Thank you for tuning in to Kinnevik's Capital Markets Update this afternoon. My name is Torun Litzén, and I head up corporate communications at Kinnevik. We have a program in front of us where we will listen to our CEO to give us a strategic update. We will hear from our incoming CFO, Samuel Sjöström, on the financial framework, and we will then go on to the investment side by presentations of our two senior investment directors, Andreas Bernström and Natalie Tydeman. We are sending live from Stockholm today, and as you can also see in the program, you have two opportunities to pose questions. Now in order to facilitate logistics, please try and send through your questions during the presentation. You can do so by clicking in your browser, and we will then make sure to try and answer as many of them as possible during the program.
Now, I have Kinnevik's CEO, Georgi Ganev, lined up here next to me to start the program. Before we do so, let's look at a short film on our transformation for the past five years.
At Kinnevik, we drive transformation. Since 1936, Kinnevik has undergone a number of evolutionary steps, from agriculture and forestry, to steel manufacturing, to media and telecom, to digital businesses. In the last five years, Kinnevik has been on yet another transformational journey, and we now offer investors access to some of the most exciting, fast-growing private tech companies in the world. Since 2017, we have gone from a portfolio dominated by large, established, listed assets to a portfolio where younger high-growth, predominantly unlisted businesses make up the majority of the value. This transformation has been made possible by disciplined and dynamic reallocation of capital, where we have fully or partially exited some businesses and use the proceeds to invest in new exciting opportunities.
The reallocation of capital and strong performance of our portfolio companies have resulted in a more balanced portfolio in terms of concentration, time to maturity, and sector exposure. Through this transformation, the growth profile of our portfolio is also radically different. Our permanent capital allows us to back companies from its early days to an IPO and beyond. During these five years, we have seen some of the companies that we invested in back in 2018 develop into true category winners that we look forward to continue supporting in the future. The strong and determined execution of our strategy has been enabled by our experienced and diverse team. I'm immensely proud of what we have accomplished through the ups and the downs. While the last five years have been a fantastic journey for Kinnevik, I'm confident that the best is yet to come.
Hi, everyone, and welcome to Kinnevik's Capital Markets Update 2022. The film you just saw showed some of the key achievements over the last five years. It also illustrated the transformational journey we have been on as a company, which has led us to where we are now. Today's session is focused on the future and Kinnevik's unique ability to continue winning. We're hosting this event with a quite remarkable backdrop, heading into what may very well be a deep recession in our market. Clearly, we are feeling the cascade effects, the combination of weak economic markets, a tougher fundraising environment, and unpredictable consumer demand for digital services is putting pressure on growth companies in the tech space, including ours. This has very little impact on our conviction in our strategy and in the long-term power of technology.
We remain firmly committed to building transformative digital companies that makes people's lives better and believe this will create long-term shareholder value considerably than betting against these forces. It will, however, accelerate an overdue distinction between great companies, good companies, unproven companies, and failing companies. We will have our share of each type of company, but believe we have been disciplined in our capital allocation and will come out of this with superior returns just as we did when we went into it. Also, crisis create opportunities. At Kinnevik, we take comfort in the fact that we have a strong balance sheet and a permanent capital base that allows us to take a more long-term view than most other investors. Permanent capital has many benefits in this environment.
We can deploy as much and as little capital as we want, all depending on the attractiveness of the opportunity. We are unrestricted as to proportions between new and follow-on investments, as well as stages of company maturity. We can take a longer term horizon and are not bound by typical fund structure cycles. We can support consolidation without the requirement for liquidity, and we can continuously evolve our investment strategies and themes. With our strong balance sheet, we can support and guide our strongest companies through the downturn and still have ample firepower to seize opportunities that will arise. We can sustain our momentum over the coming 18-24 months without entering net debt territory.
Many of our largest and most important investments took advantage of the more favorable market conditions of the past to extend the runways, and this makes many of them less vulnerable to the medium-term fundraising market. Notably, several of our companies are already funded to break even before adjusting their business plans to an even more difficult funding environment. What also helps us absorb the impact of deteriorating market conditions are the strides we have made in building a portfolio of companies that is balanced across the typical business S-curve in terms of growth and time to cash flow profitability. This is because we have allocated capital in an equally structured and disciplined manner, and I will get back to this in just a minute.
Now, I would like to look past the current market environment and talk about what makes Kinnevik unique, including our strategy, our investment focus, and why we feel we are well-placed to create long-term value. In short, what we do and why we'll continue to win. First and foremost, I want to remind you of Kinnevik's overall ambition to be Europe's leading listed growth investor. Our strategy remains intact. We invest in digital companies that address vital everyday needs. We make full use of the breadth of our investable universe and our patient capital to be a bold, stage-agnostic, long-term partner and trusted advisor to our talented and passionate founders. We focus on broad themes in which disruptive technologies provide the opportunity to significantly upend the landscape. Similarly, we look to deploy capital to regions that nurture innovation, and for us, that means Europe and the U.S.
Finally, we use our strong track record and deep expertise to support our companies in building long-term, sustainable, transformative, and successful businesses that makes people lives better. Looking a bit closer now into the themes underpinning our investments. We look for fast-growing businesses that leverage disruptive technology to create new markets or redefine existing ones wherever they are. On this slide, you will find the composition of our portfolio value based on the company's business models. As you can see, healthcare represent the largest share of our growth portfolio, and as you will recall, this sector has driven a substantial part of our growth in the past five years. Today, it makes up 25% of our total portfolio value, compared to less than 1% five years ago.
In the last years, we have moved from virtual care to investing more into value-based models such as VillageMD and Cityblock, and more recently in companies like Quit Genius and Spring Health. They offer focused care solutions for the employer market with a very strong growth and margins trajectory. Similarly, Babylon is becoming a virtual-first value-based care provider focused on the U.S. We at Kinnevik continue to believe there's a massive opportunity for new technology and innovation to improve access to and quality of care for people globally. In addition, there are several themes hidden beneath these various business models. One example of that is the future of work theme with Job&Talent, SafetyWing, and Omnipresent, which spans across the platforms and marketplaces, the software, and the early bets buckets. Natalie will expand on this theme later on in the program.
The strategy we set out is what guides us towards achieving our vision of being Europe's leading listed growth investor. There are four reasons to believe in Kinnevik and the effectiveness of our strategy in creating superior shareholder value. Firstly, our entrepreneurial team has hands-on operational expertise in navigating complex business environments and operated challenger businesses through periods of significant change, digitization of business models, and milestone moments such as mergers, acquisitions, and exits. Our operating model allows our sector experts to spend significant time with the team at our companies as active partners. Secondly, we have a strong track record of building successful businesses over the long term. At Kinnevik, we have always focused on finding the next generation of winning businesses and working closely with them over 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. Thirdly, our deeply embedded sustainability principles sets us apart from other investors and will bring the greatest returns 30 years from now. We believe that to be a long-term successful company, you need to contribute to making the world a better place. Integrating sustainability into companies' core business models and value creation proposition will bring the greatest returns for shareholders over the long term. Importantly, we want to support the digital businesses of tomorrow to create a more sustainable and resilient future because we simply believe this will give us a commercial advantage. We lead by example, setting bold targets for ourselves.
