Good morning, welcome to Kinnevik's first quarter results presentation. I'm Lorenzo Grabau, and I'm here in Stockholm with Joakim Andersson, our Chief Financial Officer, and with Torun Litzén, our Director of Corporate Communications. I hope you all had a chance to see our report. In our report, you will have probably seen that we had a solid start to the year. First, if you turn to page two, our largest operating companies are very much delivering on their plans. Sustained growth in e-commerce, which is obviously crucial to the future of the businesses and our company, and good progress on key metrics in both mobile and media. We'll also come back to that as we go through the companies in more detail.
Second, we have continued executing on our investment management strategy, very much in line with what we have been communicating to you over the last few years. First, we have made two new investments in sectors that we have identified as promising for the future. Betterment, leading U.S.-based digital wealth management, and Babylon, a promising healthcare digital provider. Second, we have increased our ownership interest in our long-term priority companies, most notably Global Fashion Group, at what we believe to be an interesting entry point to increase our ownership position. Third, we have continued reducing the number of investee companies, as we will talk about in more detail later on.
Lastly, we have established a very interesting partnership with Alibaba for the Lazada investment, in such a way that we are de-risking, in a significant manner, our business in Southeast Asia, whilst at the same time, keeping the upside for an additional 12-18 months. In summary, a solid start to the year, but quite interestingly, an important step forward on delivering on our shareholder value creation commitment, which, as you know, is not just about creating NAV growth, but it's turning that NAV into cash and then returning that cash to our shareholders. As you know, we are very focused on attracting and retaining long-term-oriented shareholders who do not trade our stock, shareholders who want to own us for the coming five, 10, 15 years.
To that extent, delivering them cash returns when we have successful exits is a very much crucial part of our strategy. As you know, we're delivering returns in three ways. First, we had a well-timed investment in our own shares, which allowed us to purchase SEK 500 million worth of stock at an average share price of SEK 217. Second, we are increasing our ordinary dividend to SEK 7.75 per share. Lastly, our board is proposing to our general meeting an extraordinary dividend of SEK 18 per share. That is what I call returning capital to shareholders on the back of successful investments. Yes, of course, the capital markets, both public and private, were particularly challenging during the course of the year, and that has led to a 13% reduction in our NAV.
Having said that, the developments that we have witnessed over the last couple of years and our behavior and strategic and tactical decisions very much validate our approach. As you know, starting in early 2014, we decided to focus on the businesses that we owned, and we made no new investments in new companies for a period of two years. Because the last investment was made in Quikr in early 2014, and it was followed by the Betterment investment and Babylon investment in early 2016. During that period of time, we really focused on developing our companies, investing very judiciously in some of them, and of course, focused on reducing the size and complexity of our portfolio, and sold Avito for 16 times our money or nearly $850 million in cash, a cash that we're now delivering to our shareholders.
As a result, we feel that as we look back over the last four months, but also over the last couple of years, we've very much progressed in delivering on the strategy that we've established, and we are now well-positioned for the coming months to continue executing on our plans. As you can see on page two, we have a very good position to start from, and we will continue our process of capital reallocation by thoughtfully thinking about assets that might be consolidated and redeploying capital that we might release in strategic priorities. If you turn to page four, we've summarized here the performance of our public companies, in some cases, actually four out of the five, for the first quarter. In the case of Rocket, as you know, focusing on their full-year results.
As you know, the top five companies that Kinnevik is invested in are public. They account for 84% of our NAV. I suspect that many of you who are interested in Kinnevik will have already listened to or read the public reports that have been produced by Zalando, Millicom, Tele2, Rocket and MTG. I'm not going to repeat those. I will just make three observations. The first one is our companies are on track, and to us, that's the most important thing. If they were not on track, we would obviously be open about that, as I'm sure the companies themselves would have communicated that. Zalando is on track for its full-year guidance. Millicom is very much delivering on the strategy that Mauricio and Tim have been executing on. Tele2, under Allison's leadership, is executing on its communication transition from voice to data.
