Hi everyone, welcome to Kinnevik's Capital Markets Day 2021. My name is Torun Litzén, I'm head of corporate communications here at Kinnevik, and I'm also your host today. We have a very exciting agenda where you will get to know members of our team, as well as some of the exciting portfolio companies that we have. As I said, it's a full agenda. Let's get started. We will start off with Georgi Ganev, our CEO, who will take us through the Kinnevik strategy, and he will be followed by Erika Söderberg Johnson, our CFO, to take you through our financial targets as well as our investment guidance. We will move on to go deeper into our focus sectors, healthcare, consumer services, and food. In these deep dives, we will be joined by members of the investment team, as well as the founders of Cityblock, Babylon Health, Kolonial, and Budbee. We are sending live today from Stockholm, and I hope you will take the opportunity to feed us with questions. You can do so on the webcast, where you are watching the broadcast, and I will receive the questions. They will not be visible to anyone else, and I will make sure to pass on as many as we have time for to our audience and guests. Now it's time to let Georgi Ganev take the stage to take us through our strategy. First, let's have a look at what we have achieved in the past two years. Roll the video, please. In 2019, we started the strategic transformation of our portfolio. Since then, we have significantly increased the share of younger high growth businesses and decreased the average tenure across our portfolio. This transformation has been made possible by more dynamic capital reallocation. To ensure that our portfolio remains balanced and vibrant, we have allocated significant capital from divestments and dividends and invested them into high performers in our private portfolio. We have also made sizable cash distributions directly to our shareholders. To future-proof Kinnevik and our portfolio, we've set out to become a sustainability leader. In 2019 and 2020, we set ambitious targets for diversity and inclusion and climate. We did this because we strongly believe that to be a long-term successful company, you need to be part of the solution, not the problem. Our returns over the last two years speak for themselves. From 2019 until now, the IRR in our healthcare portfolio has been more than 220%, and our annualized total shareholder return is 56%. In parallel, we have also strengthened our financial position from SEK 2.9 billion in net debt to SEK 4.3 billion in net cash. In summary, we've had a fantastic journey of value creation and are now in a stronger position than ever to continue delivering on our growth strategy. Hi everyone. Before we dive into today's agenda and elaborate on Kinnevik's strong traction during the past two years, as you saw in the clip right now, I first want to touch upon the unusual context in which we all now found ourselves. Over the last year, we have seen a significant disruption of our lives. A devastating pandemic has resulted in a number of dramatic cultural, economical, and political shifts. As a consequence, this has led to a significant acceleration of the number of people who need and prefer to have their services delivered digitally. At Kinnevik, we have always been firm believers in the benefits of digitization, and the critical shift has now come earlier and faster than anticipated, in months rather than years. As a result, 2020 was a year that strongly validated our strategy and fueled growth among our portfolio companies. What makes me very excited is that Kinnevik is in a position to sustain and supercharge this momentum in the years ahead. Before I jump into the details on how we plan to do that, let me say a few words about the announcement we made last week. As you saw, we announced that we intend to distribute our entire shareholding in Zalando. This represents a distribution of value to our shareholders of around SEK 50 billion, or almost SEK 200 per Kinnevik share. During our 10-year ownership in Zalando, from a small startup in Berlin to Europe's leading fashion platform, we have generated a return of more than 8x our invested capital. A fantastic journey of value creation, but maybe more importantly, an inspiration for our younger portfolio and the Kinnevik team. Following Zalando's very strong performance in 2020, we believe this is the right time to give our shareholders the option to stay invested in Zalando or to divest to get cash, which they may choose to reinvest, why not in Kinnevik? For us, this distribution is a step change in our ongoing strategic transformation. It means that we will significantly increase our focus on younger, high-growth, and primarily unlisted businesses. I will speak more about our strategic transformation in a minute, but I think it's important to highlight that Zalando is a great example of how we work as an investor. We invest early and actively support our companies throughout the different phases of their growth journey. Meanwhile, we believe that Zalando will continue its strong momentum and continue to execute on the growth strategy and create significant value for shareholders going forward. I now want to return to explain how we plan to capitalize on the success of 2020 and why Kinnevik's unique characteristics, which appeal to both our shareholders and our founders, make us particularly apt to do so. In short, what we do and why we will continue to win. First and foremost, I want to remind you all of our unique approach. Kinnevik invests in the best digital companies that we believe will be very successful over the long term, transforming industries and delivering significant returns. This means finding founders who are building sustainable businesses led by diverse teams, and actively working with them at every stage of their journey. This approach hinges on the first priority I set out at our last Capital Markets Day back in 2019, evolving the portfolio towards a higher proportion of growth companies in our target sectors and markets. The distribution of Zalando is an important step in this process. We have also added eight growth companies with total investments of SEK 7.5 billion into our portfolio. Our second priority has been to strengthen the portfolio balance across sectors, stages, and time to liquidity. In 2019, we spoke of having a distribution along the S-curve in terms of growth, size, and maturity. We have applied our systematic processes to identify and invest in businesses that strengthen this distribution. In the venture portfolio to the very left of the S-curve, we have invested in the Nordic Venture companies such as Joint Academy and Simple Feast. In the early growth phase, we've added Common and HungryPanda. Moving a little bit further to the right, you'll find investments such as Vivino. Tele2, at the right-hand side of the S-curve, has a clear role to play in our portfolio. It provides stability and a strong stream of recurring dividends. Two factors which are increasingly important as we pivot the portfolio to a larger share of less mature companies. The incoming cash flow guarantees we can support our portfolio's proven and high-performing companies. In addition, we still see the potential for strong value creation in Tele2 as they continue to capitalize on the benefits from the merger with Tele2 and the launch of the 5G. Finally, we set out to reallocate capital more dynamically, exiting a number of businesses at attractive terms as a relatively young portfolio matures. Again, we've seen tangible progress here. For example, Kinnevik invested in Bread in 2018, seeing an opportunity for the company to transform the way merchants can benefit from more flexible financial solutions. In Q4 2020, Bread was acquired by Alliance Data for $500 million, returning an IRR of more than 30% to Kinnevik. Furthermore, we received SEK 1.2 billion in proceeds from our investments in Livongo in connection with the company's merger with Teladoc. We also continued to prune the portfolio by divesting legacy companies. To conclude, our strategy remains intact, and it's extremely motivating to see that it is driving us towards achieving our vision of being Europe's leading listed investor focusing on tech-enabled growth stage businesses. We're partnering with the most innovative companies that are finding new ways to make consumers' lives better and growing them into digital category winners. Our approach is built upon four fundamental pillars that enable us to identify the best new companies and that our portfolio companies are firmly on path to profitable growth. First, we have a strong track record of understanding complex and fast-changing consumer behaviors early on and boldly backing the business models that will underpin these shifting trends. Our operating model allows our sector experts to spend significant time with the teams at our companies as an active investor. This expertise is not new. We applied it in the '80s when we challenged and changed the telecom and media landscape. We applied it 10 years ago being pioneers in e-commerce, and we have applied it again as we pivot Kinnevik's portfolio a third time when we identified healthcare and food as sectors that would fundamentally be transformed by the ongoing shift to digital services. As a result, Kinnevik has built the strongest health tech portfolio of any European investor, and we're invested in the largest online grocers in the Nordics, and we are building an exciting portfolio across managed marketplaces and food tech. One of my priorities as CEO has been to add operational expertise to the investment team to have the capacity to work alongside leadership across hiring, sales, new market entry, and at every step of the company's journey. In addition to the strong team we have at Kinnevik, we also have a broad network of external advisors and co-investors in all the markets where we operate. Through our active ownership, we also help our portfolio companies to access and add the best talents to their teams and boards and see potential to cross-fertilize between them. For example, Jennifer Schneider, former Chief Medical Officer and President of Livongo, joined the board of our more recent investment, Cityblock, a few months back. Stina Bergfors, former Managing Director of Google Sweden, who started her career at TV3, joined the board of Budbee, and is now proposed to join the board of Tele2 later this year. We have Jere Calmes, former