessment and foster a more cautious approach to early-stage investments and frontier markets.
With a keen eye on the emerging market fintech space, VEF reviews around 500 pipeline opportunities annually. The company notes an uptick in the quality of investment prospects and identifies a pronounced gap in growth capital, particularly in its core markets, while discussions with founders and market participants become increasingly pragmatic about valuations and unit economics. VEF remains excited about emerging investment themes, including embedded finance, infrastructure, Banking-as-a-Service, and cross-border financing, which signal a dynamic ecosystem conducive to finding the next big wins.
VEF has refined its balance sheet by completing a bond refinancing, reducing overall debt, and extending maturity dates, demonstrating sound risk management and strategic foresight. The company's immediate priority is to pare down debt while also addressing the NAV discount through diverse means, such as engaging in investor relations, increasing transparency, and maintaining solid investment performance. The company leaves open the possibility of directing proceeds from potential exits towards new investments if the right opportunities present themselves but remains steadfast in prioritizing balance sheet health and shareholder returns.
Closing the earnings call, VEF reiterates its commitment to navigating the venture landscape with prudence, focusing on growth driven by profitability, and strategic opportunity seizing. The company has a clear set of priorities, including balance sheet fortification and mitigating NAV discounts, as it moves with confidence into the next cycle. The leadership is cognizant of the intrinsic risks in venture investing but remains optimistic about the potential of its curated portfolio to create substantial shareholder value‎.
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Good day, and thank you for standing by. Welcome to the VEF Fourth Quarter 2023 Earnings Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.I would now like to hand the conference over to your speaker, David Nangle, CEO.
Thank you very much, operator, and welcome everybody to our Q4 year-end '23 results presentation after the results released earlier on today. And as always, I've got our CIO, Alexis Koumoudos, with me today on the call and we'll go back and forth and through the slides which are available on the webcast that we're going through as well as on our website. We'll spend about 20 minutes working our way through the slides in the usual format, giving you guys an update on what's been happening at VEF in the last quarter and indeed the last 12 months with some outlook guidance for 2024.But getting into the slides, on Slide 2, just the key events in the quarter. What's worth highlighting and what will we get into as we get into the deck. I think first and foremost, it's around the NAV and NAV moving in the right direction through Q4 and 2023. On average, we're up 5% on the quarter in dollar terms and 16% for the year. That's a directionally positive move quarter-on-quarter sequentially after the pullback that we and the market had in 2022. So it's nice to have those tailwinds back. And there's been a number of factors feeding into those micro level performance within the NAV, be it market, macro, currencies, and indeed, the company performances in our portfolio.Specifically, Creditas, which is approximately 40% of our NAV and are still our biggest holdings, I mean, our North Star. And very clear communication from Creditas and us for Creditas on their priorities in this window. It's been prioritizing a path towards profitability, moderating growth as it got there, and that's been coming through in the numbers as we see. But before 2021, it was about growth and burn as they build market share; '21 to '23, prioritizing profitability, with 2024 being a balanced growth profitability drive for Creditas as a business as it looks towards an IPO.And India is a market where we have 3 of our 15 holdings today and it's one which we obviously are on the ground every quarter, but we've brought our Board there in Q4 of 2023. So it was a fresh event just to look at that market to the prism of our Board. And it's also clear to them why it's one of the most promising emerging markets, not just for fintech, but I think for growth in general. And it's a top 2 geographies for VEF at this point in our cycle along with Brazil. And I'll get Alexis to focus on the Indian market for us within this presentation to double-click on that market why we like it so much with a focus on Juspay within that, which is about 15% of our NAV and a real rising star and the value creator for us as the company.And it's also worth talking about the future. A lot of the value clarity for VEF investors is in the portfolio today. And what you see -- but a lot of it is also in the team and the platform and relationships and the track record that we've built. And that we'll be able to take part in the next cycle, which is starting to evolve in venture investing. And so we'll double-click on that as well in the presentation as we get down to the positive moving parts and what we're doing to try to take advantage of them as we look forward.And then the final kind of key event in the quarter was our bond refinancing. We redeemed our existing bonds, issued new ones, pushed out the maturity, improved the terms of those bonds. Just real balance sheet and risk management is something that we're always looking to do as a company and to balance and manage the firm as a whole as well as the investments that we're looking to do.So