Finally, the fourth and final pillar is our uniqueness as a public company. Kinnevik offers a rare opportunity for retail and institutional investors to gain access and exposure to the world's most exciting, fast-growing tech-enabled private companies. Investors can choose to enter or to exit our stock at any time at market value. Our team, our network, our financial flexibility, our sustainability focus, and strong track record are the fundamentals that enable us to maintain a strong pipeline of exciting investment opportunities. Kinnevik Group. In September this year, founders and the CEOs of our portfolio companies, as well as representatives from the wider Kinnevik ecosystem, to Stockholm for the annual Kinnevik Summit. It was a truly inspiring event where people could learn from each other, share ideas and knowledge, and build lasting relationships.
Here's a short film from that event to give you some sense of this great community.
I think a great founder is optimistic and determined, so they're willing to kinda roll their sleeves up and solve problems in front of them, and then determined that they have a goal and they keep trying until they get there and don't give up along the way.
I think that you have to have tenacity, resilience, and real passion for what you're building that's gonna carry you through the ups and downs.
Being able to be a visionary, lead from the front, to the employees at your business. They've been so supportive of our mission, to Christian joining our board, incredible healthcare investor, the likes of Teladoc, Livongo. Babylon has been really helpful in terms of introductions and strategic insights, and excited for the future ahead with them.
Incredible. Proactive, kind, interested, thoughtful, and true domain owners and domain expertise in wherever they're investing, which in our case is healthcare.
The structural long-termism that's built into Kinnevik, being an old company with a long horizon, makes it a company that can, you know, look decades ahead instead of quarters ahead. It's what you would guess, but it is true, and you notice it in the emotion when you interact with the people there, who are all kind of lovely, confident people.
Great to see their vision. Kinnevik also like their future and what they're investing in as well. Also love to hear a little bit about what they're looking for in the founders.
It was fascinating to hear from Georgi Ganev as a true long-term capital holder, how to have perspective in a really turbulent time, and I thought he did an incredible job of zooming out and thinking about how you drive true innovation and true returns to the market, and I hope that other investors learn from him.
I think Georgi Ganev is a really smart guy. I think that his take on the way certain exponential trends unfolds over decades. I thought that was very insightful.
As you can see on this slide, the longer term returns in our growth portfolio are strong in spite of the significant write-downs in 2022. A lot of the returns in 2018 and 2019 have already been realized and are as such not on paper returns. The majority of the companies we invested in 3-5 years ago are at money multiples of 4x-7x. Again, despite the tough market conditions as of late. In addition, we believe our entry leverage and leverage today and over the coming quarters provide great potential for strong returns also going forward. As you saw from the film at the beginning, in recent years, we have made strides in evolving the portfolio towards a higher proportion of growth companies.
We have also built a much more balanced portfolio of companies spread across the typical S curve in terms of growth and time to profitability. This speaks to the uniqueness of Kinnevik. We can invest in both private and public businesses, and we can invest earlier and more later stage for the right opportunity. This page shows some illustrative examples from our portfolio of companies on the S curves. To the right, you will find Job&Talent, which we invested in late last year. A relatively mature company that grew revenues by 130% in 2021 while being profitable at an EBITDA level. The company is now fully funded to break even. We're very happy to have the co-founder and co-CEO of Job&Talent, Juan Urdiales, with us today via link. Natalie will speak with him later about the company's growth, their expansion plans, profitability profile, among other.
Just next to Job&Talent, we have Budbee, which is an example of a company that has successfully moved along the S-curve since we invested back in 2018. Andreas is joining us later to update you on Budbee's combination with Instabox, as well as on our broader Nordic strategy. As I mentioned before, one of the advantages of permanent capital is it allows us to constantly evolve our investment strategies and themes. While we continue to focus on our core themes, we are also taking the time to explore new and adjacent areas, and one which is relatively new to us is that of combating climate change, the challenge of our generation. Kinnevik has spent a considerable amount of time and resources in this space over the last two years analyzing the key drivers and the most interesting investment opportunities.
As you know, reaching the 1.5-degree target stipulated in the Paris Agreement will require massive investments in innovation across all industries globally. With Kinnevik's permanent capital, our history of disruption and long-term business building, we are an ideal partner to back companies with the potential to create significant value by combating climate change. Today, we announce two new investments in this space, Solugen and H2 Green Steel. Natalie will talk more about this later. We will also be joined by Solugen's founders, Gaurab Chakrabarti and Sean Hunt. Now, going forward, we have three clear priorities. The first is maintaining our investment momentum of around SEK 5 billion per year, and slightly more than that this year.
To create value for our shareholders, we need to keep up identifying the best opportunities, making full use of our permanent capital to back visionary founders and build for the long term, and this requires us to maintain a strong balance sheet. The second is ensuring we remain disciplined in our capital allocation and maintain a high and absolute bar for what constitutes a great investment irrespective of market environment. The third is to make sure we seize the opportunities of this downturn. Never waste a good crisis. We have an exceptionally experienced team network. We need to leverage all of these to make sure Kinnevik and our portfolio companies emerge stronger out of this downturn. With that, I would like to hand over to our incoming Chief Financial Officer, Samuel Sjöström. He will talk to you about our valuation framework and our financial position.
Thank you so much for listening and joining us so far.
Thank you for that introduction, Georgi, and good afternoon, everyone. I plan to spend around 15 minutes covering the three integral parts of our finances, how we think about them in the current market environment, and how they fit into our permanent capital model. It should not come as a surprise that these are firstly the valuations of our private investments, but allowing ourselves to take a step back from the quarter-on-quarter earnings perspective we spent this morning's call on. Secondly, our view on our capital structure, and then lastly, our capital allocation plans. Starting off on valuations then. Now one of the things that sets Kinnevik apart from many other growth investors is that we're a publicly listed company investing out of our own balance sheet. Our equity capital is liquid and it's permanent, meaning we're not bound by any exit horizons.
Rather, we can hold on to our investments for as long as we believe that they will generate strong returns to our shareholders. Sorry. Now for a fund investor enjoying the shade of private markets and that ultimately needs to return its capital back to investor, an on-paper NAV is arguably of limited importance. The flip side of our long-term horizon on the other hand, is that we keep our investors posted on what we believe is the true fair value of all our investments on a quarterly basis. For us, that NAV statement is the one paramount metric for measuring our performance. Because again, as a public permanent capital investment company, we offer our investors a luxury not afforded to them in private markets, and that's liquidity.
Now this liquidity allows our shareholders to realize returns that to us at Kinnevik are still just on paper and may very well remain on paper for decades to come. It also gives new investors the ability to invest in a proven set of assets, a proven team, and an established growth investment platform at a timing of their liking. Now to both buyers and sellers, we have an obligation to seek to ensure that they can exit and enter our stock at fair value, and this is why we spend considerable amounts of time and resources on assessing and reporting these numbers to you all. With two-thirds of our portfolio invested in private assets now per Q3, this is a lot more important now than when we started our transformation back in 2018, with just around 13% of our portfolio being private.