CEO of Tele2 Russia and a board director of Tele2, coming back as CEO of Lamoda, GFG's Russian business. Secondly, we have a strong track record of building successful businesses over the long term, looking both at our larger holdings and our newer growth portfolio. We have always focused on finding the next generation of winning businesses and working closely with them for decades of growth. The main reason we can do this is that we have the flexibility of permanent capital, unrestricted by investment constraints and fund maturities, making us a well-placed partner to our businesses at every stage of their journey. Examples like Tele2 and Zalando are of course well known, but in the past three years, we have added a number of exciting companies to our portfolio where we already see value creation. For example, we invested in VillageMD in the autumn of 2019 and doubled down already the year after. In 2020, VillageMD also entered a partnership with Walgreens, which has been transformational for the company. Our IRR to date for the VillageMD investment is more than 320%. Yet, this is only the beginning. Three other examples are Babylon, Cityblock, and Kolonial, companies which you will meet later today in the program. We combine the experience of building for the long term that I just described with the insights of our entrepreneurial network to help our newer growth stage companies. In our Nordic portfolio, both Budbee and Pleo were early-stage venture bets when we first invested back in 2018. Budbee is now the Swedish market leader in last mile logistics and recently scaling up in Europe with partners such as H&M, ASOS, and Zalando. We will hear a bit more from the company's founder and CEO, Fredrik Hamilton, a bit later today. Pleo, a Danish financial services company that offers smart payment cards to employees, has grown from having local Danish operations when we first invested in 2018 to having offices in London, Berlin, Stockholm, and Madrid, and with more than 13,000 businesses using Pleo cards across six European markets. Thirdly, our deeply embedded sustainability principles, particularly in climate and in diversity and inclusion, set us apart from other investors and will bring the greatest returns 30 years from now. We want to help the digital businesses of tomorrow to create a more sustainable and resilient future because we believe that this will give us a commercial advantage. We see huge risks in partnering with businesses that look at short-term gain without thinking about the environmental, social, and governance impact they are having for future generations. In May 2020, Kinnevik set climate targets aligned with the Paris Agreement to significantly reduce the greenhouse gas emissions from our own operations and our portfolio at large. Our ambition is to develop our companies into long-term sustainable businesses and to future-proof them for the new low-carbon economy. A year earlier in May 2019, we launched a diversity and inclusion framework for gender equality, and since then, we've made decisive progress, including improving our management team composition and incorporating the D&I aspects into all stages of our investment process and adding nine female board directors to the board of our portfolio companies. We're not paying lip service to these values. They are deeply embedded into how we operate with each investment's impact measured against specific sustainability standards in order to secure the firm's success for years to come. Finally, the fourth and final pillar that underpins our approach is our uniqueness as a public company, which gives our shareholders access and exposure to a portfolio of the world's most exciting private businesses. These companies have the potential to create superior returns. Kinnevik can remain a shareholder as they move from the private to the public markets. What is particularly rewarding is that in the past year, value creation was well distributed across most of our sectors and companies and maturity stages, a testament to our efforts to rebalance our portfolio. With that, I would now like to move on to look at how our execution of our strategy have translated into our capital allocation framework. As you recall, when we laid out our framework at our last Capital Markets Day, we set out to invest two-thirds of our capital in follow-on investments in the proven and high-performing companies in our portfolio to reach ownership levels where we have a meaningful influence. Secondly, we said we would invest approximately one-third of our capital into new businesses to ensure we keep our portfolio invigorated. Thirdly, with our target to maintain a portfolio of around 30 companies, this means aiming to exit almost as many companies as we're looking to add over time. Let us now look at how we have executed on the framework through 2019 and 2020, although you should see this as a guidance over the longer cycle. In total, we have invested SEK 7.5 billion into our portfolio, and we have received SEK 2.5 billion in proceeds if we exclude the sell downs in Zalando and Tele2 dividends. We have found exciting and attractive investments across all our focus geographies with an even stronger momentum in 2020 than in 2019. Most of our existing portfolio companies have shown operational strength and resilience during the pandemic, and this has resulted in a slight over-allocation in new investments compared to what the framework envisages. In total, we have added eight companies at the high range of what we advertised, five of them international growth, and three of them in the Nordics. We also have been disciplined in pruning our portfolio, exiting 10 investments, going from 28 companies in early 2019 to a net total of 26 today, slightly below our target of 30 companies. In terms of distribution of capital across our sectors, we're slightly overweight in the healthcare, given the opportunities we have and continue to see, investing 40% of the capital into this sector. We have also succeeded in establishing food as a standalone vertical, with almost one-third of the capital invested in this exciting and, for Kinnevik, relatively new sector. We have allocated less into financial services, and we will touch upon why when we speak more about our investment sectors. Not least, we have continued to transform our consumer services portfolio beyond predominantly fashion e-commerce by investing into new, exciting business models. I will now hand over to Erika Söderberg Johnson, our CFO, to take you through our financial framework and targets in more detail. Welcome, Erika. Thank you, Georgi. Since I joined Kinnevik nearly a year ago, we have continued the transformation of Kinnevik, and the distribution of Zalando marks an important milestone in our pivot towards a portfolio with a larger share of younger, unlisted growth investments. I would touch upon two things, our financial targets and our financial position, and our investments in 2021. Our financial targets will remain unchanged after Zalando has been distributed. This may sound a bit counterintuitive, as our net asset value and our portfolio balance will look very different at that point, but hopefully, I'll be able to shed some more light on this. First, we aim to deliver a TSR of 12%-15% over a business cycle. This target is built up through a bottom-up approach, whereby we assess the required returns for each individual company based on several factors such as geography, business model maturity, liquidity. We then aggregate these on a portfolio level and reaches the return target for Kinnevik as a whole. Our return target remains untouched, as the cost of capital for Zalando happened to be roughly in line with the portfolio average. However, it is our long-term goal to reach a portfolio balance that warrants an increased return target. As we continue to invest in venture high-growth companies with strong returns, our growth portfolio's relative share of the portfolio as a whole will increase, and we will then have reason to increase our return target. However, that moment is not now. Second, our maximum tolerance for leverage is unchanged. Given the nature of our investments, we aim to have a low leverage, not exceeding 10% of portfolio value. We currently have a net cash position of 4.3 billion SEK and do not foresee entering into net debt territory over the coming 18 to 24 months. Lastly, our shareholder remuneration policy also remains unchanged. In 2019, Kinnevik transitioned from an annual dividend to instead pay back returns from our investments, generate more investments through the extra dividends. Sorry for that. If the AGM approves the distribution of Zalando, nearly 260 SEK per share in dividends in cash and in kind will have been granted under this policy. We will continue to carefully evaluate our liquidity needs to ensure that we have an efficient capital structure also going forward. However, with a slimmed down and much more growth focused portfolio, with more cash consuming businesses, what could be considered to be excess capital in our view has shifted. We therefore think it is necessary to have a net cash position going forward owing to three factors. First of all, it is crucial for us to maintain our investment momentum as we continue accelerating the building of our growth portfolio. Secondly, we continue to see exciting prospects both within our existing growth companies, but also in prospective new investments. Thirdly, not if but when a market correction comes, we want to have a strong financial position from which we can be buyers of long-term exciting growth businesses and not sellers. I will now move on from our financial targets to comment on our investments in 2021. In our current plans, we expect to invest somewhere in between the money put to work in 2019 and 2020 which gives a range from SEK 2 billion-SEK 5 billion. We are likely to again be slightly overweight in new investments relative to our framework as we continue to build a balanced growth portfolio across sectors, stages, and business models. To fund the maintained investment momentum, we continue to reallocate capital in a disciplined and dynamic way between our existing assets. For this purpose, Tele2 remains an important source of funding and an engine in the continued transformation of our portfolio. To conclude, Kinnevik is in a strong financial position from which we aim to continue to deliver great returns to our shareholders through the continued