VC Profile: VNV Global

At the end of July, VNV Global raised $95m through a share rights issue in order to assist any of its portfolio companies were they to be adversely affected by the coronavirus pandemic. One of the first beneficiaries of the capital raise was e-scooter operator Voi, which raised $30m in a funding round led by the firm. VNV invested $10m, alongside 20 other new and existing backers. The VC is the largest shareholder, with a 30% stake, followed by Balderton and Creandum.

VNV managing director Per Brilioth says the strategy was to mitigate the coronavirus pandemic: "Thankfully none of our portfolio companies have had liquidity problems. We've just raised $95m to help them but none of them have needed it. In the case of Voi, they didn't have to raise this liquidity, but it gave them the ability to be aggressive."

VNV, founded in the mid-1990s and formerly known as Vostok New Ventures, invests in high-growth technology startups, previously solely in Russia, but now across Europe. It targets companies that can benefit from the network effect, whereby the company's product becomes more valuable with every new user. According to Brilioth, online marketplaces are highly sought after for achieving these network effects, followed by mobility and digital health. In addition to Voi, the VC's portfolio includes UK-based healthcare technology company Babylon Health and French ride-sharing company BlaBlaCar.

Voi is using the proceeds to expand into the UK, which recently legalised e-scooter rentals and is eager to accelerate the use of e-scooters amid the need for social distancing. "At one point, the UK was so shut [to the possibility of legalising e-scooters], with everyone thinking 2022 would be the year the country would open up, but then Covid-19 happened and both consumers and cities wanted to keep people out of the tube," says Brilioth. "People don't want to be cramped into the tube anymore. The UK opening up is a clear example of how important micromobility is becoming."

Because of the pandemic, this summer has been a profitable one for Voi. At the time of its capital raise, the company announced that it achieved double-digit EBITDA margins in the month of June. Brilioth says the company has "collaborated well with city officials, and has held the hand of the city".

VNV's recent activity

Asset	Deal date	Sector	Country	Basic deal type	Deal value (€m)
DOC+	Aug-20	Healthcare equipment & services	Russia	Exit	n/d
Voi Technology	Jul-20	Travel & leisure	Sweden	Expansion	26.7
TransferGo	Jun-20	Financial services	UK	Expansion	9.0
Grace Health	May-20	Healthcare equipment & services	Sweden	Expansion	1.9
Monopoly	Dec-19	Industrial transportation	Russia	Expansion	8.7
Voi Technology	Nov-19	Travel & leisure	Sweden	Expansion	76.2
Hästnet	Sep-19	General retailers	Sweden	Expansion	12.5
Busfor	Sep-19	Software & computer services	Russia	Exit	n/d
Babylon Health	Aug-19	Software & computer services	UK	Expansion	449.3

Source: Unquote Data

Scout programme
In addition to supporting existing companies, the VC has earmarked some of its new capital to invest in European startups at a very early stage. Through its scout programme, the firm will back up to six entrepreneurs, or scouts, with seed investment. VNV will invest 5-10x what the scout invests in a company, offering the scout a portion of the upside of this first investment in return for monitoring the startup.

Brilioth says: "Each of the scouts will back six or seven startups and we'll end up with a portfolio of 30-40 names. The scouts will be people we know well and trust. It's an organised way to get exposure to many startups. Initially they will be too small, but as they grow in a successful manner our presence at the table will enable us to allocate more capital as they raise more money."

VNV's outlook for the rest of the year is positive. "The recovery in the Nordic region has been quite strong. Voi, for example, is coming back very strongly. When we were in the darkest phase in March, we thought 2020 was going to be a cancelled year. We thought 2021 would be like what 2020 was going to look like, but that's ended up being a very conservative view. So, there is still hope and recovery is happening," Brilioth says, although he admits his view may be very "Voi-centric".

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