Rocket is driving all of its key companies to further growth, but more importantly, enhanced profitability. Finally, MTG is very much executing on its transformation strategy. We're very comfortable with the progress that the companies are making. The second observation I would make is that, as you know, we believe that the value creation comes from growth and consolidation. We're very pleased to see that for Millicom, Tele2, Rocket and MTG, this quarter was an important quarter to demonstrate to their shareholders that they are very focused on capital reallocation.
Whether it is Millicom exiting the DRC, Tele2 establishing a joint venture in Kazakhstan, Rocket exiting PizzaBo and La Nevera Roja, or MTG completing the sale of CTC, you can see that there's a common thread across all these companies, which is a focus on creating great consumer experiences, growing revenues and profits, but also very thoughtfully reallocating capital across businesses to ensure that the prudent balance sheets are maintained and capital flows to the opportunities that have the greatest returns. If we turn to page five, I just wanted to give you a flash on innovation. As you know, the lifeblood of our company and of all of our investee companies is innovation.
We're very pleased to see how Zalando continues to reinvent itself year after year to capitalize and, in many cases, to anticipate the key trends that are taking place in the online world, and obviously more particularly in the online fashion world. The world is going mobile. The world is moving to apps. You need to attract and tailor your proposition to new customers. You need to create vertical propositions that protect your business from more focused players. You need to shift to deliver broader assortment without taking inventory risk. You need to embed your business in the social connectivity, and you need to personalize your offering. As you know, Zalando has delivered a fantastic set of initiatives, which are being rolled out as we speak to address these trends.
Zalando is not just investing in the front end, it is also investing in creating a real partnership with its brands and suppliers and fashion partners by ensuring that they adjust and adopt a partnership program that very much serves their supplier base. So we're very pleased to see how Zalando continuously think about challenging the way they do business and reinventing the business model going forward. Many of these common traits apply to our other investee companies. If we turn the page to page six, we have a summary of our five largest private companies' performance.
Starting with Global Fashion Group, as you know, because they reported the results a couple of weeks ago, they delivered excellent growth of 48% in revenue during the course of 2015 and continued to invest in driving the growth of their business and started rolling out a marketplace offering which would enable them to increase the assortment, improve the margins, and obviously de-risk the operations. As you know, that is a slow process because when you're operating in over 25 emerging markets, you need to find a number of partners who trust you. The best way to establish that relationship, in many cases, is to start with an inventory relationship and then move to marketplace. Quikr is progressing across many of its key metrics, and we've listed here three or four of their key initiatives.
We were pleased to see that an affiliate of The Times Group, which is India's largest media group, decided to strike a very interesting media for equity transaction that underpins not only the valuation of Quikr, but also its potential in the local market. This, to us, is another common theme that you will see in our companies, establishing partnerships with some of the world's leading companies to ensure our businesses do better.
Moving on to Bayport, despite many of the challenges that the emerging markets, in particular African markets currencies have faced over the last 12 months, Bayport has continued to do particularly well, has secured access to interesting financings that it can maintain a low cost of capital, has strengthened its capital base, and finally, has begin to roll out interesting mobile-enabled products because they, again, are fully aware of the fact that the world is going mobile and Africans are looking to increase their engagement with financial services from mobile. We have that experience from Millicom's great success in MFS, in particular in Tanzania, and we're delighted to see that Bayport is fully embracing the transition to digital. Moving on to Lazada, who also had a very good performance in its cluster of markets. We had an excellent revenue growth.
As you can see, GMV up nearly 170%, revenue growth up 80%. Of course, the business was investing and is continuing to invest very heavily to ensure it maintains its leadership position. Lazada had negative EBITDA of nearly EUR 300 million last year. That means that the leadership that they're building and maintaining is coming at a price, a significant one. That is why, as a board, we were delighted to welcome Alibaba, one of the world's largest companies operating in our sector, and clearly a very important partner who contributed half a billion EUR to the company, and also acquired shares from the existing shareholders to establish an even stronger partnership. Is, for us, a very good example of our thoughtful approach to building businesses. In some cases, we continue to invest.