In times like these, you hear fund investors increasingly looking and talking about measures like distributions to paid in capital when assessing their fund investments. This points to the difficulties with the forced need for funds to monetize their portfolio. Meanwhile, on the main market, our stock has turned over more than SEK 265 billion since 2018 at an average 6% discount to NAV. We're around 3-4 times our average NAV during that same period. That we believe makes Kinnevik a very different and stronger investment opportunity because we allow investors again to step out and step in at their discretion and optimally at NAV. If that is the broader perspective on why, then just shortly on the how. Now I could spend 2 hours on this topic. It wouldn't do miracles for the viewership.
For those particularly interested in this topic, I suggest you instead consult note four in our quarterlies, as well as the deep dive presentation that we provided in connection with our Q1 report earlier this year. In short, our valuations of each of our private investments correspond to what we believe that we would receive in an orderly sale of each investment at arm's length. Nothing more, nothing less. Sometimes we're proven to have been a bit high, sometimes we're pretty much bang on target, and most of the times we tend to be a bit low. While we've radically increased the transparency around how we reach these assessments relative to the start of our transformation in 2018, we're cautious that our private companies are private for a very good reason.
We will never become this rent-a-quote operation, forcing quarterly capitalism on young businesses building for the longer term. What we will focus on instead is continuing to be transparent and elaborate on how we're forming our assessments and ensuring their integrity. Thereby, we're making sure not only that our NAV is fair, but that you all can take a view on where you think it's headed. Now, I can't help myself but to take a few minutes to address a misconception that tends to pop up as it relates to our valuations. It's also a pretty nice segue, if you ask me, into the more interesting topics that Andreas and Natalie will cover later, namely what type of businesses we actually invest in. Now, what I'd like to address is this concept of the average peer. Now this is fiction.
We use, with clear and easily understood data points, in our quarterly report, but the benchmarks we actually use in valuing our businesses is not one smoothed out average. Our benchmarks are a number of individual businesses facing both shared and individual challenges and opportunities with similar or different circumstances and financial profiles, and as is each of our companies. Here you now see a chart with NTM revenue multiples on the y-axis, revenue growth on the x-axis. The gray blob in the middle is the average of around 70 of the largest SaaS companies in the U.S. This average company trades at around 6.5 times revenues and grows by around 25%. Mildly exciting. Now, judging by the scales of the two axes, you might have a sense of where this is headed.
Because here's the same data set when we unpack that fictional average company into its 70 actual constituents. As you can see from the clustering here on this page, multiples tend to correlate quite nicely with growth, and per end of September, growth rates could actually explain almost half of the variance we see here in SaaS multiples. We're still not making good use of the rightmost part of this chart, are we? Here's the same chart with some of our larger software or software-esque businesses plotted in. Now, growth is still the key driver of multiples in our pockets of the market, but the correlation between multiples and cash flow has increased significantly in 2022 relative to 2021. That is also why you typically find our cash consuming software businesses below this trend line.
Now as you can tell, we're not interested in the bottom left, nor are we interested in the average gray blobs of the world. We are about the top right of high quality, high growth, young private businesses. We'd much rather pay 20x revenues for a SaaS business doubling in size year- on- year than one that trades at 6x for a growth rate of 20%. Why is that? Well, for the very long term and have their growth compound over and over again. The fact that a high growth business costs more than a low growth business does not mean that one valuation is more fair than another, nor that they provide the same return opportunity if you're good at picking them. All right, I think that's probably enough about valuations if we want people to stay tuned, let alone awake.
Let's then hop over to our view on our capital structure and deployment. Sorry about that. Balance sheet. We basically have one overarching principle as it relates to our capital structure, and that is to maintain a balance sheet that allows us to support our businesses and sustain our investment momentum. Within the boundaries of optimizing long-term shareholder value creation, this trumps all other considerations, and it's the one north star for our capital structure ambitions. Knowing when in time great investments or exits will materialize is hard, if not impossible. We firmly believe that the value of always being ready and able to pursue attractive opportunities, whatever valued or augmented by maintaining a slimmer and more efficient balance sheet. During 2019, we missed out on a few fantastic opportunities because we lacked the financial muscles.
Back then, we decided to work hard to ensure we did not end up in that situation again. Since then, as you can see from this chart, we've both been increasing the intensity of our capital reallocation and have maintained a net cash position of between 1-2 times our rolling last 12 months worth of capital deployed. For end of Q3, we held a SEK 12.5 billion net cash position. We appreciate that this may seem on the high side of things, at least it did to some a few months back. However, as mentioned, we believe that the value of what we can achieve with this level of financial strength, and may I say peace of mind, in particular during times like these, well exceeds the short-term potential gains of a slimmer balance sheet.
This 12 and a half billion SEK net cash position means that we can uphold the deployment of around SEK 5 billion gross investments a year well into late 2024 before entering net debt territory. On top of that, we have SEK 3 and a half billion in bonds maturing in 2025, 2026, and 2028. To sum up, we're very happy with where we are from a firepower perspective, considering also where we are in the cycle. What about after these next 24 or so months? Well, considering what's unfolded over the last 24 months, a lot will have happened over the next 24. At or around that time, the idea is that we will primarily fund ourselves through rotating our capital. Because while our holding period is uncapped, in practice, it will be finite for a number of our investments.
Now our growth portfolio is still very young. It's been getting younger over the last few years, unlike myself. At the start of 2018, the average tenure in our portfolio when excluding Zalando and all our TMT investments at the time, like Tele2, Millicom, MTG, that tenure was around six years. For end of September this year, that number is closer to three and a half years. Now that poses some challenges on the reallocation of our capital considering our long-term mindset even before markets turn sour. Coming into the current market trough, we'd already started delivering some proof points on the ability of our growth portfolio to finance itself. We'd realized strong returns by releasing more than SEK 8 billion out of investments like Bread, Livongo, VillageMD, and we redeployed that capital into new and existing assets.
In total, these exits actually make up more than 40% of the capital we've invested in our growth portfolio in total since 2016. When the exit market comes back to life eventually, we believe that this flywheel will start moving again. Lastly, how do we intend to use this financial strength in the more medium term? Now, I believe most of you will recall our capital allocation framework that we introduced in 2019 when we went public with our intentions to transform Kinnevik into the growth investment firm we are today. We told you back then that we would invest one-third of our capital into first-round investments and two-thirds into follow-ons.
We told you that we would add around four companies per year to our portfolio and that we would aim to accrete 15%-25% stakes in our best businesses, and over time build a well-distributed portfolio of 30 meaningful companies across sectors and stages of maturity. Now the objective of this framework was to provide clarity and predictability to a quite drastic and transformative change in equity story. In the first two years, our capital allocation largely followed these parameters. Two achievements began to crystallize. Now you heard Georgi talk about the strides we've made in building out a broad, significant, and balanced growth portfolio. I just covered the strength of our financial position, and these two factors are what have instilled the confidence and encouragement for us to slowly but steadily take steps outside this framework.