moving on to Slide #3, just a couple of key numbers. We did end the year 2023 with an NAV of $442 million, slightly lower quarter-on-quarter from a SEK point of view, albeit up in dollars, had a SEK movement versus dollar with 9% positive swing for the SEK, and that obviously affected the difference in movements in the quarter. On a per share basis, people tend to look at the SEK from our NAV per share of about SEK 4.26, and that compares clearly to our share price trading under SEK 2 a share, albeit having a good day today off the back of our results.On Slide 4, we got the NAV evolution in dollar terms over time. It has been a gradual up into the right. And as we always say, had a spike in the middle, which is 2021 when valuations went massively up into the right before pulling back in 2022. We have stability in the NAV clearly on a dollar level since then and a gradual uplift through the year of 2023, as I said, 16% year-on-year, and we're looking for that to continue as we look forward.Getting into the markets, which are tailwinds for what we do or at least it have been in 2023. Strong performance from the fintech indices, 42% year-on-year and 27% quarter-on-quarter after the ARKF and the FINX. And also markets as a whole, be it the NASDAQ, S&P, were very supportive for what we did. Prices are up a lot, multiples went up as much as Alexis we'll get into. And obviously, a lot of it feeds through to our individual portfolio companies, albeit with specific comps and not market and [ fee-based ] valuation.And then final from me for now before I pass to Alexis to talk about valuations in our portfolio in the quarter a bit more, a number of our companies were up in volume in the quarter, notably the top 3 to a different extent based on the input parts from Creditas of 3% quarter-on-quarter to comp up a more comprehensive 19% quarter-on-quarter. And some pullback in transfer go once again with comps related, which Alexis will get into, with those moving parts offset into an NAV uplift in the quarter, which is the most important, I can get number to take away.Alexis, do you want to take the next few slides and just get into valuation approach details and what happened over the quarter, please?
Sure, Dave. Hi, everyone. That's a great segue for Slide 6 where I'll take you through some of the highlights of some of the most significant changes in NAV on a portfolio company basis in the quarter.So starting with Konfio, which increased 19% quarter-on-quarter, the market increased 19% quarter-on-quarter. About half of that was driven by the median comp base, which increased around 10% quarter-on-quarter. And then the rest came from rolling our forecast forward, i.e., growth in the company and FX strength in the quarter. Juspay is also one to highlight where we saw 11% growth quarter-on-quarter in our NAV mark. Again, a large part of this was the recovery in the median comps and the payment comp group that we used there and rolling those forecasts forward 1 quarter growth.I think the third name to highlight is Creditas. Creditas benefited, but to a smaller extent versus Konfio from a median comp recovery. There was also a slightly more muted forecasting growth as it runs a couple of quarters behind Konfio in growth recovery. And some of those net positive impacts were impacted by dilution from a convertible round, which crystallized in the fourth quarter and also some cash burn, which we'll mention a little bit in the NAV bridge later on in the presentation. Another notable increase, which is further down the ranks, but a significant quarter-on-quarter change is Solfacil where we saw very large growth in median comp multiples and they benefited from a very strong finish to the year. The last quarter was very strong. And therefore, the growth -- the underlying growth of Solfacil.To balance this, I'll just highlight a couple of the names that had a negative trajectory quarter-on-quarter, one of which is TransferGo, where the company continues to deliver very well. We just saw the median comp within the group retreat a bit in the fourth quarter. So it's essentially driven by one comp. And then on BlackBuck, a bit further down the order. There were some adjustments that have been made to the business and our business plan as the company formalizes its move towards an IPO, which is targeted for 2025. So we've made up some adjustments to our business plan, which has resulted to that, but we feel comfortable that it's growing from a new base of strength into a -- what can be a very positive event in 2025.Just on the next page. So this is a summary of where we stand in terms of the methodologies for valuation of our portfolio companies. Of the 14 portfolio companies, 10 are mark-to-market, representing 93% of our NAV and 4 are based on latest transactions, which represent 7% of our NAV. And you can see the bulk of those transactions, how recent they were and how significant they were. There's no real change in methodologies from quarter-to-quarter. I think the only thing to highlight here is our portfolio has shrunk by 2 portfolio companies, which fall into the other category. Those are Magnetis and JUMO, which have left the portfolio, and we'll cover that a little bit later on the call.On Page 8, we're presenting our regular disclosures here. So as Dave mentioned, over the course of 2023, our NAV saw 16% organic growth, which is driven by the underlying growth and the valuations of our portfolio companies. And the valuation of our portfolio companies reflect today's environment we feel with 93% mark-to-market and 7% on very recent significant transactions. The portfolio next 12-month revenue growth