In some other cases, we attract others who also view this as an exciting opportunity, we'd rather have a slightly smaller share of a bigger pie than necessarily be fixated with a particular ownership structure. Tesco was first, Temasek came second, Alibaba now. This is a good example of attracting world-class companies to build great businesses. Finally, our new arrival, Betterment, a very exciting company, which has a mission to put the customer at the center and deliver him or her the best financial services products at the lowest cost in a very easy and friendly manner. Betterment, as you can see from the numbers, despite some of the volatility of the first quarter, continued to deliver a very attractive performance, and we're very pleased with the exciting plans that Jon and his team are developing.
If we turn to page seven, this is slightly deeper dive on Global Fashion Group that shows you the very good progress they're making not just on building the business, but also on improving profitability. Clearly, some regions are more profitable than others, and some regions are able to deliver a faster path to profitability. We're very pleased to see that all companies are moving in the right direction, and based on our insight in these businesses, we have no concerns that the businesses are on the right trajectory. They're focusing on the right topics under Romain's leadership and the regional team's leadership in every continent around the world by developing some common best practices and slowly but surely developing an integrated approach to brand owners.
We continue to recruit key personnel, and we will continue to make announcements every quarter about the strong bench that is being built within the GFG companies. With that, I will turn it over to Joakim, who will give you some background to the capital markets environment in which we've been operating, which has been challenging, and also give you a perspective on how we've been approaching evaluations later on.
Thank you. On slide nine, to start with, you can see the general equity markets trends of the last quarter, which is showing us that the larger indices have partly recovered from the heavy fall in January, with the exception from the Shanghai Stock Exchange, which has not really traded up again and remains at -15%. If we turn to the right-hand side and look at the currency development, we see a mixed picture for the Swedish krona with a depreciation against the Brazilian real and the Russian ruble, more or less a constant development against the EUR, and a small strengthening against the $ and the Nigerian naira. On the next slide, we show the more detailed development for a select number of peer groups used in the valuation of our private assets.
On the left-hand side, you can see the price development, similar to the overall equity market trends shown on the previous slide, the year started with a sharp decline, but with a partial recovery since then. Most noteworthy on this slide, probably the negative development for the fashion companies with a price decline of 16% of the quarter, which also is reflected in the valuation multiples on the top right on the slide with a 22% decrease during the quarter from 2.6-2.0. As this group only includes online fashion companies in developed markets, it is also important to look at, for instance, Vipshop, as shown on the slide, operating in China, where the multiple contraction is even sharper during the quarter with a 40% decrease, and the sales multiple ending at one times sales by end of the quarter.
Turn to page 11, it not only reiterates the high volatility in the equity markets over the quarter, also for the global internet index, as shown on the top of the slide, but also as a direct consequence of this turbulence, it shows that many private investors have had to take quite substantial write-downs on portfolio assets, as shown on the bottom part of the slide, where the average changes in valuation for a number of unicorns are shown.
The columns indicates that there has been substantial write-downs with 20%-40% of the value for a large part of them. The second trend on slide 12 that has become very evident the last quarters, again, driven by the high volatility and market environment, is the slowdown and scarcity of funding for private investments, illustrated on the left-hand side by totally invested VC amounts in the columns, year-on-year growth in the circles, and the number of new unicorns created by the line. All indicators are showing a sharp decline from the peak levels in Q2, Q3 last year. As said on the previous slide, the number of actual down rounds or down exits has also been substantially higher the last two quarters, as shown in the green columns to the right.
To summarize these slides, it's quite obvious that we are operating under very challenging conditions right now, which of course has a great impact in the way we manage our companies with high discipline, continued conservative evaluations, and focus on our strategic priorities. Back to you, Lorenzo, again, for the investment management activities.
If you turn to page 14, you will see a summary of the investment management activities for the quarter. We've listed here eight important transactions that we have executed over the last four months, given that we are giving you a bring down to today. On the new investment side, as discussed previously, we were very pleased with our $65 million investment together with the existing shareholders totaling around of $100 million in Betterment, which was completed a short while ago. To us, this is a very interesting and promising company, and if we look at it from an investment point of view, this is what I would describe very much the sweet spot of Kinnevik-type investments.