Looking back then on the last three years and three quarters, what has happened? Well, we have over-allocated slightly into new investments relative to our framework, adding more companies than we perhaps originally set out. We've accumulated an average ownership stake of around 12% in our businesses, and we've continued to evolve our thematic focus, as Andreas and Natalie will touch on shortly. The portfolio balance that Georgi mentioned has also had the effect that 6 companies make up more than 5% of our growth portfolio by value, but these six companies only make up a combined 55%. Drawing and building on this, and having learned a few lessons these last few years, on the right-most side of this page, you have our new and current thinking on our capital allocation.
Going forward, you should expect us to split our capital about 50/50 between new and follow-on investments. You should expect us to add no more than around 8 companies per year, with ebbs and flows depending on the opportunities we find. You should expect us to not focus on evening out our sector exposure, but rather to continue to evolve it. Now we've grown more comfortable with lower ownership stakes, in particular in later stage assets. Going forward, we will focus more on ensuring that we have an adequate level of influence rather than a specific percentage stake. Lastly, you should expect us to continue growing our portfolio in terms of number of companies.
Considering the inevitable power law distribution of that portfolio as it grows and evolves, we expect around maybe 10-20 companies to be more material to our short and medium-term development at any given point in time. Now, these parameters should not be taken as gospel. We will not be piling in capital into underperformers, nor will we pass on a great new investment just to hit these proportions. We believe that these parameters give solid enough guidance as to where we believe we should end up if we continue focusing on pursuing the best opportunities to deploy our shareholders' capital. Okay, so to wrap up, firstly, running a listed permanent capital vehicle obliges us to treat our quarterly evaluations with the utmost respect and provides investors a unique combination of liquidity.
Thank you. Thank you, Samuel, and please join us here in the sofa where we have also Georgi. Maybe when Samuel finds his place, I'll start with you, Georgi. Both you and Samuel talked about climate, and we also amended the capital allocation framework to sort of allow for a larger number of companies in the portfolio. Do you see a risk that the portfolio becomes very scattered and too distributed and even maybe harder to follow?
I mean, first of all, I think we're coming from a situation where we had a greater portfolio concentration. Today, we are quite proud of the portfolio we have, which is balanced and broader. We also have plenty of capital. We have broadened our investment team with our expertise within different sectors, and we have a good inflow opportunity. For us, it's natural to kind of evolve our existing sectors but also exploring new and adjacent areas.
Even though we would kind of broaden our investment portfolio and profile, I would like to go back to what Samuel said, that even though we might have more companies in the portfolio, there will be 10 to maybe 20 where we spend a lot of time and companies where the significant value matters at large for Kinnevik.
We had a follow-on question also on the capital framework and how that will impact our return target.
If you see that going up with a new framework, or how does that link into that?
Right. It's not necessarily the new framework that's gonna drive that. It's the execution of it, sorry. If you look at our portfolio for Q3, I think the growth portfolio makes up around 60% of our NAV. In that vector of the portfolio, we're looking to be delivering very competitive returns relative to our VC and growth investor competitors. That puts us in sort of north of the 25%+ sort of level in terms of IRR over a cycle, I should say. The remaining 40% is now sitting in Tele2 and in cash, and clearly we have a bit lower return expectations there. What's gonna drive that return target upwards is really the continued evolution of the portfolio.
Continuing to deploy capital in accordance with this new framework, and perhaps most importantly, our companies sort of delivering on their plans, accreting value, and then gaining a larger share of our NAV.
Okay, that brings me on to the next question that we've received, and that's around Tele2. Given that that share of the portfolio is, you know, less and the focus is on growth, what is the role of Tele2? Does it play a role in the Kinnevik portfolio going forward?
I mean, as we said, we have been growing our portfolio of growth companies from a small share of the totality to two-thirds. 66% of our portfolio value sits within fast-growing growth assets. In that picture, I think Tele2 is a nice complement, a stable anchor, if you will, and also a stable dividend player. We are using that capital, recycling it, and investing in new opportunities. I think it fits well in our portfolio.
Samuel, you mentioned that our investment, that we will keep up a fairly high investment momentum. So someone in the audience is asking, how do you see our capital, sort of our capital allocation beyond the SEK 12+ billion we have on our balance sheet now? I mean, what is
You know, it's like the faster that the jobs are fulfilled, more workers come into the platform, so we can serve more workers more rapidly at a higher quality. We're using M&A in a strategic way to boost the demand part of the marketplace, to get more jobs and more employers into the platform faster. We have used M&A as a lever to grow faster in new geographies or to improve our presence in existing geographies in order to bring more jobs, because then that triggers higher satisfaction level from the workers' perspective, which allow us to bring more workers into the platform and improve the flywheel effect. We'll continue to use these levers strategically, in the future as we have a huge potential to continue building and growing the business within the next 5-10 years.
Great. Hopefully, as Georgi said earlier, never waste a good crisis. The crisis may be to our advantage if to others' detriment, may be an opportunity to continue that M&A. Maybe we can move on to the potential crisis and the potential economic downturn. One thing, Juan, that makes you stand out, I guess amongst founders that we meet and founders that we know is that this is. If we do now go into a global economic downturn, that will be your third global economic downturn as an entrepreneur. You've learned obviously from the previous downturns. Would love to know what are the key lessons you've taken away? How do you think that strengthened you as a founder, and how are you now preparing for what may lie ahead?
I would say, like three principles here. It's like the first one is reacting very rapidly and killing the threat. It's like on a potential global recession, there will be many threats for any company, and Job&Talent will have some threats. I have always reacted very rapidly to try to somehow mitigate those threats that can actually put the company in danger. Cash is the biggest threat. A lot of measures have been taken around cash to be well prepared to any type of a scenario next year. Second one is about mitigating the risks and improving actually the efficiency of the company. You know, like, crises are always good to improve efficiency of the company, and that's a big learning from the previous ones.
I think that we have put in place some measures in Job&Talent that will actually be measures that remain for the long term, which will mean that we'll be a better company, actually, after this crisis. The third one is about communicating and making an effort to keep communicating to the team, the big picture. Because the team can suffer in these type of situations, you know, where they see that we can slow hiring or we can take some drastic decisions of stopping some expansions. You need to show them the big picture. You need to show that with these measures, we'll pass next year in a quite healthy situation, and that will give Job&Talent the tremendous opportunity to be one of the winners of this crisis after that, you know.
It's proven that the top companies actually in the world are those ones who survived actually the 2000 crisis of the tech bubble, and every single crisis is an opportunity for newcomers. It's important to reinforce that message internally to make everyone make a huge effort during this period, you know, and to keep the motivation up so everyone can see this as an opportunity.
Great. That touches a bit on culture, and that's one of the things that also really excited us when we were first getting to know you and Felipe and the rest of the company. You talked a bit about the need for communication and the big picture would highlight that's important for you about culture that you think is helping to drive the success.
I think that we define ourselves as a culture as, diverse and global team pursuing a mission with very clear operating principles. For us, taking all of this into consideration is critical in our day-to-day. When we hire, when we do performance reviews, we take this into consideration with very strict KPIs. KPIs around actually even around our operating principles. It's like we hire people that is entrepreneurial, hands-on, analytical, communicative, and bootstrapper. We actually hire, you know, considering this, and we do the performance reviews on the people to see if they have actually operated in this way. Because we want to actually understand our culture as something that we could measure. It's not only that we say that we are like this, we measure that.