execution on our strategy. Thank you. Thanks, Erika. Come and join Georgi and myself over here. Georgi and Erika, you've given us the insights into what will be driving Kinnevik going forward. We also thought it would be interesting to invite some outside perspectives. We asked John Hernander, who is Chief Investment Officer at Nordea Asset Management, and Stefan Wård to pose a couple of questions. The first one is from John, and I believe, Erika, this one is for you. I am John Hernander. I work for Nordea Asset Management in Stockholm, where I work as a portfolio manager and also head of the team that invest in the Nordic Finnish and Swedish equities. You plan to exit Zalando, which partially has been used to sort of deliver the balance sheet. Tele2 will offer dividends supporting your funding for investment, how do you see the growth portfolio's ability to self-fund itself for future investments? Thank you, John. I would say the ability is good. We work actively with our capital reallocation strategy, as we have alluded to earlier. This means that we are not only looking at new investment opportunities, but also actively looking into our existing portfolio to assess whether we can crystallize value at different stages. I would say that our portfolio's ability to fund itself, it's related to the portfolio balance and the S-curve that Georgi talked about earlier today. Our intention with that is to have companies at different stages of maturity and different time to liquidity. Having said that, even if we have Tele2 that provides excellent return that we can reallocate to younger assets. We've also seen proofs that we can exit companies at an earlier stage or crystallize value at an earlier stage. For instance, the sale of Bread that Georgi also mentioned, and the cash proceeds that we actually received as part of the merger between Livongo and Teladoc. Thanks, Erika. I think John also had a question for you, Georgi. Let's hear what he had to say. Many of your portfolio companies seem to have benefited during the recent period. If you take the food segment as an example, how do you work with your portfolio companies to secure as much sale as possible when the pandemic ends and some of our pent-up behavior might be different than to shop online? Yeah, I think it's very interesting to see that in our cohorts of these new customers that we have acquired, the retention factor is actually very high. People are used to the services after this long period, and the frequency is increasing. We are actually quite optimistic and positive when it comes to the ability of retaining these customers. The survival rates of those seem to be as good or even sometimes better than the other type of customers that we have acquired in the past. Of course, extremely important, as you say, to make sure we deliver superior customer experience so that these customers actually will continue to use these products. We're very optimistic here. I think Stefan Wård from Pareto Securities also had a question for you, Georgi. Global Fashion Group has developed very strongly over the past 12 months. It's fashion retail, it's emerging markets. It's not growing that aggressively. Can you describe how Global Fashion Group fits into your future strategy for Kinnevik? Thank you. Thank you, Stefan. We believe that the operational performance of Global Fashion Group has actually been quite good for some time, but the company has not really been appreciated by the market until quite recently. In the past, it has been undervalued, and we think that much of the value creation could actually lie in front of us, not behind us. That's the first thing I would like to say. Secondly, we know and understand this type of business model since we've been invested in this space for many years. Therefore, we feel very comfortable about what can be achieved when a company like GFG is pivoting towards to have a higher share of, for instance, marketplace sales. Therefore, we are comfortable of being a lead shareholder in a company like this. The geographical exposure might not fit exactly as with Kinnevik's other investments or strategy. We have to remember that we also have mature market exposures within the Global Fashion Group. It's not black and white. We believe it's a strong asset, and we understand the sector. Thanks, Georgi. We have received a question from the audience, and it's about Tele2. The question is that now that we've decided to hold on to Tele2, could we consider or support them if they would want to go into things such as media and content? I think that's ultimately a strategy question for Tele2 and not for Kinnevik. We think that Tele2 has a very strong position as of today, and that's why we supported the merger between Tele2 and Com Hem. We think that there's a lot more to capitalize on when it comes to the merger of those two assets in really developing strong fixed mobile convergent offerings in Sweden. I think that will primarily be the focus for the company. Again, I think when it comes to different options, whether you should move more into content, et cetera, it's more a question for the company. Absolutely. Okay. I think we have time for one final question, also from the audience. It's around the timing for announcing the spin of Zalando. Why now? Yeah, I think it's of course a very relevant question. I touched upon it a little bit in my introduction speech. I think first of all, we see that the company is very strong at the moment. It's been a great platform for many years, but I think if we look at the market reactions of Zalando now compared to one and a half, two years ago, it's quite different. That's the first reason. We also believe that we have meanwhile been able to deliver concrete proof points and value creation in the remaining portfolio of Kinnevik. You have these two effects of, one, the portfolio of the younger assets being much stronger now than it was before, and the fact that Zalando is actually stronger than ever. Therefore, we believe that it's very natural for Zalando to start its next journey without Kinnevik as a lead shareholder and allow our shareholders to be direct owners in Zalando without actually having us as a proxy. Okay. I think that's all we have time for now. You can ask questions, please do so through the website. It's now time to move into our investment sectors. I will start by having a chat with Natalie Tydeman. She is a senior investment director in our London office. She joined us in January at the start of the year. Hi, Natalie. Hi, Torun. How are you? Good, thanks. Good. Good. Can you tell the audience a little bit about yourself? Yes. I've been operating and investing in digital businesses for 20-odd years. I've also been part of the extended Kinnevik family for a number of years on the board of MTG. I'm really delighted now to have joined Kinnevik itself at this very exciting point in the Kinnevik journey, where we have, I think, a really high potential portfolio, a really strong team and track record, and I think we're in a very unique position with our permanent capital structure. The portfolio, what excites you the most? A lot of it's already been said earlier in the presentations, but it's really three things. First of all, it's the fact that we have a portfolio that's well distributed across stages and time to liquidity, the S-curve that Georgi mentioned earlier. Secondly, I think it's the fact that we've been able to demonstrate our capacity to create value in quite a balanced way across multiple sectors. While the healthcare sector has been exceptional, we've also had really strong performance in consumer services, for example. I think thirdly, it's really about the new future, the next stage of the journey post the Zalando distribution, when this portfolio of young, high growth businesses can really come to the front and shine in its own right. You're two months into the job. What have you been up to in these two months? Focusing initially on strategy. As has been highlighted earlier, we've been less successful in deploying capital into financial services, and generated relatively lower returns in that sector relative to consumer services and healthcare. I've been working to understand the reasons behind this and working with the team to develop the strategy going forward. Wow, that sounds intriguing to the audience. Can you share a little bit of your thinking? Yes. Looking back, we've been investing in financial services for about 10 years. It was actually the second pillar of the organization next to e-commerce. That sector has generally been behind compared to e-commerce when it comes to innovation, and that's really just a factor of the complexity and capital required to build financial services businesses. Financial services fulfill a very important core need in people's lives, and therefore, that sector is a great fit with Kinnevik's mission. We also think it's a really exciting space with continued long runway for disruption. As I said, we would have liked to have deployed more capital into the sector historically, and we certainly would like to find opportunities going forward. The B2C space, which has been our traditional heartland, has been increasingly crowded with investors congregating around the winners and pushing up valuations, which has made some of the opportunities a bit challenging. What about the companies we already have in our portfolio? How do they fit into this thinking? Yeah. Looking back over the portfolio, we have some companies where we clearly haven't seen the returns that we'd envisaged, but we've got several that have emerged as real success stories. In particular, the trend that we're starting to see is success in a new category of companies with B2B2C models. These are companies that are enabling the growth of companies in our other core sectors. What would be examples from our portfolio? Bread, Cedar, Pleo, those are all great examples of successful investments in this category with high IRR. Just to give you a bit more of an example, Cedar, the platform for providing a smarter way for hospitals, health systems, and medical groups to manage the patient payment ecosystem, is a financial services business powering a healthcare business, and therefore bridges those two sectors for us. This is a category of companies that we call enablers, and this is clearly an overarching area of interest for us across all of our sectors. These are companies that insert themselves deeply into their