projection, which we show each quarter, is at 35% as we roll forward 1 quarter from the previous quarter. And it's come down a bit from the previous quarter.I think when we look into this, this really reflects that the more mature and large portfolio companies represent a larger portion of our NAV. But we also find this to be a very healthy growth rate considering the bulk of our portfolio is now growing from a profitable base. And then the last point on this slide is that 94% of our portfolio is now at or can reach breakeven with existing capital and the remaining 6% have 21 months of runway. So we feel very comfortable with the runway and the sustainability of our portfolio without the need for further capital.Page 9, this is the usual bridge that we show, which helps to explain the contributors and the attribution of growth of our NAV quarter-on-quarter. As you can see in this, the bulk of the NAV growth over the quarter is driven by changes in comp multiples within the market valuation methodology. That was complemented in the quarter by FX tailwinds, specifically from the real and the Mexican peso as well as underlying portfolio growth of our portfolio companies.The largest headwind in the quarter falls into the other category. And this relates to net dilution in portfolio companies. In particular, the biggest contributor to this is the effect of the convertible note on our Creditas stake and the fact that the convertible note portion of our holding did not increase to the same extent over the quarter. And then also changes in our cash position of portfolio companies. We are at a point in the portfolio now where companies are growing from a profitable base. And so the impact of that is becoming smaller and smaller as we look forward.Other impacts to highlight here I think are the corporate cash, which reflects our OpEx, coupon payments and costs related to the bond refinancing in the quarter and then also FX. The FX category is related to the translation impact of our SEK bond and the fact that the SEK appreciated over the quarter. But I'd like to leave you with the overall message that this is a positive trend, which we feel will continue as we look forward, driven by the rebased portfolio of business plans and the fact that a large portion of our portfolio will now be growing from a profitable base in 2024. And as we keep a close eye on costs, the combination of these factors will continue to drive our shareholder value and NAV per share.So Dave, back to you.
Yes. Thanks, Alexis. So let me say a couple of words on Creditas since our biggest holding before I pass it back to Alexis to talk about India and Juspay within that. So you're getting a feel for 2 of the top 3 holdings. So as always, Creditas do provide data for you, the investor base, at a headline level. And I guess, it's really been a good narrative and good transparency as they have communicated what they want to do this year and pretty much delivered upon it.And what that means if you see the portfolio, broadly static slightly year-on-year. In 2023, they reduced growth and moderated growth. And the idea was to squeeze up revenues or drive revenues through higher margins. Now we're starting to see the rates come down in Brazil. It's going to help cost of funds. The gross profit margin itself will come from a low of 12% to north of 30% and rising. And the cost base was more efficient and CAC is lower. So you're getting to a place where there's just a tipping point on cash flow positive or breakeven. And that's where they wanted to be and that's been the communication with the market.So as I said, from Creditas investor point of view, we've been with the company a number of years, it's been the rampant growth phase up to 2021, obviously, [Indiscernible] mark and have the capital to do it. But that was when they've built their size, their scale, their team, their franchise, their brand and their market share and that came with [Indiscernible] and those were a lot of start-up companies. The last couple of years has been about getting income statement cash flow positive, also strengthening the balance sheet. As we reported in the reports in Q4 that those $75 million convertible notes that was internally supported across the Board as well as in the first international bonds. So a lot more capital has gone into the balance sheet, while the income statement looks a hell a lot healthier as I look into 2024.And then I think if you look at this slide, I pointed to a lot, but everyone talks about inflation and rates globally and then have we peaked and it seems we have peaked and it will start to come down to what extent and when. Brazil is already happening. And they've got 4 rate cuts already at the back end of last year with more expected to come this year. So we're down from a peak of 13.75% to 11.75% today. That's the base selling rate in Brazil, looking at 9% consensus for year-end.Why is that important? Because Brazil is a very cyclical country and Creditas simply [ credit play ] as the Solfacil [Indiscernible] all plays on the credit cycle in Brazil and we're moving back into a fresh credit cycle, which means to grow we'll have to be better margins which means better asset quality. We've lived through the opposite over the last 2 years. We're looking forward to enjoying the benefits of that trend as we look forward. So the key message on Creditas is profitable growth in 2024 with the eye on an IPO of 2025, and circular being in local press with that narrative of late.Alexis, could you talk us through India, just a top level as well as getting down to Juspay and what we like there off the back of our recent trip?