We're coming in early with a significant stake. The existing shareholders are very much believing not only in the company but also in the valuation by contributing a third of the financing. This is a balanced transaction at a valuation that is fair to the company, to the existing shareholders, and to us, the latecomers. We look forward to continuing to work with Jon and the existing shareholders in the coming months and years. Babylon is a much earlier investment, thus much smaller. It's a company that is pioneering the development of healthcare applications for consumers, both traditional and artificial intelligence-based. By definition, we're highly focused on taking a very prudent approach to make sure that our capital is invested wisely and not ahead of the consumer adoption of each of these businesses.
The most important investment which we're announcing today is the underwriting of a EUR 200 million capital increase by Kinnevik as part of a EUR 300 million total raise by GFG. We've partially pre-funded that, and we expect to invest the rest of the capital during the course of 2016, second quarter. Finally, as I commented earlier, we made an interesting and well-timed investment in our own shares, which again, is consistent with the strategy that we communicated last year of investing in our own stock if three conditions were met. I think we've spoken already about the exits. Just noteworthy to point out that we are continuing on our quest to make our investment portfolio simpler, easier to understand, more streamlined, so that all of you investors have a full appreciation of all of our investments.
In all of these circumstances, we are acting very responsibly, and we're looking for great owners and partners for the businesses that we do not want to continue owning. As a result, we're very pleased with the fact that Ringier, which is a very established and well-respected Swiss company, decided to take over our DealDey business. Similarly, we're very pleased to see that Future Retail, which is a very established Indian retail conglomerate, acquired our FabFurnish business. We are in the business of building great companies, but if some of the businesses are no longer strategic to us, we make sure that we look for the best owners to ensure that the people who are building the businesses, the management teams that we have recruited, continue to have a future, even if outside of the Kinnevik umbrella.
The following pages give you a deeper dive on our investments. I am not going to go through them in detail because we hosted a number of calls in and around our investments. I just want to highlight a couple of points per page. On Betterment, we're very excited about what Betterment is doing today and even more excited about what they're doing and will be doing in the coming years, which essentially can be summarized in two ways: an expansion of the product and service offering for the existing consumers, and an expansion of their distribution channels beyond the direct-to-consumers. On those two metrics, we will be coming back to you quarter after quarter to tell you the progress we're making.
As it relates to Babylon, as I said, it's a much earlier company, but we're very excited about, again, two key areas of focus, the broadening of the consumer offering to the direct-to-consumer business and the establishment of great partnerships whereby Babylon can become the interface between companies that are trying to offer a great healthcare solution for their employees and the world of healthcare. Coming to GFG on page 17. I'd like to spend a couple of minutes on this because I suspect many people will have questions around this particular investment. As you know, we started investing in the individual fashion companies that have created GFG about five or six years ago through two companies that most of you will have probably forgotten, but we still remember, called Bigfoot.
The Bigfoots were essentially holding companies intended to allow these businesses to raise capital to be invested in the various region. Over a period of time, up to 2014, we invested about EUR 300 million in the various operations, with the bulk of the capital being invested in 2012, meaning fairly early in the development of GFG. We then received an additional amount of shares in GFG in connection with the Rocket reorganization that took place pre-IPO. We started investing again in GFG in 2015, when we led an equity convertible financing round with an investment of EUR 59 million. We continued investing through a shareholder loan, which we awarded the company earlier this year, and we are now announcing an additional commitment of SEK 150.
As a result, 200 of EUR 59 million of the capital that will have been investment and is likely to be invested by Kinnevik, will be invested at the current round. This is a good example of the prudent approach that Kinnevik has taken to making its investments, going early, pausing, and then reinvesting at the appropriate time to ensure the company has a clear runway to deliver on its plan and get to be a successful, established companies that will and is able to go public, as many of our other companies are in due course. We've listed on the right-hand side the key features that I've just described of the current transaction. We've commented quite a bit on the investment in the Kinnevik share and the transaction that we've executed with respect to the Lazada partnership.