respective value chains. They power the growth of the companies that they service, and in our case, they leverage insights across multiple sectors. How will you develop the strategy going forward? What should we expect? I think in financial services, we haven't had quite as much of a thematic approach as we have had in healthcare and consumer services. We've deployed that strategy with great success in those two sectors. It's a sourcing approach I've long been an advocate of and long practiced. Going forward, we'll look to implement that more intrinsically in financial services. Now that we are comfortable with the B2B2C model, we'd like to look for more opportunities of that type across all of our sectors. This theme of enablers that I mentioned earlier, and which I know we'll talk more about later, is definitely going to be a key focus for us. Okay. I think that leaves the audience with great anticipation of what's to come. Thank you so much, Natalie, for joining us. Thank you. I'm sure we'll hear more from you. Thanks. It's now time to move on to our investments in the healthcare sector, and we will be joined by members of the team, as well as some of the amazing founders that we partner with. Before, let's start with a clip outlining what's going on in the healthcare sector. We will now be joined by Chris Bischoff, senior investment director, and Christian Scherrer, investment manager, both working primarily within our healthcare sector. Chris, it was recently announced that you will actually be leaving Kinnevik to take up a position with General Catalyst, and that's, of course, a partner of ours in companies such as Livongo and Teladoc and Cityblock. You've been part of building our organization for eight years. Can you share with us what's been the most exciting for these past years? Yes, Torun. It's been an extraordinary transformation over these last eight years, and I think it's one that reflects the boldness and vision that are the hallmarks of Kinnevik. If you look at Kinnevik today, it's comparable to the company I joined back in 2013, and I think that reflects the strategic shifts we very intentionally undertook across sector, geography, and investment stage. I'm particularly proud of our journey in healthcare, where we anticipated some of the key trends that are driving change and better care today and carefully built a portfolio of five high-performing assets in five years. These assets are now valued over $3 billion, and pro forma for the proposed spin-off of Zalando will account for 40% of Kinnevik's NAV. Whilst I will be leaving the firm, I believe this extraordinary portfolio will serve as a pillar of Kinnevik for many years to come, and I look forward to partnering with Kinnevik on new investments, and I will remain a very proud shareholder. I'm certainly glad to hear that. Christian, you've been part of establishing our strategy within healthcare, and you've also been part of investing into some of our current portfolio winners. Could you share with the audience what's going on in the healthcare sector today that is driving our investment thesis? Yeah, sure, Torun. Healthcare is one of the largest and fastest-growing cost drivers in the U.S. economy. Every fifth dollar is spent on healthcare, and it's growing at twice the rate of GDP growth. Clearly, Torun, these trends are not sustainable, and they take bold action to be reverted. Christian, if you take a look at the U.S. healthcare ecosystem, how do you think around the need to lower costs, but at the same time drive more quality and better patient experience, particularly in a time like this where there's so much need? Yeah, Chris. I think it's easy to dehumanize healthcare because of all the cost and complexity that's in the system. Chris, you're right to focus on the patient first. One in three families in the U.S. actually did not seek medical care because of cost reasons. That's a shocking number. We see two levers that will improve patient experience and at the same time reduce cost. The first is digital care delivery. Last year, virtual care went from an adjacency use case to really to the norm. Chris, you see this in, for example, in the number of primary care physicians that used telehealth to treat patients growing from 20% to 80%. The second thing we're seeing is really the acceleration of value-based care. The government continues to push spend into the private markets to incentivize more adoption of value-based care contracting. One of the ways we see this is in the massive shift to Medicare Advantage. Christian, I think for some of the audience, a concept like Medicare is not so well known. Could you explain what that is? Yeah, sure, Torun. Medicare is the U.S. government's health coverage for over 65-year-olds. Medicare Advantage is the part of Medicare where private companies can acquire members and manage them at their own risk. The number of Medicare Advantage beneficiaries more than doubled over the last 10 years. We see it almost doubling again over the next 10 years. That is one of the reasons why we're really excited about our exposure in value-based care. We talk a lot about value-based care and this notion of focusing on outcomes rather than repetitive treatments. If this is so beneficial, why is not everyone doing value-based care? Yeah, Torun, it sounds intuitive, but it's actually extremely complex to execute. It takes capabilities that a typical provider just doesn't have. For example, it takes risk contracting capabilities with insurers or world-class data science capabilities to be able to access and monitor patients from afar. In a way, this creates a unique opportunity for new entrants to enter this market, provide these services, and wrap them around these physician networks, and that's really what we're seeing happening in the market right now with pure-play value-based care providers expand rapidly, such as VillageMD, Oak Street Health, and so on. Okay. We will shortly be joined by Toyin and Iyah, the founders of Cityblock, and they were here briefly before. Before we start talking to them, Christian, can you tell me how did we meet up with them? How did you find them? Yeah. We had invested in VillageMD in 2019, which gave us our first exposure in value-based care and really in what I touched on before in the Medicare Advantage and commercial markets. We were looking to expand this exposure into the Medicaid market, which is the program for the underprivileged in the U.S. We found Cityblock and met Iyah at one of the largest healthcare conferences in the U.S. a couple of years ago, and we sat down with him and Andy Slavitt, who we were working with. Chris, thanks for joining. Christian, you will be back to join the conversation with Iyah and Toyin. Before you leave us, Chris, thanks a lot for all your contributions to Kinnevik, and we look forward to keep working with you as a partner at General Catalyst. Thank you, Torun. Before we start talking to Iyah and Toyin, let's have a short look at what does Cityblock do? Cityblock is a leading tech-driven, value-based healthcare provider for populations with complex care needs in underserved communities in the U.S. Cityblock was founded on the premise that health starts at the neighborhood level. They built a care model that addresses the root causes of health, seamlessly integrating primary care, behavioral health, and social services in a flexible, scalable model. In doing so, they have improved health and lives in communities that have previously been underserved. They are working with partners that manage billions in medical spend. Today, they are delivering care to thousands of people across the United States. They're not stopping there, because what people want is better health, not more healthcare. We're so excited to have you with us. Thank you. It's a pleasure to be with you today. Good. The audience just saw a short clip about Cityblock. Toyin, can you explain why are the patients that you care for, why are they falling through the cracks in the U.S. healthcare system today? Absolutely. Thank you so much for having us here. Our patients are underserved because the healthcare system in the United States and the social safety net aren't equipped to handle the needs of folks whose health needs intersect with poverty. We have a significant population in the United States who struggle with the confluence of poverty, lack of access to social services, systemic under-investment in their communities, as well as physical health and mental health and substance use challenges, all of which predispose them to worse outcomes and to higher acute care utilization. It follows that these patients then fall through the cracks when they hit up against a healthcare system that, for all the reasons that Christian sort of laid out and helped to explain, is really focused on reactive care, whose incentives aren't aligned around improving outcomes typically, but instead around dosing out elements of episodic reactive care when people show up in the acute care setting. For our members, being able to wrap around them, ensure that people have the time and the trusted relationships that they need to access comprehensive healthcare services in the community before they need to go to the hospital, has been a longstanding challenge in the healthcare system and majorly contributes to rising costs and worsening outcomes over time. These are the folks who we are really built to serve. Thanks, Toyin. Could you explain to us what the care model does that's unique in the market to really serve the patients you just described? Absolutely. When we think about the needs of the patients in the communities that we serve, these are folks, as I described, who have multiple competing priorities. They're both struggling with social issues and often with mental health and chronic physical health needs. What we know is that a healthcare model like ours needs to be focused on engagement and really driving trust and activation. The data shows, even before the pandemic, that populations with the most complex needs often have the lowest utilization of primary care and mental health services, largely because of the way it's reimbursed, but also because of lack of access. The first thing that we do is focus on engaging people and building meaningful, trusted relationships with individuals and communities so that they're able to access health services, often coming out of a background of having felt very stigmatized and marginalized