Absolutely. So as Dave mentioned a bit earlier in the call, in November this year, we -- November last year, we restarted our tradition of holding one of our Board meetings in geography every year. And as India has become more and more important to the west story, we decided to host that in Bangalore. I think everybody came. It was great to have a whole team there and the Board there. And I think everybody came away feeling very, very positive about the opportunity in India. And that we've gone from like pre-2018, really observing and learning from India and finding it a complex and competitive market to really getting involved and now making investments and having a lot more to do there.So what we wanted to do was just relay that a little bit to investors in some of these slides. I think some of the highlights of why we love the opportunity in India is clearly it's now the most populous country in the world with over 600 smartphone users. The combination of cheap data and the government drive have led to India becoming the #1 economy for digital transactions. And government-sponsored innovations like Aadhaar, UPI and token have really resulted in probably the most advanced public infrastructure on which fintech is being built.The regulators have also played an important role in cultivating innovation with a progressive mindset. And the deep pools of dedicated and international capital, which are focused on India, are really driving investments, innovation and cultivating an environment for exits. So what we found, the combination of all of these factors is that it's resulted in one of the deepest fintech ecosystems in emerging markets with over $30 billion of private fintech financing since 2014. And we're now beginning to see a cohort of really successful IPOs. So coming away feeling really positive about the opportunity here for fintech.Dave, on the next slide, just highlighting some of the investments that we've made into this opportunity. Over the course of 2020 to 2022, we made 3 investments in different fintech verticals that excited us most. I think the most important one for our story so far has been payments and Juspay. It's a scale opportunity with huge tailwinds from digital adoption and government support. And the complexity of payments and friction for merchants is a very real problem. The fact that there are slim unit economics and the fact that it's a complex space, the plan creates deep moats for leaders like Juspay.On the secured lending side, we invested in Rupeek, which is a gold-backed lender. And India has got one of the largest credit cards to sold globally. There's a huge portion of new-to-credit and fin for our clients. And there's $1.5 trillion of unproductive gold accessed in Indian households. So this represents a big opportunity for Rupeek to help create productive loans from the unproductive assets at fair prices to a large chunk of India, which is new-to-credit. And then in the embedded fintech space, we made investment in BlackBuck, which is effectively digitizing payments for the operations for 1.5 million truckers that own 3.5 million trucks, which are essentially the backbone of production for India.So across these 3 investments, we've made -- we've invested $45 million in 3 years, which today represent $89 million of VEF's NAV as at the end of the fourth quarter. And we've built deep relationships and reputations locally to continue succeeding and growing something in India that we're all excited about and we feel could be as big as what we've done in Brazil today.And then on the next slide, I just wanted to touch on Juspay and convey some of the excitement that I think the whole team got from spending time in Juspay's offices and our Board being able to interact with the broader team on the ground in their offices. The scale of what Juspay have achieved I think continues to amaze all of us and just the scale of the opportunity in India. I was actually on a Juspay's Board call today and they're comfortably north of $100 billion of annualized TPV. They are growing at a very, very healthy clip. They had some days in December where they did over 100 million transactions in a day. There are 1.5 billion downloads on -- of Juspay's SDK and apps in India. And clients really do love them.They are deeply, deeply integrated with their clients with very, very low churn. They're solving very complex payment problems for merchants, banks and big tech, including GooglePay. And I think there's a lot of upside to where Juspay can go. They're just scratching the surface. But what we're seeing with Juspay as well and India has laid this trail into digital transactions and payments and some of the rest of the world is starting to go in a similar direction. And Juspay's clients are asking Juspay to help them solve similar challenges in some of their other markets. So we're seeing Juspay move to some international markets with their existing clients with the launch of their product, Hyperswitch. So we're super excited about Juspay.
Cool. Look, really worth digging into Alexis and sharing with our investors because of just the importance of this asset for us, not just today, but given where it's going tomorrow also. But as you know, a bit like when we talk about our NAV evolution, it's good to give a fair reflection of everything going on and we don't get everything right at that. And as we've seen in the past, for every investments that we made like Tinkoff or iyzico that [ go up to the stars ] and we like to shout about because that's the nature of the beast. And we've got names like [Indiscernible] also where we've invested and the investments have effectively failed. The 2 investment companies or 2 portfolio companies that lead in this portfolio in Q4 and basically investments that haven't worked out for us and for our shareholders.And Alexis, what do you think is true, briefly Magnetis and on the JUMO ramp up, but then just maybe what happened to Magnetis and learnings that you can take away from that?