I'll just make one final observation on page 19 as it relates to the Lazada investment, again, to highlight our financial discipline and good returns, whereby an investment of about SEK 500 million that was made again over multiple rounds to ensure that we de-risked and contributed capital as we got more comfortable with the business, has turned into a two times multiple of investment capital and 30% IRR based on the current valuation. Of course, we do not know how much the company will be worth in 12 to 18 months, and that's why we're putting a question mark onto the future. Could be higher, could be lower. We surely hope that the work that the team will be doing and the partnership with Alibaba will lead to a higher number.
With that, I will turn it over to Joakim to take you through a summary of our financial position, starting on page 21.
Starting with the NAV. Overall, as mentioned, we saw the NAV come down by 13%, from SEK 83.5 billion to SEK 72.7 billion over the quarter as a consequence of the general market environment, as mentioned earlier in the presentation. The explanation, if you look into the details, was that Zalando was down by 19% of the quarter of SEK 5 billion based on the substantial contraction of the online fashion company's valuation. The telecom companies, Tele2 and Millicom, were both contributing by SEK 2 billion in total, we had a SEK 1.7 billion write-down of our private portfolio, which we will come to soon. As of yesterday, the NAV was slightly above the end of quarter level at SEK 74.5 billion.
If we turn to slide 22 and look at the private portfolio, we have this quarter a total write-down of SEK 1.7 billion, as I mentioned, and total investments of SEK 1.2 billion. In total, the value of the private assets came down by SEK 500 million to SEK 10.2 billion. The main driver of our write-down of GFG is a consequence of the 22% contraction of the peer group multiples and the continued market sentiment of favoring developed market companies over developing market companies and profitability over growth. When we put all together for GFG, we are concluding on a fair value, equity value of EUR 1 billion for all shares in GFG, resulting in a write-down of SEK 1.5 billion for Kinnevik.
On the more positive side, we have a markup of SEK 533 million on our shares in Lazada following the transaction with Alibaba, we are adding the new investments in Babylon and Betterment. The third and final slide in this section is a summary of the investment activities and the overview of our financial position. We invested SEK 1.2 billion during the quarter, including Betterment, Babylon, and our EUR 50 million loan to GFG. We started the year with a net cash of SEK 7.6 billion, taking out the investments in the private portfolio and the SEK 500 million investment in Kinnevik shares takes us to a net cash of SEK 5.8 billion at the end of this quarter.
Back to you, Lorenzo, for the summary.
Thank you, Joakim. As you know, all great businesses are led by great people and great boards. We are very fortunate that following the extensive work that the institutional investors, mainly based here in Sweden, together with our support, have selected 11 new directors who will be joining our five largest public companies. As you can see, we have selected, together with the Nom Com members, a great group of people and a very diverse group of people. A group of people who have different geographical experience and exposure, but they all share a passion for building digital businesses. About half of them are female professionals who have cut their teeth around the world, building great businesses and leading great operating units. We are really very excited to continue working with them, and begin a new journey for each and every one of our company.
I am very confident they will bring experience, perspective, and a new energy to our promising businesses. In conclusion, we showed you this slide on page 26, as we established the priorities for 2016. As you can see, for every one of our nine key objectives, we are very much on track with respect to delivering on our promise. We will continue to report back to you with a slide to show you the progress that we are making. In conclusion, I think there are two ways to look at this quarter. You can focus just on the numbers and consider that this was a 13% decline in NAV and end it there. You can look at it the way we look at it, which is to focus on the operations of the businesses and get comfortable with the fact that we are on track.
Second, you can look at whether we are delivering on our promise of building the next generation of businesses, of creating and de-risking through partnerships the businesses that are exposed, and continue to streamline the portfolio. Third, to ensure that we are building the right bench of talent to make sure that each and every one of our company can live up to its promise, which is one of creating growth and profitability, but doing so in the Kinnevik way, with the focus on governance, risk management, compliance, and corporate responsibility that you all expect us to be champions of wherever we do business around the world. With that, I would pause and would welcome questions either from people in the room or people on the phone. As always, we start with questions from people on the phone.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 01 on your telephone keypad. If you find your question has been answered before it's your turn to speak, please press 02 to cancel. We've got Maya Chelay from BAML on the line with a question. Please go ahead. Your line is open.