It's something that we have been doing for the last 4, 5 years, especially when we became a big team. It has proven to be very successful to actually operate the business in all the countries in the same way and with the same culture.
Great. Juan, you've been asked by many people on the Kinnevik team throughout the diligence process and throughout your time as part of our portfolio about your vision. I could ask you about your vision for the next 3-5 years, but actually what we love to hear about at Kinnevik is your vision for the next 10 years. If you could give me one sentence on your vision for where Job&Talent can be over that kind of timeframe.
Yes. We want to become the largest employer of the world, showing that things can be done much better, and with a worker-centric focus. You know, it's like I'm becoming actually the image of the United Nations sustainable goal of decent work and economic growth, actually. When people in ten years' time think about decent work, we love the people to think about Job&Talent. You know, it's like that's a big vision that we have as a company. In terms of size and future and corporate wise, it's like we want to remain as an independent company. When we think about our opportunity and market, it's like we can still grow 50 times more in the existing markets where we operate. We're still small, actually. We have a lot of opportunity in front of us.
We have multiplied the business by five in the last 24 months. We want to keep the same trajectory in the next 3-5 months, and that will put us in a privileged position to achieve our long-term mission.
Fantastic, Juan. Very inspiring. Thank you so much for joining us today. I think now we will say goodbye, and I'll hand back to Torun. Thank you, Juan.
Thank you very much.
Thank you, Juan, and thank you, Natalie. What an inspiring vision. I think you've heard both Georgi Ganev and Andreas Bernström talk about climate investments, and those of you who followed our report this morning saw that we have announced two new investments in the area today, Solugen and H2 Green Steel. Driving and doing a lot of the work behind the scenes and investments that we have been evaluating, again, has been done by Natalie and her team. We will also speak later to the founders of Solugen, who will be joining us from Houston, Texas. Before we do so, I'd like to hand back over to Natalie, who will take us through exactly where and how and in which areas of climate tech Kinnevik is interested and intends to play a role.
With that, I would like to hand back to you, Natalie.
Thank you, Torun. In contrast to human capital, climate tech is, I would characterize it as a new investment vertical rather than an extension of an existing vertical. It does still build on the expertise and the insights that we've developed through our sustainability work with our portfolio companies over the past several years. We decided to start exploring climate tech as a standalone investment theme about a year ago. At that point, it was already clear, not just to us, I'm not claiming any brilliance here, that multiple technological, societal, regulatory tailwinds were all converging on the sector. First of all, an array of new and cheaper technologies and engineering approaches have really shifted climate tech down the cost curve, and renewable energy is now economically viable.
For example, over the past decade, the unit cost of solar energy has fallen by 85%, wind energy by 55%, and lithium-ion batteries powering EV cars by 85%. Alongside that, consumer demand for sustainability has absolutely skyrocketed. Regulators have been increasingly setting directives and taking action on net zero, providing incentives for decarbonization, but also penalties for emissions, as well as supporting the increasing availability of debt and other non-equity financing for climate tech companies. A couple of examples there would be Europe's Emissions Trading System, the White House's recent Inflation Reduction Act and executive orders. These are prime examples of government initiatives that are supporting or actually mandating investment into clean technologies.
We also now have a very robust corporate demand signal, so more and more corporates have found themselves compelled to commit to net zero targets, and those will only be achieved through the development and deployment of new climate-friendly technologies and the use of renewable energy. Lastly, public market investor demand for ESG assets continues to increase, and that's opening up the path to liquidity for climate tech investments. Now, of course, it goes without saying that these tailwinds that existed already a year ago have been dialed up significantly further as a result of the tragic war in Ukraine, which has starkly highlighted the very urgent need for energy transition. The result of all of this is that decarbonization companies today have a really unique opportunity to disrupt massive industries and thereby to create enormous value for all of their stakeholders.
I know there was a question this morning about why now, why is Kinnevik the right investor and why now for climate tech? I'd highlight a few different points here. First of all, as discussed, the sector tailwinds are clearer than ever, and we genuinely believe that Kinnevik can be one of the foremost investors addressing the opportunities that arise from these. Despite the strong tailwinds, there's currently an undersupply of capital for climate tech. The IPCC, for example, highlights that investments in emissions reduction is currently 3-6 times lower than is required if we want to limit global warming to below two degrees. There's a particular need and an undersupply of the type of long-term capital that Kinnevik is able to provide.
Many of the most transformative companies and technologies in climate tech will require very long investment horizons as a result of lengthy industrial R&D cycles, capital intensity of engineering projects, and longer commercial lead times, given the conservative nature of their end markets. We found in the time that we've been looking at climate tech that our long-term investment horizon and mindset resonates really strongly with the leading climate tech companies, founders, and co-investors. Now, while climate tech is a new vertical, we are leveraging, as I said, our existing expertise. Our existing expertise comes from addressing sustainability and climate change within our portfolio companies. Also our expertise, developed from successfully investing in previous tectonic societal shifts, telecoms, media, internet, e-commerce to name a few. These include both CapEx light and CapEx-heavy industries. We feel comfortable across both.
Another key point is really our heritage in the Nordics, which has established itself as an epicenter for climate initiatives and thought leadership. Lastly, we see that we can leverage our long history of building sustainable businesses in order to assist climate tech founders who, for the large part, come from scientific and engineering backgrounds and may not have built or operated companies at commercial scale before. Based on all of this, we're seeing that we're able to, firstly, access the highest quality deal flow. Secondly, gain very deep insights into those opportunities through the network of advisors we've assembled, in addition to the group of highly accomplished climate tech investors that we benefit from on our board.
We've also found a real value to applying our core people platform to identify the standout founders and managers, and you'll meet two of them in a minute who can build the next generation of iconic companies. Also, to help those founders and management teams scale up their organizations for commercial success. Lastly, we also see the opportunity to leverage our sustainability platform to help our climate tech portfolio companies measure and validate the green credentials of their products and operations. This is absolutely a strategic priority for sales, hiring, and fundraising, and one that we found a surprising amount of demand for from operating companies. In terms of where we're looking, climate tech is a massive space. Where are we going to focus?
First of all, we have taken a decision to prioritize companies that are addressing very large sectors of the economy, where new technologies can address massive volumes of emissions. In this chart, the area of each segment represents the portion of European emissions, but it will not look dissimilar if you apply it to the US, so the portion of European emissions that originate from a particular industry. With the addition of the exciting new investments that we announced this morning, Solugen and H2 Green Steel, together with our existing investments in Agreena and Vay, we are already addressing chemicals, steel, agriculture, and passenger vehicles, four of the most significant emitters, and together representing over a third of total global emissions.