Absolutely, yes. It's something that we reflect on when we have companies like this that don't deliver the outcome that necessarily wanted. But essentially, Magnetis was a robo-advisor that was dependent on very large scale with very slim unit economics. And I think one of the biggest challenges for them was that they struggled to find the scalable channels for distribution. It wasn't helped by the right rate cycle, which produced headwinds to distributing the kinds of products that they were distributing.And then when private funding became a bit tight and combined with Magnetis being sub-scale, the cuts that were necessary to make the company self-sustaining were too deep essentially, at which point M&A was in its destiny. And in October 2023, BTG acquired Magnetis. Over the course of our history with Magnetis, VEF invested $6.7 million predominantly across 2017 to 2019. And the proceeds from the sale were negligible because we didn't participate as much in most recent funding rounds.I think as we reflect on this and the important takeaways, I think what we feel as a team is the importance of appropriately sizing for risk and reward investments in the early stage before that the scalable channels were found. And I think establishing a framework for identifying and measuring product market fit in our investment process, which we have discussed at length with the investment team. But I think one of the positives as well is we've spent 6 years on the Board of the company trying to grow in this space. And we've learned a lot of these lessons about this particular vertical, fintech, and it helps as we evaluate other businesses in this space.
Thanks. And I think this reminds us [Indiscernible] in the same category, give or take, an investment that we brought down in Q4. Effectively, it's a company that we've been [ mixed ] since very early days in Africa. And they did actually manage to deliver scale through the journey that we'll be with them. But when they struggle to do it, not enough for efficient unit economics to deliver bottom line positive. A lot of volatility in the markets they play in, notably Africa. And they got to a point where they were raising fresh capital in an aggressive manner pay-to-play reset at the cap table. And we have the decision to make one of the best use of our capital at this point in time. And we decided not to pay and we have better uses of our capital as we underwrote the investment opportunities at both JUMO.And I think the key learnings from this was really around frontier markets being difficult in the short to medium-term. We need to rightsize investments, very much like what Alexis said, the Magnetis and I think we've done that in other frontier markets. And then partners which have been key to JUMO's success in scaling can also be difficult through cycle and also be difficult on the economic front where they can eat a lot of your lunch as you go. And JUMO has given us a very much a growing concern. We wish them well. And we did raise the capital that they need, just not our capital, and we're no longer part of that story.And I think in both cases, one important takeaway for us is and for the market is around our NAV marks. You'll see in both cases, we were marketing down well in advance of the situation that happened in Q4 where we moved them out of the portfolio. So that is a negligible impact from an NAV or from an economic point of view as much as it is a negative for VEF to make mistakes like this on the investment front.And a few more slides. I know we're running over a little bit, but I think there's some good content that we're sharing here, so we'll stick with it. I think Slide 16, Alexis, just I would start to look forward as this cycle starts to turn, interest rates start to move, markets start to open up on how we think about this news like? And maybe you could share some thoughts there?
Yes. As Dave mentioned earlier in the presentation, I think we're getting very excited about the opportunity that lies ahead of us. And just to update our investors and bring them along on the journey, as a team, we look at around 500 pipeline opportunities in emerging market fintech a year. And we're seeing a real improvement in the quality of the pipeline over the last 3 months.As highlighted on this page, there's a pronounced vacuum of growth capital for fintech. And when you spend time like we do in our markets, you see that this is even more exaggerated in our core markets and how pronounced this is. But generally, I would say, we're definitely having healthier conversations with founders on the balance of growth at attractive unit economics and then also around valuations. And it's not just valuations with companies and founders, but also with other market participants show that's reflected in all of our NAV being down from the peaks of the market, but it feels like a far more sustainable investment environment with plenty of opportunities coming through.And I think just to flag some of the emerging themes that we're getting really excited about, as you've seen, we've got embedded finance on the brain and in our portfolio and we've written some reports recently about the opportunity in embedded finance around that. And I think complementing that, we really like some of the infrastructure and Banking-as-a-Service opportunities. And in some of our markets, we've seen huge opportunities and some growth opportunities in cross-border finances -- financing, which we're getting really excited about.And I think what's really important and drives a lot of our investment activity and excitement is the fact that we haven't stopped our travel, which is a core part of what we do. Over the course of 2023, we spent a lot of time in all of our core markets, which is really important as we interact with entrepreneurs face-to-face, we spend time with our local partners and investors and really contribute to the ecosystem so that we're top of mind for being attractive partners for financing. But all in all, it feels like we're coming out of the other side of what's been a challenging time for venture-backed businesses. And we're only getting started. I think the opportunity that lies ahead of us is huge as we continue investing in one of the strongest secular trends across some of the world's fastest-growing markets.