Good morning. Hi, it's Maya. Thank you very much for taking my question. Lorenzo, you said you may consolidate some assets, and that you may release being best. Can you talk a bit more about your capital allocation plans for the coming months? Thank you very much.
Thank you for the question. I think I can confirm to you that at any point in time over the last couple of years, the Kinnevik team must have been working on anywhere between six and 10 projects, some of which come to fruition after a few weeks, some of which are still very much in the making. Our focus is always the same, which is we look at each and every one of our businesses, and we conclude whether it has the right team, the right strategy, the right market opportunity, the right partners, and the right amount of capital to win. If any of those are missing, then we work very hard to fix those issues to make sure the companies are better positioned. That is our promise to our companies, our own people, and to, of course, our shareholders.
When we realize that a company's unlikely to be able to be successful despite our efforts and despite our addressing those issues, then we look for the best opportunity to improve the business. The solution is, as you've seen in one of the slides, different for every one of the companies. In the case of Millicom and the D.R.C., the right decision was to transfer the business to Orange to allow them to build a stronger market. In the case of Tele2 in Kazakhstan, the right decision was a joint venture led by Tele2 management, but with capital invested. The story goes on. That is the mentality, attitude, and approach that we have. We take our time to build great businesses.
We take our time to try and improve them, then we take our time to think about what is the best new setup to make them successful and to create value for our shareholders. We have, just like we've had for a number of years, between six and 10 projects going on. Of course, once they get completed, we will announce them and obviously be delighted to talk about them.
I remind you that if you want to ask a question, you will have to press zero one on your telephone keypad.
We have a question here in the room.
All right. Thank you, Magnus Roman, Handelsbanken. In the annual report, you wrote that you will plan to maintain a significant net cash position.
Yes.
Subsequent, you announced your share redemption program. Would you say that that statement is still valid?
We remain highly committed to our overall financial parameters, which as you know, have a certain investment plan, a certain dividend policy, and a very clear statement of having close to or very little financial leverage. Clearly, at different points in time, we might swing from a very large net cash position to a small net debt position, simply because that is the nature of the business we're in. We cannot time perfectly the investment and divestments, and that is why we, as a company, maintain healthy credit facilities to manage that swing. If you look at our net debt position, it's obviously affected by the fact that we have a SEK 1.2 billion bond outstanding. Our net cash position is affected by that. Our gross cash position is larger.
We are, because of the business that we're in, because of the fact that we are committed to a dividend, which is a growing dividend, and as you know, probably for still a few years, we will have a shortfall between the dividends we receive and the dividends we pay. We will look to maintain a significant cash position. The word significant can be interpreted in different manners. Clearly, right after our redemption program, that number might be very close to zero, even negative. There is no reason for us not to aim to return to a cash position in the next couple of years to make sure that we can deliver on our promise.
One should read that what you're describing, that you see maybe better potential for investments in regards to the climate out there and valuations, that potential should not be affected by the EO or the redemption program decision from your side.
Absolutely. Having said that, I just want to manage expectations in the sense that you have to appreciate that we are not asset traders, we are business builders. When you are business builders, the most important thing you do every day is to build great companies that are building great brands and delivering great service. For us, we have had, as you've seen, quite a busy first four months with quite a significant amount of capital being invested. Now we need to work as partners to our management teams, founders, and managers. I'm now speaking in particular of Global Fashion Group, which is now a very substantial company in its own right, and an even more substantial company for us. We need to be able to partner with them and enable them in 25 markets around the world.