We're at the same time exploring other high emissions industries and starting to develop our thesis in those areas, including cement, power, and residential buildings. Some of the themes that we're focusing on include, decarbonization of heavy industry, which will be achieved through electrification of industrial processes, transition to renewable energy, and the introduction of low emission processes and materials. Secondly, decarbonization of the home, which will be achieved again through electrification, also through energy conservation and efficiency and residential solar installations. Thirdly, we're spending time on low carbon mobility, achieved through electrification of transportation, car sharing, and alternative fuels. And lastly, carbon capture utilization and storage. Technologies which enable us to remove and durably or permanently sequester carbon that already exists in the atmosphere, widely accepted to be an essential component of any net zero strategy.
Within those sectors and within those themes, we're focusing on companies with a specific set of characteristics that we believe will enable us to generate growth equity returns in line with other investments in our portfolio. Firstly, as already highlighted, looking for companies which are addressing trillion-dollar markets with high contributions to global emissions. Secondly, we've decided to focus on companies that have the potential for high impact on the most urgent needs for the 2025 to 2030 targets. Many of you will have read that the IPCC recently flagged that the 1.5-degree target is fast receding. To reach it, emissions need to peak by 2025 at the latest, and they need to be cut by 43% by 2030.
The reality is that we're on track for those emissions to rise by 14%, not decline at all. We believe that the relatively few companies that are able to have a material impact on the 2025- 2030 challenges will become highly valuable. Companies that are able to impact targets within that timeframe are typically going to be deploying technology that's been proven at least at pilot stage and will have a clear path to commercialization. We're looking also for companies that have or are building strong moats through, for example, tech, IT, network effects, and first-mover advantage down cost curves.
Most importantly, as with all of our businesses and all of our sectors, we're looking for unique founders and management teams who are able to combine industrial math discipline with scale-up DNA. Can thereby build high growth, innovative businesses in legacy industries. What's our ambition in climate tech? Well, we believe that climate tech investments can have a massively positive financial as well as environmental impact over the longer term. That's the starting point of our approach to this space. We want to be meaningful in this sector, while at the same time being very thoughtful and very careful in the way that we diligence and select the opportunities that we believe can deliver growth equity returns in line with our other sectors.
Ultimately, we have an ambition to build a reputation and a track record in climate tech as strong as the one that we have in healthcare. Over the past 12 months, since deciding to pursue climate tech as a standalone investment vector, we've been very busy digging into these trends, understanding the industries, the broader ecosystem, and mapping out the best companies that are around. We've reviewed over 80 climate tech businesses in that period, of which 40 in-depth. We've taken 10 to investment committee and, as of the announcement today, we've invested in four. Starting with our investment in Vay. In Q4 last year, we invested over SEK 200 million to address low carbon mobility through car sharing and electrification of transportation.
We invested, as you heard from Andreas, we invested SEK 127 million in Agreena in Q1 this year, addressing regenerative agriculture and nature-based carbon capture and storage. In the past quarter, we invested over SEK 500 million in Solugen, addressing decarbonization of the chemicals industry, and we will hear from Gaurab and Sean shortly. We announced this morning that we will be investing SEK 274 million in H2 Green Steel in Q4, addressing decarbonization of the steel industry. Let's come on to Solugen. We invested $50 million, as a co-lead of the latest fundraise. Solugen is a Texas-based green chemicals company, disrupting the $6 trillion chemicals industry, which is responsible for 6% of global CO2 emissions.
What we really loved about Solugen, apart from the founders, is that it's a company that demonstrates innovation in a number of different areas. It's demonstrating innovation in chemistry, innovation in engineering, and innovation in go-to-market. The Solugen approach develops or produces high-quality chemicals from sugar instead of petroleum feedstocks at lower temperatures with higher yields and less waste. That means overall lower cost. That production is done in smaller, more modular, more flexible plants with lower CapEx and lower running costs. We are super excited about Solugen's promise to produce better, greener and cheaper chemicals, not relying on any green premium, but really on providing a product that better meets its customer needs.
Following this round, Solugen will have almost three years of runway and a cap table consisting of the foremost and deepest-pocketed investors in the climate tech space. We're gonna come on in a minute to talk to the founders of Solugen, Gaurab and Sean, who are dialing in from Houston, Texas, at a very early time for them. First of all, we'd like to play a short video introducing Solugen.
How do you reverse climate change? That's really the only thing that we care about at Solugen. How do we stop this? We wanna be the company that decarbonizes not just the chemicals industry, but multiple industries. We're starting in chemicals 'cause the impact is big, but there's no reason why it can't decarbonize industry completely.
What is a chemical plant? Essentially, it's a black box. A feedstock goes in and a product comes out, and the sole objective of the chemicals industry is how do I get to perfect conversion? Out of this one pound of feedstock, how do I get one pound of product? Well, no one can do just feedstock to product. Instead, you end up with a whole bunch of side products. They end up in wastewater and air emissions, things like nitrogen oxides, which have over 100 times the global warming potential of carbon dioxide. The true magic of Solugen is we can convert a feedstock directly to a product, no air or wastewater emissions.
We didn't even think about starting a business initially. We just wanted this technology to exist. We felt it was our duty that if we saw an opportunity to change the industry, we had to do it.
Today, Solugen is a specialty chemicals manufacturer of carbon negative chemistries, and the Bioforge is the world's first carbon negative chemical plant. It makes the molecules, and then we blend those molecules together to make products that we sell into agriculture, concrete, energy and industrial water treatment. There's zero discharge.
It was a bet-the-company decision, and it worked. We've cracked open almost an infinite possibility of chemicals that we can go after. Now what we wanna do is just build as many of these as we can, and the beauty of it is that we're executing really fast, and that's why Solugen is on the trajectory it's on.
Welcome. Welcome, Gaurab and Sean. Thank you for joining us this morning. Let me start, as I did with Juan, by asking you to go back to the beginning and tell us about what your vision and ambition was when you set out to found Solugen, what the challenge was that you were trying to solve?
To pay rent. No, I'm kidding. The reality of what we were trying to do was much bigger than paying rent. Fundamentally, as you saw in the video, we exist to reverse climate change. That's fundamentally the only reason we wake up every morning, but that's a tall order. What we realized was the chemicals industry by itself was responsible for 30% of the industrial greenhouse gas emissions that you see in the world. We had this question that, well, what if we can. Instead of making that 30% into zero, what if we can make that zero into a negative? What if we can use our unique technical backgrounds to create processes that actually remove carbon emissions or avoid significant carbon emissions that go into the environment?
The way we did that, and we didn't plan on doing this, we realized the solution for that was to decentralize the industry. Today, when you look at a petrochemical plant or any chemical plant. I grew up in Houston. My backyard was literally a petrochemical plant. It's the size of an island, right? The size of an island, and you're shipping product thousands of miles to a customer. The fundamental insight that we had, yes, there was the core technology of marrying biotechnology and chemical engineering, but it was more of a market insight that we had, that if we decentralized our production, if we made a smaller chemical plant and we're closer to the customer, we can actually drop the emissions significantly, not just from the production side, but also from the distribution of the chemical itself.
This is what we call the Bioforge. It's not a dream, it's not a pipe dream. It's here today. We have a facility in Houston. We have another facility in West Texas, and we're actually putting up a new facility in Minnesota that we'll announce soon. The idea is that no longer an idea. It is here today, and I think we have a reasonable path to going after the chemicals market.