Super. Let me wrap up with these last 3 slides and then we'll open up for questions. I think first and foremost, just the snapshot evolution of our share price versus the NAV per share, I don't see that lingering discount. If they're -- we're very aware that we're willing to close that this year through many different means at our disposal.And I guess, that leads on to Slide 18. And I guess, the message to shareholders consistently is we care. We care a lot. We are shareholders. And we know the various levers one can pull to help reduce that discount to NAV over time, breaking short-term in nature just to get that this kind of close, but they're also medium and long-term positive fundamentally for the business that we run. And they mainly make around areas like Investor Relations and PR, we did a lot more of that, we're reaching out to our investors, we're working with investment banks. We expect to have more coverage from investment banks in the not too distant future, it will be a positive and overlay for what we are.And increased transparency is always key, getting our companies out there in front of investors, there are probably going to be more sessions with our companies with investors this year, potential investors. And there are companies like Creditas and Konfio, for example, will be at the Goldman Sachs FinTech Conference and LatAm in New York at the end of February. It's a great platform for investors to meet our companies first-hand and get the transparency that we have into the founders of these companies.And then you can't beat investment performance, I think 2023 performance from an NAV point view is directionally positive 16%. So you can extrapolate historic performance, but the trend is clearly positive. You look at the forecast next 12 months revenue growth performance that we're expecting in the portfolio, that should feed through. And then the company is raising the money with Gringo averaging capital in Q3 of 2023 above the last round valuation. I expect other companies in our portfolio in the first quarter, the first half of this year to raise capital at or above last round valuations, R&D that are not marked. And these are important metrics and marks to just help in the narrative and get story back on track and closer to its fundamental fair value and give or take at NAV.From a capital position, which is a very important aspect of our story right now and all stories like ours, we ended the quarter and ended the year with $21.6 million at that point. What's key to note is obviously is that both the costs and the interest costs which obviously bring down quarter-on-quarter, I think it was $35 million at the end of Q3. We're making this to our bonds and where the movement in our cash position wins. In Q4, we issued a new bond, a new sustainability bond. We redeemed our old bonds. The metrics of that is that we issued a SEK 500 million bond, but we took ourselves $100 million of that bond. So effectively reducing our debt from SEK 500 million or approximately $50 million to $40 million or SEK 400 million, and that was a deliberate move from our side.We increased the maturity to 2026, December '26, now it's good risk management as we have the maturity of the bonds in April 2025, reduced the amount of directionally positive on the debt outstanding, while improving the metrics further on. And I think what I'd say to the market on this front, we've always looked to stay ahead and from a balance sheet risk management point of view, stay logical and always talking to our Board and our shareholders as we move along the way. And we're very happy we issued our first sustainable bond back in 2022 at the start of the volatile period of '22 and '23. It put us in a very strong balance sheet position going into this cycle. And we're able to support the businesses in our portfolio through that with strength and also have a strong balance sheet.It was the right thing to do in Q4 of last year in the window that came about to redeem. And we issue our bonds, maturity rates, reducing the amount of positive movements. And so I think we're seeing some markets directionally positive as we got a goal to pay down this debt over the next 12 to 18 months. And how does that get paid down, it clearly gets paid down in cash in. And what we have on our side is a portfolio of assets. And what we can communicate [Indiscernible] but what we can communicate to the market is we've got initiatives on at least 6 companies in the portfolio. That's a broad range of initiatives looking to deliver exits and for us and cash in ranging from a full exit of a company write-down to a partial secondary sale.So we've confidence we'd invest, that we can deliver the cash and that we need to take care of our bond through the prism of our portfolio in the next 12 months, and that's the key goal for us. And so our confidence feedback from market level confidence as we come into this year and we see [Indiscernible] fintech listing in NASDAQ, $18 billion market cap company raising $900 million in the process of secondary shares. Where the confidence comes from the IPO markets reopening made by [ Klarna ] [Indiscernible] on the front foot there.At BC level, what funds being raised and secondary funds being raised and conversations are ongoing. And then at that level, most specifically and most importantly, we're very close to our portfolio companies. We're on the Board of these companies. And we don't believe and hope that it would work. We work with these companies through to exit and we can help influence the exits of our sales within that. But the process is ongoing. We will share more when we have more, when we want more and we'll get to the specific when the time is right because the ideology and goals that we have. For this year, and I think what you're seeing with our debt levels and what we're doing with our debt, it's directionally positive and we're staying one step ahead.And then finally, just to I guess review the investment case and outlook as we sit here today and look into 2024, it does come back to NAV. NAV