You should not think that we are just writing a check and just then showing up at the board meeting. As a result, in circumstances like this one, when we have made a number of new investments and sizable investment, we redouble our efforts to work with our companies to ensure that they are well supported. This does not mean that we might not make another, say, two, maybe even three new investments during the course of the year. The priority shifts a little bit more to now let's roll up the sleeves and work even harder on making the companies better than just chasing the next opportunity.
That's clear. Maybe that just led into the GFG question. Because it seems obvious that you will contribute more, in comparison to your natural ownership share than Rocket Internet in this funding round. That implies that you should be increasing your stake. Just to make us understand this funding round, if all the other 52% owners would participate with their pro rata share in full, what kind of ownership would you expect Kinnevik to reach? How large would the funding round be then?
Obviously, this is a very important question, and I would love to be able to give you very precise numbers, both in terms of the total capital raise as well as the pro forma ownership that Kinnevik will have. Unfortunately, this is a private company, and so this is not your traditional rights issue with a defined amount and a defined underwriting that is likely and is predictable because you can look at the 10 preceding rights issue in Sweden for companies of this size, and you can map out what Handelsbanken and Nordea Fonder might do about that company, right? This is a company that is a private company, which has a very solid set of shareholders who, I can confirm that to you today, since we announced the capital increase, have reached out, many of them suggesting that they will participate.
The board, in conjunction with the shareholders, will then need to decide whether we will lead to an upsizing, so call it green shoe style, to use a technical word, or we will keep it where it is. We will look at, depending on the size of the interest, the scale back that Kinnevik might take. I think, as you know, in order to be conservative and to always put out the outcome that is the potential, the most significant for us, we have used SEK 300 million, which is obviously a high number of capital committed, and SEK 200 million from Kinnevik. It might end up to be, say, SEK 320 million with SEK 180 million or something, it's very difficult to speculate at this stage.
That's why we just say, "This is the framework." Hopefully, by the time we see each other in July, I will be able to take you through in detail what the implications are for us. Needless to say, though, we will become an even greater and larger shareholder. If you go back in the history of Kinnevik, this is not dissimilar to the 2012-2013 Zalando transaction, where Kinnevik went from being in the 20s to a 36% stake. So from my personal point of view, if we ended out somewhere between 35% and 40%, we will have achieved the Zalando style increase in leadership in the company, and then might get diluted down three, four, five years from now when the company goes public.
That would be, if you wish, if you want to talk about history rewriting itself, I think you can look at that as a good template. Zalando was started 2008, right? Five years later, Kinnevik became the largest shareholder. This company was really started on average 2011, 2012, 2016, Kinnevik becomes the largest shareholder, because these are emerging markets and not developed markets, you give it another three, four, five years, the company's mature and is able to achieve its own standing in the public markets.
That's a very good answer. Just rounding up with the financials and your view of GFG, because you've obviously explained that the focus is shifting towards profitability. In regards to that, would you be satisfied with GFG producing growth numbers in line with their main listed peers, in the coming years? Do you have higher growth ambitions than that?
The first thing, there are three key pieces to the answer. The first one is we have to appreciate that this company reports in euros, but probably has no euro sales. A very large portion of the outcome of the coming years will be driven by currencies. As hard as Joakim and I work on this with Torun support, we have very little understanding of where the 15 or so currencies that are impacting the GFG business will be over the coming three years.
It's a constant currency.
Exactly. The second thing I would say is that the company continues to deliver very healthy growth rates, but just like you've seen with Zalando, at some point, you start tapering the growth from the explosive numbers into more reasonable numbers to ensure that the business has a greater path to profitability. Obviously, last year was a very big investment year. This year will be a very big investment year. Starting in 2017, we will start to see a very clear path to profitability, just like you saw in Zalando. Few people believed in it, but the company delivered it.
I think it is easier, I think, to see it here, if you look at the page seven, because we are providing very granular information on each of the regions, and as such, you can see, as already communicated by Rocket, that a number of the country businesses are already profitable. Again, the story is repeating itself. As a result, I think you should expect to see revenue growth coming down versus historical rates, but not all the way down to the listed peers, because we believe that this company has and continues to have a big market opportunity. The capital raise that we are making is intended, if you think about it, to reinject the lifeblood to make sure this company continues to grow despite the adversity.
