Swedish VC Kinnevik hails "encouraging sign" of increased IPO and M&A activity

Swedish VC firm Kinnevik today hailed an “encouraging sign” of increasing IPO and M&A activity across sectors relevant to its portfolio, as its CEO reiterated its strategy of divesting underperforming assets. 

Reporting its Q2 financial figures, Samuel Sjöström, the CFO of the Swedish VC, which backs fintech Pleo and business travel management platform TravelPerk, highlighted encouraging IPO and M&A activity as a boon for its portfolio.

In particular, the CFO cited the recent IPOs and filing for IPOs of digital therapy firm Hinge Health, fintech Wealthfront and travel tech firm Navan. Speaking on a conference call, Sjöström said: "These are obviously valuable and important valuation references for companies like Spring Health, TravelPerk and Betterment.

"But perhaps more encouragingly, they are tangible signs of an increased public market appetite for more growth-oriented equity stories, like those of our businesses." 

Kinnevik has concentrated its focus on its five largest assets, which make up more than 50 per cent of its portfolio, under its CEO Georgi Ganev, who has been in role for seven years.

Asked about future portfolio divestments, Ganev today said: “Our core companies today they make up more than 50 per cent of the portfolio, despite us investing in companies outside that group of companies.

"We expect that ratio to actually increase further and one of the reasons for that could be divestments in the other side of the portfolio.

“The market for those exits has been more or less totally closed in the last couple of years, we think that will change in the coming years.

“So the concentration will continue to increase around these core companies, also because we are potentially divesting companies outside of that group.”

Kinnevik’s valuation of Pleo remained unchanged in the quarter, while TravelPerk was up eight per cent.

Kinnevik reported a second quarter profit of SEK 626m, compared to a SEK 2.3bn loss the previous year. The reversal was mainly down to a SEK 700m gain in the fair value of unlisted holdings.