is back to actually positive. I think most important for me, a lot of tailwinds last year were market-based and we welcomed them. And what I'm trying to see in the portfolio is a turn in companies not just that we've got that 35% expected growth for next 12 months revenue, but we're going directionally positive in our internal forecast, names like TransferGo, Konfio, Solfacil to name the 3. We've definitely been revising op numbers in a traditional analysis. And I suppose to the way around moving into the 2022, '23 cycle.We're very optimistic about our portfolio. When something doesn't work, we write it down. It moves out when something is working, it's right size, it's right value. And we're seeing Creditas and Konfio coming out of nice cycles now in both of those markets for credit. Juspay's classic structural growth and a number of other companies which have us very excited. Emerging markets is a big arena, but we are very exposed to Brazil and slightly returning India's structural growth and Mexico near-shoring the portfolio itself. There's a mix, much better maturity and risk reward in there from growth and breakeven cash flow positive versus just a burning portfolio of rampant growth, which was the way back in 2015 to 2020.The venture industry is fine and showing signs of recovery both money in and money out and everything in between, and that's just helpful tailwind for us and we do it best. And our priorities are very clear, it's around strengthening our balance sheet, we're closing that discount to NAV. And so getting back on the front foot in a cycle where we think we can make a lot of money for our investors.So we did overshoot there from the total, but let's stop there, operator, and let's open up to questions from the audience, please.
[Operator Instructions] We are now going to proceed with our first question. And the question is coming from the line of Ermin Keric.
Maybe just first, I think you mentioned that you had initiatives for 6 portfolio companies on exits. Could you just tell us a little bit more about what does initiatives means? Is that -- you're actually trying to do something or is that the inbound interest like bids, et cetera, on 6 companies?
Yes. Ermin, that's a very fair question. If you give a bit, people want more and that's the natural way of the markets. But what I'd say is, it's a mix. I think first and foremost, we work with and through our companies. So we're investors in them. We know the founders very well. We're on the Boards. We're not trying to do something around the side. So we're working I think we can think for the most part working with and through companies into events that they're looking at doing or may happen to them from an M&A or a capital raise point of view. So now there can be a capital raise. We're at the primary way to second retail on top of that. And that's something that we could lean into.Others where companies have M&A conversations going on because somebody is leaned in and we're part of the strategic debate there around whether it's the right price for this company at this stage or whether it's something that we want to do. Not yet are we thinking of doing something on our own away from the company. We probably wouldn't. We'd look for blessing and work with companies through to clean transactions on our side. So there's been -- there's nothing desperate in what we're doing. We're just working. I guess, the focus is more on cash in as opposed to supporting our companies with cash into them in this window. And we're very much working with them on that basis.
And just in terms of priorities, you mentioned paying down debt. Do you completely rule out to new investments when you get to cash in from potential exits?
I would not like to rule out anything. I'd just like to be logical as we go. And I think the order of priority is pay down your debt or some of your debt making a much lower amount. It's a comfortable amount, but it can be lower and lower is better than higher. Then you look at where you trade versus NAV and it's a tough hurdle to get over, to not buy back your shares before you actually put a dollar to work in a new investment, that's just math. But at the same time, the good thing about our shareholders and the conversations ongoing is that they want us to keep on finding the next Tinkoffs or iyzicos or Creditas. And if we do, we should be very clear to them that we have found that and we want to invest in it. And if that means putting that capital to work ahead of putting it down to a debt or buying back because the opportunity is still great, then so be it. But it's not the natural first order of things.
Okay. That makes a lot of sense. And then just one last question on Juspay. Can we talk a little bit more about the more long-term plan for the company? Is this more of a Pan Asian player or how should we think there? Because India seems quite unique. And as you alluded to, it's quite of a huge market as well.
Alexis?
Yes. Thanks for the question, Ermin. So yes, I think Juspay's vision is certainly to continue maintaining their position in India, but they have a very large and strategic position there. So we are focused on defending that. But outside of that, I think the team has ambitions to try and solve some of the similar problems globally. And I think in terms of prioritizing where they go globally, it's more -- they're doing it more on the basis where they are solving problems for existing clients in their geographies.So some of it does end up happening in like Southeast Asia, some of that happens in the Americas as well. So they're kind of being led by their clients into big opportunities. But we are finding -- with the first few iterations of this, we're finding that their software and the solutions that they've already built just for India are crossing borders pretty well and more well than we expected. So I think they are very excited about global expansion. And probably, it's not a bigger priority than India, but yes, I think they're very -- they're equally as excited about global expansion as India.
