Becoming a fully-fledged growth investor
Since 1936, Kinnevik has been an investment firm of constant evolution in our DNA. From our early days in forestry to our expansion into telecommunications and commercial television 40 years ago, to e-commerce 15 years ago and through today's investments in growth-stage companies across Europe and in the US, our focus has always been on what's next.
In 2018, we embarked on our latest transformation into a fully-fledged growth investor, divesting and distributing companies such as MTG (2018), Millicom (2019), Zalando (2021) and Tele2 (2024). All the while, we have built the Kinnevik of today with a focus on three high-impact sectors that we know well and in which we have a unique capability to create returns for our shareholders: Health & Bio, Software and Climate Tech.
At our recent Capital Markets Day, Georgi and I presented where Kinnevik stands today and what we are looking to achieve by 2030. Below is a summary of what we sought to convey.
Reshaping the Portfolio: A Targeted Approach
Where we stand today, our portfolio can be split in a handful of categories: our five core companies, large and high potential new ventures, more mature and profitable albeit non-core companies, and a group of less proven companies.
The five core key assets represent more than half of our portfolio value and their performance is the main driver of our near-term success. They consist of spend management software Pleo, travel management leader TravelPerk, hotel efficiency innovator Mews, care provider Cityblock and personalized mental health platform Spring Health.
Many of this group have attracted new capital from investors in a challenging market environment. Spring Health, for instance, recently raised a USD 100m Series E round led by Generation Investment Management at a USD 3.3bn valuation; TravelPerk raised USD 104m in January 2024, lifting its valuation to USD 1.4bn and Mews raised USD 110m earlier this year, reaching a USD 1.2bn valuation.
These companies have all benefitted from our unique strengths as a growth investor. We have supported our companies through the good times and the bad, accumulating large ownership stakes over time through continued follow-on investment, typically positioning us as the largest shareholder after the founders. In the respective journeys of these core assets, our team have been active board-represented owners, building enduring and trusted relationships with the founders. For instance, Andreas Bernstrom, Operating Partner at Kinnevik, has been the Chairman of Pleo for nearly 7 years and has been integral in supporting Pleo's founder and CEO Jeppe Rindom through an as exciting as difficult journey over the last 2-3 years.
Our high potential, selected ventures
After our group of five core assets, we have six high potential ‘selected ventures’—these are breakthrough companies with the potential for explosive growth. These are heat pump provider Aira, fossil-free chemical producer Solugen, biology and chemistry mapper Recursion, green steel producer Stegra, regenerative agriculture platform Agreena, and drug discovery platform Enveda.
These companies make up 15% of the portfolio and are experiencing solid progress, albeit in less linear and obvious ways as they are earlier on in their development. Recent highlights among the 'selected' ventures include Aira’s EUR 63m extension round, Recursion's FDA approval to begin phase 1 trials of an AI-discovered cancer treatment; Solugen's feature in the 2024 CNBC Disruptor 50 list of companies riding the AI wave; and Enveda announcing its recent USD 130m investment round co-led by us at Kinnevik and FPV Ventures. We will continue to support these companies based on them achieivng certain growth milestones.
The rest of our growth portfolio
At our Capital Markets Day, we split the remaining companies in the portfolio into two: more mature, profitable companies that are performing well but carry too little weight in our portfolio to form part of its core, and a small group of companies with potential to become more meaningful companies over time (e.g. Transcarent, Pelago or Charm Industrial). In growth investing, it is right (and normal) for there to be investments which don't work out - but we have learned from our mistakes and will do a better job at minimizing the impact of these unavoidable events going forward.
Strategic Investment Focus
In creating the Kinnevik of today, we have ventured deep into a number of different sectors. In this industry, you learn all the time, and as part of completing our transformation we have streamlined our investment focus into three main sectors: Health & Bio, Software, and Climate Tech. Since 2023, over 80% of our investments have been in these respective sectors.
We have formed teams and expertise dedicated to these three sectors.
- Health & Bio (Christian Scherrer, Maria Maras, Ala Alenazi, Andrey Simonov): We back businesses that address global health challenges in three business models - value-based care, virtual care and bio.
- Software (Akhil Chainwala and Jose Gaytan de Ayala): We invest in software solutions driving digital transformation within two focus areas - vertical SaaS and the consumerization of enterprise.
- Climate Tech (Natalie Tydeman, Lucinda Palmer and Samuel Marsden): Investing in businesses in the green supply chain and which are supporting the energy transition.
How we win
Our unique investment model is three-pronged. It combines the agility of venture capital, the deep pockets of a growth fund and the stability and generational perspective of a family-owned European holding company. We are able to support company and industry leaders beyond traditional funding rounds, through IPOs and beyond. This approach encourages founders to adopt decade long visions and to think big.
Looking Ahead to 2030
By 2030, we seek to have established ourselves as Europe's premier growth investor and have all the building blocks in place to retain that position - the portfolio companies, the sector teams, the renewed focus. It is incredible to see how far we have come since 2018, and we couldn't be more excited about what the future holds.