from the traditional healthcare system. The next thing that's really important is being able to integrate services. We know that human beings don't exist as sort of separated organ systems or separated clinical diagnoses. Our brains and our mental health is connected to our physical health, is connected to our environment. Separating out the delivery of healthcare doesn't actually work for people. What we do is we integrate those services. We provide mental health and physical health and social care all in the same place, recognizing that people's needs are holistic and we've got to address them in a holistic way. The other piece that is so critical is the ability to meet people where they are. We talk about this as a core of our model. It's not just physically, so we serve members in our physical hubs located in the communities where they live. We also serve people in their homes and have an extensive home-based clinical model. We care for people during moments of transition when they're in the hospital and need to be transitioned home. We accompany people to social services within the community. We're there 24/7, 365, virtually and in person. The recognition that our healthcare needs don't follow a 9:00 to 5:00 schedule, but that we really must be able to meet people where they are and infuse all of our services with an idea toward scale, to technology allowing us to surface insights and drive decision support so we're fully integrating the needs of the members with where they're living and working and experiencing their day-to-day lives. That is very unique in the market. That heterogeneous approach, that ability to really serve people with mental health and physical and social needs, and to show up where they are in an integrated model. Yeah. Thank you. Thanks, Toyin. Iyah, it sounds like it's a complex population, right? It really requires this high-touch extensive care model that Toyin was walking us through. Could you help us explain how you drive margin in a model like that? Sure. Thanks, Christian. The U.S. healthcare system is deeply wasteful, and as you well articulated at the top, much of that waste stems from the way that we pay for services. On a fee-for-service basis or paying for units of service in Brooklyn, which is where Toyin and I both call home, going to the hospital costs $10,000, $11,000. For $11,000, I can pay for food for a family of four for two and a half years. I can pay for 500 hours of community health worker time, 120 primary care visits, 180 behavioral health visits. The disproportionate way in which dollars are allocated in this system perpetuates this system of high cost and perpetuates a system of inefficient outcomes. In the way that we are paid, as you described, Christian, as a value-based organization, we're able to invest upstream and keep people first out of hospital. Keeping them out of the in-patient hospital and emergency setting is the most important cost lever that we can pull, and we believe there's between 30% and 40% of wasted spending in the system. From there, third-party claims, first-party assessments that we do create very strong data signals in a tech-enabled system that allows us to deploy selectively highest ROI interventions, whether they be for medical, behavioral, or social needs, that allows us to meet acuity level and specific need of individual members in a cost-efficient way. All of this is built around the premise that we take full accountability for the total spending of a population, and by investing upstream in primary prevention and community services, which in the U.S. is notably absent as you and Toyin have both well-described, we're able to keep people out of the downstream and much more expensive inefficient settings. Great. Lastly, Iyah, I think the audience would be super interested in hearing your approach to quantify the market opportunity, and also whether you're focused on Medicaid for the long term, or you would expand that population focus as well going forward. Sure. On the total market opportunity, Christian, it's truly massive. We often joke with our investors that our TAM represents a bigger TAM than the entire rest of their portfolio if they're not healthcare investors. It is a truly in the U.S. only, depending on how one counts it, $1.2, $1.3 trillion total addressable market of public programs alone, of which managed public programs, as you described, Christian, account for about $700 billion. That is those privately managed dollars, of which the vast majority is complex or disproportionately high-need populations. Beyond that, of course, then you can think of comparables in other places. We get calls frequently from other countries about whether the sort of portable components of our model are applicable in other developing or developed countries' ecosystems where even though the broader social safety net may be richer, the underlying need for folks with high needs is often equally potent. We started with Medicaid and dual-eligible populations, both because it's what we know well and it's where our passion is, and because we see significant differentiation and greenfield in the market. Certainly over time, we see massive expansion beyond that. Wow, thank you so much. This makes me want to be a patient of Cityblock. Thank you so much for joining us, Iyah and Toyin, and great to have you with us. Thank you for having us. Thank you so much, Torun. Thank you. While Cityblock is the most recent investment in our healthcare portfolio, we will now move on to the veteran. That is Babylon Health, our first investment into healthcare, and one we did in 2016. We will shortly be joined by Ali Parsa, who is the Founder and CEO, and Georgi will also be back to join the conversation. First, let's have a look at the operations of Babylon Health. Babylon is a digital healthcare service company set to re-engineer a better model of healthcare by providing artificial intelligence and broader technologies with the best human expertise. Their mission is to put an accessible and affordable healthcare service in the hands of every person on Earth by leveraging tech. By automating routine tasks, Babylon allows doctors to focus on what they do best: give care to the patients who need it the most. Based in the U.K., Babylon currently provides services for millions of members and 170 global partners in several countries across four continents, with a strong emphasis on the U.S. Hi, Ali. Good to see you. Hi. How are you? I'm excellent. Thank you so much for having me. Good. We're very glad that you're here. Of course, we need to talk about the pandemic. We're one year into the pandemic, I know it's been transformational also for Babylon. Can you tell us how has that impacted Babylon? The pandemic, I think, has impacted all of us, both personally and professionally. While it has been very good in growing Babylon. I think that no one should gloat about this. I lost my own father to the pandemic last year, my best friend. It's a sad thing that is happening to all of us. The effect for Babylon has been one of immense growth. We have quadrupled our revenue again last year. We had done the same the year before, as you know, we are hoping to achieve the same this year. Our consumer-based paid members went to 20 million. We saw a patient every five seconds. We delivered 1.3 million clinical consultation, 2 million AI interaction. We moved into the United States, where we now in California alone look after 3.5 million Medicaid patients for their telemedicine, not end-to-end. We also managed to build a business from scratch on what you earlier described so well by Christian and Toyin and Iyah on value-based care, where we built a business of about 65,000 members now. Christian very rightly described the importance of that sector, but if you think about one of the companies Christian mentioned, Oak Street Health, it took them about 10 years to go from zero to 70,000 members, and we went to 70,000 members in a matter of 10 weeks, frankly. From at the end of September, we had none, and now we have about 65,000. It's been good. We've grown a lot, but it has taken a huge toll on the world as a whole, so I don't want to be too boastful about what is not a good event for all. Ali, we've been part of this impressive journey for some years now. This is only the beginning. Now when you're going in for real into the U.S. market, which is a very competitive market, what is the uniqueness? What makes Babylon different? What can be different for the American patient? I'm not sure whether we will be unique, but I think we have something to offer, and what we have to offer is a platform that was built to scale. To not deal with sick care, as it was described earlier so well, but to focus on keeping people healthy and monitor them continuously. Of course, unfortunately, if they do get sick, to then look after them intensively to bring them back to health and then trying to keep them at the height of their health. That model is still a small minority of providers in the U.S. who do so. Again, I was listening to Christian earlier on, how he described it really well, that it's an incredibly hard thing to do to monitor people while they're healthy. You must remember that entire sick care system in the United States, and we call it healthcare, it really isn't. It waits for people to get sick, and then it fixes them and brings them back. It's a highly valuable thing to do, but the entire incentive system is based around that sick care, and there are not that many players who are trying to take the budget, as Cityblock is doing, take the budget and then invest it heavily in keeping people healthy. As Iyah described earlier, this is an industry that has huge potential. The TAM is massive. The value-based section in it is tiny. The room for growth is significant. I was talking to a member of the new administration and an official of the White House the other day, and when you look at how much there is to go and how much appetite there is for this, I think there is room for everybody to grow. Great to hear, Ali. You've expanded the platform from being very product or centralized, powerful AI, moving to value-based care and physical care. What's your view of the omni-channel, if you will, of healthcare going forward? Let's say 10 years from now, what will be digitally, what will be physically, you think? I was born in Middle East, and they say if you want God to laugh in that part of the world, you give her your