Great. You've touched there a bit on the chemical and engineering approaches. Anything else that you would highlight for the audience on those?
Yeah. Sean Hunt, co-founder of Solugen. It's a real privilege to have the opportunity to design and build a chemical plant, which we call Bioforge One, and it really leverages a whole bunch of technologies that are coming together sort of at this moment in time that can be leveraged to decarbonize the industry. I mentioned in that video that you know, the chemicals industry looks complex outwardly, but if you really kind of take this 30,000-foot view, think of it as a black box. You have a feedstock going in and you have a product coming out. The ultimate goal of a chemical engineer like myself is to convert a pound of feedstock to a pound of product. Chemical engineers like myself, we're actually really bad at doing this.
It's really, really challenging to get that unitary yield. What the industry has had for, you know, the past 100 years is really two options. You have fermentation and you have petrochemistry. They're two very different approaches. Fermentation uses living cells in a vat. Petrochemistry uses high temperatures and pressures. You're kinda smashing molecules with a hammer, so to speak. But they actually result in the same problem. You end up creating what I call alphabet soup. Instead of a pound of feedstock going to a pound of product, you get a pound of feedstock going to half a pound of product and then half a pound of this alphabet soup. It's that alphabet soup that makes chemicals expensive. It makes them really carbon intensive, and it makes chemical plants really big and really CapEx intensive.
I'd like to say that, you know, Gaurab and I we're combining the best elements of both, right? That we're taking the best elements of fermentation, the best elements of petrochemistry. What I'd like to say is that, you know, we could kinda see this from the beginning, all these sort of knock-on effects, but we really couldn't anticipate it. When you're able to actually approach this unitary yield using enzymes from synthetic biology to do the heavy lifting, to use what are called heterogeneous metal catalysts from petrochemistry to do the final steps, you get all these benefits. You can build a smaller chemical plant. Rather than having 70% break-even uptime, you can have a 30% break-even uptime. All of this is encapsulated within our first commercial plant, which we call Bioforge One.
It's fully electrified as a chemical plant. We're on 100% wind energy. It operates at room temperature. It's also a zero discharge facility. It has neither air nor wastewater emissions. It's a 10,000-ton per year plant. It actually offsets and sequesters over 30,000 tons per year of carbon dioxide equivalents. What's really neat is that it's multi-product. Most chemical plants are dedicated to making a single molecule. With this approach, we can actually make multiple products using the same capital asset. I would say sort of a final point that I think underpins all of this is the importance of computation, AI, and machine learning.
That's really fundamentally what unlocks all of this, quite frankly, is that these proteins that you find in nature, you can now computationally engineer them to be vastly more superior than what you find in nature, making them perfect and ideal for a chemical plant. Solugen specializes in this, and this compute extends all the way through to how do you automate a chemical plant. How do you make Bioforge One safer and more efficient using AI machine learning? Like, that layer is what really underpins the whole process.
Great. As I mentioned earlier, excited by the innovation that we saw in the chemistry and the engineering, but also, in your approach to go-to-market. Can you tell us a little bit about your target customers and your go-to-market strategy?
Yeah. We play in multiple industries. We make chemicals called organic acids, which don't sound that exciting, but they're really exciting to us because it's a very large market and used in multiple end-use cases. A lot of our products actually go into agriculture. This is used in fertilizer packages to boost the nutrient deliverability of phosphates and nitrates that you commonly see. With the war in the Ukraine and a lot of the supply chain disruptions that we're seeing, that's become a much bigger part of our business because now you need more efficient delivery of the same exact nutrients. The second big market for us is water treatment. When you've got water flowing in pipes, when you've got water anywhere, some things tend to happen.
One, you start getting bacterial buildup, and two, you start getting what's called corrosion, meaning the pipes in your waterways start to break down. Our chemistries can protect pipes from both of those issues. That turns out to be a big deal when you start dealing with millions and billions of gallons of water in industrial water sectors. The third market for us is looking at the construction sector. Specifically, our product goes into concrete. It's used to make concrete more give it a stronger crush strength, which is like a technical word for just strong concrete. It uses less cement in the process, which actually can drop your carbon emissions fairly significantly.
There are a few other markets that we go after, but those are three of the biggest ones in terms of volume movers for us.
Great. Everyone, I know there's gonna be a lot of questions in people's minds about capital intensity and kind of long investment horizons here, but you've done some quite clever things in order to de-risk the upfront investments in the Bioforges. Can you talk a little bit about that?
Yeah. When we think about building a chemical plant, Bioforge One, for instance, which was a huge project for us, given the size of the company at the time. We think about risk really in four buckets. Technical risk, scale-up construction risk, commercial risk, and capital risk. Bioforge One is really an encapsulation of de-risking all four of those areas. From a technical risk perspective, we engineer our proteins and metal catalysts computationally, and then we do high throughput automation in the lab, but it's at a 400 microliter scale. Bioforge One is at a 40,000 liter scale. That's actually a factor of 100 million x. It's very few things that you see sort of like a factor of 100 million x.
Bioforge One coming online, celebrating one year of commercial production, gives us the confidence that we've de-risked technically our ability to engineer novel protein enzyme and metal catalysts to actually put them into a commercial plant. For the second bucket of risk, scale-up, and construction. Scale-up is quite evident, going in five years from essentially an idea to a first commercial plant, but also the novel construction approach that we took. Bioforge One, somewhat of a record. We broke ground in October 2020, and we made our first truckload of product in September 2021. That's 11 months from groundbreaking through construction, commissioning, and startup. That's because we built the plant modularly. It's a safer, more efficient way to build a chemical plant. Because our plants are smaller, we can really leverage it.
Bioforge one was actually built in five locations simultaneously. When we look at the future fleet that we're building, we're actually 3x-ing Bioforge one. These are exact copy and paste of modules that we've already built, that we've already commissioned and optimized. For Bioforge Marshall that Gaurab mentioned we're building in Minnesota, that's only a 2.5x scale-up over the core module size. The third bucket, commercial risk. Having a multi-product asset is really helpful for navigating markets as markets change, for navigating different industries, and also working with our customers to be able to deliver a portfolio of molecules to them. Bioforge one is really seeding these different markets and converting our customers to contracts for base loading the future Bioforge assets that we're building.
For the final bucket, capital risk, that's why we're really excited to partner with Kinnevik. These are capital intensive, but they're also really efficient. These are small plants, they're high IRR, and their payback periods of under three years.
The only thing I'd add there is that when you start looking at how we can go faster, we've discovered that we can take existing infrastructure, existing petrochemical infrastructure, and convert it into Bioforge capacity, which is a very exciting, kind of accelerant that we recently discovered.
Great. Let me jump. I've got just two questions left. If I can jump a little bit into the team and the culture side. We mentioned earlier that we think that there's a very unique founder profile and a very unique team construct that is required to drive success in climate tech businesses. How have you thought about team and culture as you built the organization around the two of you?