[Operator Instructions] We are now going to proceed with our next question, and that question is coming from the line of [Indiscernible].
Starting out with the question about the growth outlook. So 35% down from 40%, is there anything besides moderating growth in Creditas driving this or is there anything you can say about this figure sort of ex-Creditas, if you will?
Alexis, do you want to grab that?
Yes. I'd say, there are -- I think the biggest driver of this number actually is the fact that our more mature portfolio companies, which are the larger portfolio companies are a larger portion of our NAV this quarter. So I think that's the biggest driver here. I would say that actually names like Creditas and some of our other names are starting -- we're starting to see like some potential re-acceleration in growth. So I think that the biggest driver here is actually just the weighting to the more mature portfolio of companies because it's a NAV-weighted number.
Great. And then second and lastly I'd like to ask about the 2 exits or write-offs that you made in the quarter. You've obviously reflected on sort of the learnings that you've made. But do you see any sort of similar risks anywhere else in your portfolio as of right now?
So we're -- [Indiscernible] look, we're in the venture investing game which comes with some risks. And we've lived with these companies through the last few years, not to mention the last couple of years which has been difficult in certain instances. What I'd say within the portfolio of 15 companies that we have let, will we end up with another example like a Magnetis or a JUMO and the odds are probably yes, just because of the low numbers. And if that were to happen, what you would see from an NAV point of view, they wouldn't be sitting up there in the Creditas comp or Juspay position, which are obviously game changers and the ones that are driving value. They will be down the opposite end because they will be marked accordingly because there will be risks within the business that I mean at that stage and point.So I think it's a general answer, not to avoid it. We keep losing, we hate getting things wrong. And we know over time, the big winners have outnumbered in terms of value creation, the ones that we've got wrong, but each individual one that we do get wrong is a hit and we take the learning away and trying to repeat or at least not make those mistakes again. But I think low numbers says there will be another failure in our portfolio inevitably as we go ahead.
We are now going to take our next question, and the question is coming from the line of Rajiv Malhotra.
So wonderful results. I'm one of your -- maybe one of your few investors calling in from India. So this is regarding Juspay. So the recent writings in the financial newspapers here talk of Juspay as somebody or a company which has missed lots of earnings by sort of making the original UPI almost for no money. And recently, they have tried to spin-off their Mobility business. So are you guys onboard with that?
This is Dave, Rajiv. It's great to have Indian investors and it's great for you to dial in. Alexis -- sorry, just on Indian press, look, we do read a lot of Indian press because the story do come our way. And we do get many stories around our companies which have a broad range of details in them. But Alexis, specifically to Rajiv's comments, can you share what you can share?
Yes, absolutely. Rajiv, thanks very much for taking the interest and for being a shareholder. I think I know what you're referring to. I think it was in the can or something [Indiscernible] I read the same article. I do find some of the Indian press to -- they do -- a lot of it's not factually correct. So over the period, we've been shareholders in Juspay. They have gone from like $5 million of annualized revenue to north of $40 million now. So the trajectory of revenues is very, very strong. The unit economics are very strong. They have what you would expect for like soft -- very, very high quality software apps company gross margins.I think the can is like, correct me if I'm wrong, but I think the way that they're spinning this article is that [Indiscernible] the mobility app that they helped create the government, which was a very, very small project for them that was created by 4 people was a pivot of some sort, but the reality is that it was a project that they did on the side to -- as they explored payments within mobility and it just caught on like wildfire. And we as a Board, sat down and discussed and said, is this core to Juspay in payments? It's venturing more into like another field and it makes a lot of sense for us to segregate this Juspay to continue to be a shareholder in the entity. But to have a separate team and a separate funding to fund a business that is not caught to Juspay anymore. So I would say what's in the press is probably not that accurate and it was far from a pivot. It's just something that's really just worked like wildfire.
Okay, great. So if the Board is with what's happening, happy to be there. It's been nice being an investor with you guys.
We have no further questions at this time. I will now hand back to you for closing remarks.
Super. Thank you, operator. And thank you everybody for dialing in today and for staying with us in our longest call so far. I think we got through a lot and that was value-added for you, the investor. So yes, thank you for your support. Thank you for listening. And we are available to answer any questions that you have on an ongoing basis, feel free to reach out direct to ourselves or to Cathal Carroll who runs our Investor Relations. But for now, thank you. I wish you a good rest of the day, and we'll talk again soon.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.