two-year plan. The reality is, none of us can predict where the world will be in 10 years' time, but I think what we will see is a much more integrated world. One in which what I wear in my watch, the actions that is monitored on my phone, will have a direct effect in the ability of healthcare providers to continuously monitor me, one. Two, to give me an assessment of my health in dynamic, continuous basis and predict where I'm going. Three, to continuously adjust my health goals. Four, to give me plans that are personalized to me to meet those health goals. Five, to monitor me seamlessly. Six, to reward me for staying healthy. That continuum between physical to virtual will be seamless. I hear a lot of people talking about, look, we have to do things in the physical world, and I believe that too. The reality is, there is nothing that is scalable by building more clinics, by building more hospitals, by creating more beds. Also, when you look at the on Examination, that only looks after people in the tiny amount of time through their lives that they go visit a doctor. That is not what determines our health. It's almost everything else we do. How I speak today is more than anything else related to the fact that I slept well last night. If I had slept badly last night, as I do often, then what you have would be a much worse performance today than I would have done otherwise. By the way, speaking of performance, Georgi, I heard your speech. You're a pro. Not only are you a fantastic CEO, you're a great presenter. Thank you very much, Ali. I think you told me once that this is not about replacing doctors and nurses. This is about making them 10 times more efficient, and that's what you're alluding to, how we can use this data on an ongoing basis. Very interesting. My final question, Ali, is around your capitated model. When you're now bringing that from U.S. into Asia and Europe, what is the main difference here, looking at that model? I think if I go back and think about perhaps one of the biggest mistakes we made in Babylon was not to go to the U.S. fast enough. U.S. is the largest market in healthcare. It is not only 40% of all the revenue in healthcare, it is probably well north of 50%, the majority of the disposable healthcare capability in healthcare. In U.K., we have, say, a $200 billion healthcare market, but the reality is 90% of that is allocated and cannot shift in any shape or form. U.S. has a huge advantage, and I am delighted that we are in the U.S. We will give it all the attention it needs in the next two years to catch up with what we should have done maybe a couple of years earlier. Having said that, beyond U.S., I see Asia as the fastest-growing market in healthcare. We're lucky to be in 11 Asian countries with our software that allows us to monitor, to watch and see how people behave, to collect the data that we require in order to plan all the clinical operations. I hope that once we get our head around the U.S. and have that organized, we'll move into the Asian market. I think that, as you have often told me, Georgi, CEOs are defined by their ability to focus, and I think in the next two years, our focus will remain United States, while we keep our home that we are very proud of in Europe, and in the U.K. specifically, and we do continue doing our work in Rwanda. One of the things I didn't mention, and I must mention, is the fact that last year brought for us a contract that perhaps I'm most proud of, which is Excellency President Kagame of Rwanda, where we wrote a 10-year contract to deliver free at the point of delivery, universal primary care to the entire population of the country. We have already registered 20% of that population. We deliver 3,500 consultations at a cost of around one and a half dollar each every single day in Rwanda. That tells you how scalable healthcare can be, and I think that is the way to go for the rest of the world. That's fantastic, Ali, and I think a lot of exciting things happening going forward. Thank you so much for joining us, and we look forward to hosting you again at our next event. Thank you for having me. Thank you very much, Ali. Thank you, Ali. Thank you. I think we still have Christian on the line. Hi, Christian. Hey, Torun. We've now heard from Cityblock, and Iyah, and Toyin, and Ali. What are your reflections on what you've heard and what it means for our healthcare portfolio and our focus going forward? Yeah. Thanks, Torun. I think what is evident listening to the three of them is really that despite the scientific advancements in healthcare, there remain very large care gaps. That's something we call health inequity, and it's effectively an unfair distribution of access and quality of care across the country. We are very determined to keep backing these missionary companies like Babylon and Cityblock that help close these care gaps and make quality care accessible to people, no matter where they live or where they come from. Fantastic. Thank you so much, Christian. That concludes our discussion on the healthcare sector, and we will now move on to talk about the consumer services sector. Before we're joined by our Investment Director, Akhil, let's have a look at the macroeconomics of the consumer services sector. Joining us now on Zoom is Akhil Chainwala, who is Investment Director in our London office. Hi, Akhil. Hi, Torun. Hi. You seem relieved that there's only one person in this handover. Yeah. It makes it easier. Good to have you with us. As Georgi alluded to, we are in the midst of trying to transform our consumer services sector, which was a couple of years ago very focused on safe fashion e-commerce, and we have deployed some SEK 1.7 billion into companies such as Common and Vivino, and you have been very much part of driving that transformation and these investments. Can you explain to the audience how do they fit into our new sort of focus within consumer services? Sure. Over the last three years, what we've done is we've begun a journey to reshape our consumer services portfolio. As you and Georgi alluded to, this was historically based on two pillars, inventory-based e-commerce and listings-based classifieds marketplaces. Times change, consumers change, and so do we. Therefore, we're now refocusing our attention both in terms of our new investments and in challenging our existing investee companies to adapt. What do we mean by refocusing our attention? Three things. One, broadening our focus segments, two, investing in interesting and new and innovative business models, three, structurally lowering acquisition costs. Okay. Take the first theme around broadening our vision and where we're looking. Please explain where are we looking? What are we doing? Historically, our portfolio was quite skewed towards physical goods, apparel, furniture, used goods. These were well-aligned with where online penetration was 10 years ago. Today, Millennials and Gen Z users overwhelmingly value experiences over things, even if this secular trend experienced a temporary reversal during the pandemic. Some of the defining technology companies of our generation, Uber, Airbnb, Tinder, Peloton, have all benefited from this shift, and therefore, what we are looking to do is to apply our horizontal skill set, a deep understanding of business models, of user retention, cohort analysis, unit economics to then identify winners within various vertical segments. You've already seen us expand into leisure and corporate travel and apartment rentals, and you should expect us to continue to evaluate a wide range of new sectors, including digital fitness, pet care, childcare, on-demand quick commerce, and others. I know you've also been, the theme of enablers also fit into the consumer services thinking. How is that? Traditionally, we focused on companies that are building a direct consumer relationship, and what we're now beginning to do is to also leverage our understanding of the pain points that are faced by both marketplaces and by end users to also invest in the so-called enablement layer, as Natalie referred to. If you look at two of our existing investees, Budbee and Bread, they both improve consumer convenience while increasing conversion rates for merchants. The reason this is important is it significantly increases our addressable opportunity set. As just an example, the value of just two enablers alone, Stripe and Shopify, far exceeds the value of all vertical e-commerce businesses in the U.S. and Europe combined. That gives you a sense of how much broader our field of vision now is. Mm-hmm. As a second theme, you talked about product innovation. Give us an example. I think the most powerful shift that we've seen within our own portfolio as well is the shift from 1P inventory-based models to 3P marketplace-led models. We're seeing this underway at both Zalando and at Global Fashion Group. This obviously increases choice for customers by broadening the assortment, but it also makes these companies more asset light and more capital efficient. What it also does is it reinstills technology at being at the core of these companies' DNA, rather than, say, buying or merchandising. There's various other shifts and innovation taking place. To take another example, long-tail marketplaces like eBay, they fail to offer a consistent and standardized user experience, and therefore, they're now being disrupted by so-called full stack marketplaces or managed marketplaces. If you look at a company like Common in U.S. apartment rentals or AUTO1 in German used car sales, which recently went public, these companies are offering a single touch point user experience which minimizes friction, and they're therefore building trusted brands, and they are formalizing fragmented sectors. Another example we can point towards is content platforms themselves becoming transactional marketplaces. The highest profile such example is Instagram Shopping, where you can now close the transaction loop in one tap from within the social app. Nearer home, Vivino is at the very early stages of a similar journey. As you know, less than 2% of app users have so far converted to buyers. I think that actually brings us onto the third theme that you mentioned, doesn't it, around structurally lower acquisition costs, and explain why is that important? The reason we particularly emphasize this is it's the number 1 reason we pass on new investment opportunities, low marketing efficiency. To provide some context here, Facebook's average