Kinnevik shifts investments to high-growth start-ups
Europe’s largest listed tech investor is returning $2bn Millicom stake to investors
Europe’s largest listed technology investor Kinnevik is offloading some of its stock market holdings to invest more in privately-held start-ups.
The Swedish group said on Tuesday that it would give its entire SKr19bn ($2bn) shareholding in emerging market telecoms group Millicom to Kinnevik shareholders, just hours after it sold a sixth of its stake in Europe’s leading online clothes retailer Zalando.
Kinnevik said it would also stop paying ordinary dividends, preferring instead to channel money from its listed Swedish telecoms group Tele2 into what it terms “challenger” start-ups in healthcare, financial services, and food and fashion.
Georgi Ganev, Kinnevik’s chief executive, said he understood the decision to stop paying regular dividends might upset some shareholders, but added that it helped clarify the group’s focus on backing “tomorrow’s winners”.
He rejected a comparison to SoftBank’s Vision Fund, which has taken big bets on private companies such as Uber and WeWork, arguing that Kinnevik was different to SoftBank and to private venture capital firms.
“For our shareholders, we offer that unique exposure to unlisted growth companies but yet with liquidity and transparent corporate governance. We are the must-own public stock if you want to have access to these growth companies,” he said.
Kinnevik is starting its third big transformation of the past four decades. It revolutionised the Swedish telecoms industry in the 1980s by using the cash flow from its paper and pulp assets to build up Tele2 as a rival to the state monopoly.
In the 2000s, it sold out of paper and pulp altogether and invested in new, digital companies such as Zalando, Germany’s contentious Rocket Internet and Russia’s Avito. It now wants to use the cash flow from Tele2 to expand into more start-ups.
Cristina Stenbeck, daughter of Tele2 founder Jan Stenbeck and granddaughter of Kinnevik founder Hugo Stenbeck, stepped down from Kinnevik’s board this year to spend more time seeking out investments and talking to start-up founders. The Swedish group has recently invested in VillageMD and Babylon, two healthcare start-ups.
Mr Ganev said Kinnevik had no intention of selling further shares in Zalando, where it remains the largest shareholder after selling a €558m stake on Monday. He added that the group would pay out special dividends when it generated excess capital from its investments. Kinnevik’s shares fell 3 per cent on the news.
Mr Ganev said: “We have an ambition to increase our exposure to unlisted assets . . . because we know it’s of value when we can find these companies that are not available to investors.”