Yeah. I would start by saying we shouldn't be here today. I'm a physician scientist that was studying pancreatic cancer. Sean is a chemical engineer at MIT who was gonna go down an academic path. We kind of realized that the marriage of both of our worlds was the right approach to solving some of the problems that we're talking about here today. That ethos permeates throughout Solugen. I would say we've got Nobel Prize-winning scientists in the same room as chemical operators who don't even have high school degrees. What we discover is that overlay of having these multiple different backgrounds creates the most innovative solutions in one of the hardest markets in the world. The way we contextualize it is we have four leadership principles.
I'm gonna be, you know, kind of drinking our own Kool-Aid here for a second, but I think it works. One is building a cohesive leadership team. Creating a culture of safety, essentially, psychological safety, physical safety, emotional safety. Not a lot of chemical companies talk about that layer of safety. The second is having organizational clarity, making it very clear, once we have this cohesive leadership team, what are we solving for this year, next year, and what's the end goal in the next 5- 10 years? So everyone has to be able to answer. I have these six questions that everyone has to be able to answer, from top all the way to the granular detail of what we're focusing on. The third is overcommunicating that clarity.
Continuously talking about what are those things that we're solving for today and for tomorrow. Lastly, reinforcing this clarity through our people processes. This is why Kinnevik has been such a great partner for us, it's a lot of the operational parts of our business. We need to be consistent with that organizational clarity, like our hiring, our promotions, performance management. All of these things need to have the same exact buckets that we talk about from the top.
Thank you, Gaurab. You've led perfectly into my very last question, which I want to get in very quickly before I get cut off. Which is, why was Kinnevik the right investor to co-lead this latest round?
Yeah, I mean, just from the surface level operational support, Kinnevik's the only investor, and we've got some great investors in our cap table, but it's the only investor that I would say our director of HR is excited to talk to. I think that's just a very unique skill set to have. But on top of that, I would say the support of our mission, it's very clear that we're very aligned on what success looks like next year and also in 10 years for us. We're 50 year thinkers, and I think Kinnevik is similarly suited. Focused execution. I think when we talk about, yes, we've got this grand vision, but you need to have these small incremental steps sometimes to ensure that you can get to that bigger goal.
Kinnevik is fully supportive of how we're focused on executing on what's in front of us today. Lastly is the expansion into new geographies and connections into new geographies. We're gonna be a multinational company with multiple Bioforges. What better investor to have than someone who plays in the global context?
Great. Well, look, thank you both. We could talk for hours, but I know that Torun wants us to wrap up. Thank you very much for joining us, and enjoy your days.
Thank you for having us.
Thank you. I think it will be very exciting to follow both Job&Talent and Solugen in our portfolio, and I'm sure we will have the opportunity to get back to them as they progress in our portfolio and in their business development. We do have time for a short Q&A, and I want to make sure that we answer the questions that we have gotten. I'll start with you, Andreas. A question from the audience around a company you did not specifically mention. You did mention Oda and in both Oda and Mathem, the other online grocer, we saw fairly large cuts in the valuation this morning. How has that? I mean, what would be your comment to that, and is there a lack of confidence in these companies in terms of where they're heading?
I think there's two parts to that question that you need to look at, and you need to sort of separate those. One is sort of valuations and the compressed markets that we see today. Clearly, we've had a post-COVID sort of dip. We've had high inflation. We have consumer confidence down at all-time low. We've got war. You're seeing all companies that are working in e-com, actually in SaaS multiples, as well as tech growth stocks. The multiples have come down considerably as we've discussed, somewhere between 50% and 80%. Obviously, in businesses that have high capital needs, that becomes even more compressed. In the case of Oda, you have a business that's actually operating in Norway at or around breakeven. Mathem will be launching its CFC in Q1 of next year.
Part of the answer is in that. What I think is important to think about is the actual long-term conviction of this. When we invested in Mathem and Oda, the penetration online of groceries was about 1.5%. During COVID, it was between 4% and 5%, and probably back down to around 4% now. If you ask all analysts and all predictions, that number will be between 12% and 15% by 2030. That's a fundamentally important part because what you need in these businesses is scale. The second part is operational efficiency, and as I mentioned, Oda has been at or around breakeven.
Proving out that the actual business model works and that it can generate the unit economics needed is incredibly important, and we've already seen that firsthand. We also have to think about the consumers themselves. Convenience and sustainability are gonna be driving this market. In terms of sustainability, you have businesses that can be, on many factors, more efficient than what we're seeing in the retail chains. Our conviction is the same, but we do have to recognize that these are very different markets.
Thank you. A question for you, Natalie. I know that you touched a little bit on it, both in your presentation and in your conversation with Gaurab and Sean. Given the capital, the, I mean, the more capital intensive nature of many of the climate investments, I mean, how do you see us playing in that area with that in mind? Also, does that impact the way you look at what kind of returns we could have in the sector?
Sorry.
As I highlighted, you know, we are very focused on finding opportunities that we believe can deliver growth equity returns, not infrastructure returns. Growth equity returns in line with our other sectors. That means getting in at the right stage. As we said, you know, we're not building a massively diversified portfolio of climate tech opportunities. We will be selective. Therefore, we're looking to get in where things like technology have been de-risked, where there's a clear path to commercialization, but where there's still a lot of opportunity and a lot ahead to go for. We're selecting opportunities with that in mind.
We do anticipate that the companies we invest in are going to need a large amount of capital, and we're therefore also prioritizing companies that are very well-funded, that have very high-quality cap tables. That was one of the things that was so compelling in our investment in Solugen.
Thank you. I'm aware that we are almost running out of time, so I'd like to thank Andreas and Natalie for sharing your insights. As we are almost through with the program, as a last item on the agenda, I'd like to hand back to Georgi, who will give us his final remarks. Back to you, Georgi.
Thank you, Andreas and Natalie, and thank you to our brilliant founders, Juan, Gaurab, and Sean, for joining us today. If there's one message I would like you to take with you from today's presentation, it is this: Our conviction in our strategy and in the long-term power of technology has not changed, and our strong balance sheet and permanent capital structure sets us apart from other growth investors. It enables us to support our strongest companies where we have true conviction through the downturn. It provides us with unrestricted flexibility to deploy our capital, and it also allows us to explore exciting new and adjacent investment themes. In the last five years, Kinnevik has worked hard to build a balanced portfolio in terms of composition, sector exposure, growth profile, and time to maturity.
We have done that, what we said we would do at our Capital Markets Day in 2019, and we have done it faster than anticipated. We've been on this transformational journey which has led us to where we are today. To ensure we continue creating value for our shareholders, as I mentioned at the beginning, we have three clear priorities going forward. The first is keeping up our investment momentum, making full use of our permanent capital and strong balance sheet to back visionary founders across different stages of maturity. The second is making sure we stay disciplined and maintaining a high and absolute bar for what constitutes a great investment irrespective of market environment. The third is to make sure we seize the opportunities of this downturn.
We are in an exceptionally strong position to emerge stronger from this crisis for all the reasons I just mentioned, and we intend to use that to the fullest. Thank you, everyone, for listening today, and I wish you all a great evening.