revenue per user in Europe and North America has increased 10X over the last 8 years. What that means is businesses that we see around us today would no longer scale viably or efficiently in today's CAC environment. Therefore, we are drawn towards models that have sustainably high organic traffic. This typically means having some element of community or a social element, as we see at Vivino and at HungryPanda, and this creates a more deep, more engaged customer relationship, rather than a more transactional or less frequent one. There are other ways to lower acquisition costs as well. For example, you can build products that end users love, but sell them via corporates. The consumerization of enterprise trend was pioneered by companies like Zoom and Slack, but companies within our own portfolio, like TravelPerk and Pleo, are hoping to follow suit. What we love about this business model is that you combine the stickiness and revenue retention of B2B SaaS with the consumer delight and network effects of a B2C business. Finally, I should point, going back to the point on enablers, that companies like Budbee also benefit from structurally low acquisition costs since they rely on their merchant partners to help acquire end users for them. Thanks. We will actually look into Budbee in just a minute. Before that, thank you so much, Akhil, for joining us, and we look forward. Thank you to the continued journey in consumer services. Thank you. Thanks. Budbee is a company that we first invested in in 2018 in our Nordic venture portfolio, and it has grown massively since then. We had a chat with CEO and founder of Budbee, Fredrik Hamilton. Budbee is a tech company. We are not a logistics company. Budbee's purpose is to make it easier to shop online, and how we do it is that we build digital products that makes it easier for consumers to shop online and make merchants more happy. If I would compare Budbee with another successful company, I would say that we are what Klarna is for payments. What Budbee really differentiates is that we focus on the consumer experience all the time. Our competitors, they are mainly incumbents with a lot of legacy, and they are more focusing on the production to make deliveries efficient from a production perspective, and we focus on the consumer. 2020 was a very challenging year for everyone with the pandemic. Since we are in e-commerce, we were in a quite favorable position. We could see a huge shift from physical retail to online retail. I'm very proud that we launched three great products last year. One, we launched our first consumer app for App Store and Android. Secondly, we launched a fantastic feature, which is a product search. What we do there is that you can search for any product in the world, and then we will show the consumer where they can buy it from a Budbee specific merchant and get it delivered with Budbee. Thirdly, we also launched our first subscription program called Budbee Plus that we have high ambitions for in the future. We are still very early in our journey. We prioritize long-term growth over short-term profitability, but we are already today profitable in certain markets, which we see as a huge milestone for us. Sustainability is something that's extremely important to everyone, and especially the younger generation. We can see that it's an extremely important part of the buying decision from consumers. We want to be seen as a pioneer. We are a pioneer. We have launched so many great green initiatives. We have just started there. We're going to release many more in this year. In 2020, we grew our revenue with 175%. On a run rate basis, 30%-35% of our business comes from international markets, which is a huge proof point that we actually are able to scale outside of Sweden. For 2021, we have started this year with a very good pace. We are actually growing faster this year than we did last year. Our ambition is to triple revenue in 2021. It's still day one on our journey. Now I am joined by Andreas Bernström, who is a senior investment director running our investments in the Nordics. Great to see you, and out of the home office pajamas. Yep, wonderful to be here. Yeah. Thank you very much. Budbee, one of our earliest investments in the Nordic portfolio, what do you see for them going forward? Just watching the film, you're struck by the enthusiasm and the ambition of Fredrik, but this company is young. It's five years old, and it has the opportunity to grow on a multiple of different dimensions. On its own footprint, it's got the ability to grow 10, probably 20x from where it is today. Geographically, it's 35% of revenues are international. You'd expect that to grow over time. They're in five markets. There's no reason why they couldn't penetrate more markets. It'll be interesting to see how they integrate deeper into the merchant to drive average order value and frequency, as Akhil was talking about. Ultimately, they're enabling e-commerce, so their value is very much directly linked towards that. They're launching new products. Budbee Plus, I think, is a viable alternative to Prime, Amazon Prime, for hundreds if not thousands of merchants in Northern Europe. Likewise, a shopping experience where you start by actually describing what kind of experience you want delivery. Last but not least, he talks about other companies focusing on production, but this is a very technology and data-driven business that's already profitable. The opportunities of this business are pretty big. Yeah, I certainly only shop if I can get a Budbee delivery. Great to hear. I think it's now time to leave the consumer services sector and move on to food, which has almost become a sector on its own right in the past three years. Andreas, you will start by giving us your thoughts on what's moving in the sector, but we will start with a short film. It's great to be here to talk about food once again, and it's obviously an area that's been hotly debated in media due to COVID, and also because it's something that everybody can relate to. Food has grown out of consumer services and is now a sector in itself, and the last time we spoke about it was at the last CMD, which is around 18 months ago. This is an opportune moment to give you an update as to where we are. Just glancing backwards, Kolonial was our first investment in the food space. We dipped our toe. At the time, Kolonial was a relatively small tech and consumer-focused business, disrupting incumbents on online groceries in Norway. Today, three years on, this business has delivered against its promise of high growth, consumer excellence, and operational efficiency. I'm not going to steal too much of that thunder because Karl will be speaking to us in a little bit, but from an executions perspective, what they've achieved has been pretty remarkable. Since that investment in Q2 2018, we've got really excited about food. We've spent a lot of time in the area. We've met with about 200 companies from different geographies and different verticals and business models, and we've learned a great deal. We like the space because it's very big. The second-largest part of consumer wallet. It's also very important to everybody, whether you have planetary ambitions or health ambitions, or you just want to save time. Last but not least, it has been relatively slow in its transition online. There are new structural changes, plant-based diets. There's delivery food and meal kits. There's also new moves in infrastructure and technology, whether that be vertical farming or last-mile logistics automation. COVID has turbocharged everything within e-commerce, nothing quite as fast as within food. I wanted to touch upon in a little bit more detail how we at Kinnevik think about our investments, because there is a lot of change and there are a lot of things to think about, there are three specific lenses that we ultimately focus on when we look at investments, that is consumption patterns, health, and sustainability. To give you a little bit more information on those, in terms of consumption, how have things changed? Well, in the U.S., you have approximately 50% of all food is now purchased out of the home. That's in restaurants, it's home delivery, and meal kits. People are looking for experiences. They're looking to save time, and these products are helping them from an economic perspective. Likewise, health, we have almost 40% of the world's population now being overweight. This is a burden to themselves, but also to governments, and you're seeing taxes being installed in numerous markets to try to help that. This is something that we need to think about when we're doing our investments. Likewise, Generation Z, those in their 20s, they are wanting to have two days a week where they're not eating any meat. Yes, for health purposes, but also for the planet. One can understand why. If cattle were a country, it would be the world's third-largest global emitter of gas emissions. Hence, that is something that we need to think about when we're doing investments. How does this fit into our portfolio? If we look at our most recent investments, the last three, HungryPanda, Simple Feast, and Vivino, they sit squarely within this. Simple Feast is a vegan-vegetarian meal kit, locally sourced, delivered to your door, and ready to eat within 10 minutes. You can eat in Denmark, Sweden, and California. HungryPanda is a specialized vertical online ordering platform for Chinese people living abroad, giving them localized support for UX and also payment options. Last but not least, Vivino. 50 million wine lovers, comparing notes, giving data and information, allowing that platform to provide personalized offerings tailored to every single person's needs. Unprecedented change means unprecedented opportunities. To date, we've made investments in the Nordics, we've made investments in the U.K. You should expect to see investments farther afield, like the U.S., coming up. Thank you very much. Kolonial is the leading pure-play online grocer in Norway. Founded in 2013 by entrepreneurs who set out to create Norway's best shopping experience for groceries, Kolonial is making everyday life freer and easier for their customers. Their goal is to create the world's most efficient retail system, which brings together a world-class logistics solution and customer experience, saving society tons of food waste each year. Kolonial is one of the fastest-growing startups in the Nordics and has gained a new sense of purpose during COVID-19, as they help protect risk groups and prevent the spread of the virus. Hi, Karl. Now you're with us. We just saw the film about Kolonial.no, and we're really glad to have you join our Capital Markets Day again. Thank you, guys. Happy to be here. Good. Of course, as with Babylon, we have to start with the first question around the past year, which I think has been extraordinary for you. How do you see the consumer behavior changing due to the pandemic that we are going through? Yeah, no, obviously, 2020 was an incredible year for us. Overall, we grew by 124% on B2C. We did experience maxing out over the three-week period in sort of the first lockdown, we were able to double the capacity, stay ahead of the curve from there on. I think on consumer behavior, obviously we've seen some interesting changes. First of all, of course, there was a surge in new customers, as well as an increase in frequency among existing customers. We saw that the average age of the new customers coming in was significantly higher. Normally it's about 42 years on average. The sort of COVID cohorts were around 50 years on average, which basically makes them almost identical to the general demographics in the population. Despite sort of older age groups, we see that retention rates are exactly the same, and that I think is the important learning, that it looks like these new customers behave just as our pre-pandemic customers have, and even after the lockdowns, the patterns were the same. We generally saw sales still being maintained at very high levels, and that's of course, very promising for us. Karl, as a follow-up to that, there's been obviously a lot of discussion around what happens after COVID. Do you think this is something that will taper off or remain? Well, that is, of course, the important question. I think the key thing to remember there is the underlying trend, right? Norway still only has about 2% online penetration even now. The U.K. is apparently above 13%, I believe. I think if we go 10 years ahead of time and we look back, COVID will just amount to a slight bump on a continuously growing trend line on online market share. That is, for example, also what SARS did in South Korea. I think the customer data supports exactly that view that I mentioned, that COVID simply made more people try e-grocery, and then they discover that it's better quality, more convenient, and actually cheaper than physical stores. On that note, I would like to just add that we just won a quality test now among all grocery stores, online and off, on Norway's largest consumer review show, and then at the same time, we also ended up 1.7% above the discounters in a major price test. Basically, you get better products, better selection, and at the same price as home delivered. I think the markets haven't fully understood that online grocery is fundamentally more efficient and more value-creating, and I think that is what's truly driving the e-grocery shift. It's not actually the pandemic. Great, thank you. In terms of internationalization, I remember in the last CMD there were some questions around this. How are you thinking about internationalization today? I can't say too much, but I can say a few things. We are building warehouses internationally now, and also planning for more capacity. We might have some more news on that in the next months. I think overall, as I mentioned in the last Capital Markets Day, we've had some major operational and tech breakthroughs in the last few years, and that has put us in a good position to capture market share globally, we think, and we believe we can sort of compete on a global level. We've quadrupled our tech capacity in the last two years to strengthen that global platform. We're building more sites in Norway now in parallel, and as a reminder, the Norwegian market alone is well above SEK 20 billion, bigger than the global market for streaming music. The market in Western Europe and North America is about $3 trillion. From sort of a macro perspective, it's still completely open. This is very nascent, very low penetration in almost all areas. Yeah, it's a great blue ocean to enter. Excellent. The last question from me. One of the things that impressed me and the team very early on was how you thought about differentiation from competition, and actually, in fact, how you executed against your plan. How do you see yourselves comparatively to call the digital disruptors, but also the incumbents? That's a very nice question to answer. To get straight to the point, as far as we can see, we have the most efficient warehouse operation in the world. Picking the groceries can typically be up to 70% of the cost in the e-grocery value chain. Obviously, being efficient on fulfillment makes a huge difference. We are today around twice as efficient as most other pure players and about three times more efficient than average store picking. Compared to the one to beat, which has been Ocado, as we mentioned the last Capital Markets Day, we had passed them on OpEx. We have now widened that gap. We are substantially more efficient than Ocado. The difference is that we have achieved this with automation, but at a fraction of the CapEx costs, compared to these sort of standard goods demand models. That, I think, is what really sets us apart. Of course, this creates fantastic unit economics, even if you price yourself at discount level. On the market side, we've beaten out some well-funded startups and large incumbents. We currently have above 70% market share in e-groceries. The underlying point there between both sort of the customer side and the operational side results, is that they are dependent on, one, owning and developing all technology end-to-end, and two, to have an extreme focus on operational excellence. Those two things are key, that is where we are different. Great. Thank you very much, Karl. I know many in the audience want to hear about your fantastic productivity. Okay. Sorry, you're back. I have a question from the audience on your fantastic productivity, and would you consider selling that to Mathem, for instance, your warehouse solutions, given that it's the same main owner? Yeah, exactly. That's a very sensitive question. I would say that in general, so we, of course, talked to Mathem, and you are invested in both. In general, though, it is a good question. If you have these results, why not go the route of Ocado, right, and kind of package it and sell it. Yeah sort of Software as a Service or hardware solutions. We've made a very conscious decision not to do that. The reason is that it's not just the technology. It's not like you can take this blueprint and then automatically achieve these results. It's how you work within that system, how you improve it, what your culture is, how you run this operationally, and we believe more in taking this advantage we have and leveraging it through expansion. That is why we are doing international expansion that we do, and we're more worried that if we try to change the company into being a sort of technology provider, that is a very different company from what we are. We are an online grocery company through and through that happens to sort of own all technology and develop that in-house. To put it sort of simply, I think we focus more on trying to follow sort of the Amazon route than the Ocado route. Okay. Very clear, Karl. Thank you so much for joining us. Thank you. Thank you, Karl. Thanks, Karl. Andreas, sort of following on to that question, our broader food portfolio, what should we expect? To date, we have six companies. We've invested about SEK 300 million worth of capital, they are relatively new. The opportunity to grow within that portfolio is enormous. Just looking at some of the companies that we've discussed, HungryPanda is developing a platform into an audience that is, at the moment, relatively under-penetrated, they also have an opportunity to sell other verticals and services there. Vivino is disrupting a SEK 300 billion market, as Akhil said, around 2% of users are today purchasing wine. There's a lot to do in the existing portfolio, we meet somewhere in the region of 10 businesses on a monthly basis, we'll continue to do that. We'll continue to optimize and refine that pipeline to find the best businesses possible that are following the tailwinds that we discussed. You should expect to see one to two investments in the food space from Kinnevik in the years to come. Looking forward to that. Thank you much. Thanks, Andreas. I think we are soon wrapping up, so I will invite Georgi back to the stage to give some final remarks. Thank you, Torun. Listening to this soon two-hour Capital Markets Day, I have a few reflections, of course. The first one is that if we zoom out a bit and relate to what we said in 2019, I hope that it's clearer now that we actually delivered what we said we would, and that we have enough proof points in our portfolio and confidence that we can actually start 2021 from a position of strength across our portfolio. I'm also happy that we were able to share more information from some of our portfolio companies and team members. Thirdly, I think I knew that we were bold investors. Now I know that we are bold Capital Markets Day hosts as well because we did this event live. Torun, I applaud you for putting this together today. It's not easy to connect all the different peoples from around the world into this event live. I'm actually very excited about the future and these two years, they have been fantastic, and I think that the following years will be as interesting, exciting as well. One maybe last remark on that. I think Erika laid out it very clear that we will, of course, expect sometime a market correction. That will happen. It's not a question of if, but rather when. We are again today in a situation where we have a strong financial position. We have a net cash over SEK 4 billion, and we also have a strong stabilizer in the portfolio in terms of Tele2, right? In a market correction, I would say that we are rather buyers than sellers. Of course, that is also something that we can say with confidence given our portfolio, and that is that a value creation has come very well distributed in that portfolio. With that said, Torun, I think it sums up the day. It certainly does. Thank you everyone so much for joining. If you have follow-up questions, I hope you know where to find us. Again, thanks for joining us on this digital event. Have a nice evening.