As you know, in life, you can be very scared when things are challenging, or you can look at them as great opportunities. We view this as an opportunity to accomplish two things. First, to give the firepower and the fuel for GFG to accelerate its growth and for Kinnevik to increase its ownership to the position that we would like to get to, which is your classic pre-Zalando IPO position of, say, 36%, which is in line with what we own of Millicom as well.
That sounds thrilling. Thank you.
Pleasure.
Elias Borse, Nordea. Maybe if you can spend some time talking about the allocation of capital within Global Fashion Group. We've heard reports that Zalora is shutting down Vietnam and Thailand, for instance. We've also heard that Jabong is looking to find a new owner, media speculates at least that they are looking at a new owner. Jabong obviously grew by 7% last year, while the other companies had an average growth rate of about 88%. Flipkart invested $50 million in Myntra and so on. What markets do you think this capital will be allocated to? Do you think that the Global Fashion Group IPO, you mentioned a timeline of three to five years, would that be possible with the current situation in India, or do you think you would need to exit India? Thank you.
As we talked about, it's obviously a very topical question as you can imagine. This is something that the GFG board spends a lot of time on and Romain and Nils and the teams locally spend a lot of time on. I think as we've discussed with our other, more established companies, this is not a one-off, meaning every one of our businesses has to look at every one of its operations by region, by business unit, by model, and determine whether it has a clear path to profitability and attractive returns. If it doesn't, fix it, and if it can't fix it, merge it. That path is very clear. As you can imagine, given that GFG is our largest private company, it invested nearly SEK 300 million of capital last year, and it's now our largest private investor.
We are going to take that discipline down to every conference room, if you want to be as provocative as that. That type of analysis, that type of work, that type of soul-searching, is actually led by the local teams who are saying, "We realize that our path to profitability requires taking decisions, in some cases, adjustments, in some cases, partnership, in some cases, invest more." That is what's going on. We are incredibly supportive of that soul-searching, which in the case of Zalando, is all about reinventing Zalando. Right? In the case of GFG, is about fine-tuning the operations. Please, do go back to the comments I made around DealDey and FabFurnish. I don't like the word shutdown. There is no reason in life, if you started an interesting project, to shut down.
There might be circumstances in which you have to shut down, that is at the end of an extensive process of having reviewed any and all possible options to optimize the business. I believe every single one of GFG's operation has value. In some cases, it's a huge value. In some cases, it's a slightly lower value. The value is there because when you invest in building a brand, in assembling a team, and the fundamental market opportunity is exciting, there is value. You might not be able to afford to exercise all of the options that you have on a business, in which case you might say, "I prioritize, I reallocate capital, and I find partners." Remember that in emerging markets, most companies operate in partnerships. If you think about Nestlé, think about Unilever, they have listed businesses in Nigeria and Indonesia. It's the common.
This company actually stands out to the opposite as a full owner of all its businesses. I would be very supportive if the regional managers and the top management felt that it made sense to consider partnerships. Unfortunately, we live in a highly media speculation world, in particular in India, which loves to talk about digital, loves to talk about e-commerce, and the gossip is just amazing in the country. Right? If I make a trip to the country, which I did a few weeks ago, then it's all about Kinnevik investing billions of dollars in India. If I don't go for two months, then Jabong is looking for partners. I think we have to move away from that, go back to what is our strategy, how do we do business, and what type of initiatives we put in place to deliver.
I think hopefully you and our investors have confidence in us that we would do exactly what you would do if you were in our shoes, which is to apply a disciplined approach to investments and of course, prudence if we cannot afford to exercise all the options we have.
Just to follow up on that. You mentioned FabFurnish, for instance. By my calculation, you invested about SEK 250 million in FabFurnish and DealDey, and the divestment that you listed for this quarter was SEK 2 million. Is that correct, that you invested SEK 150 million and sold it for SEK 2 million?
If you look at page 14, we invested SEK 98 million in DealDey and SEK 57 million in FabFurnish, and the proceeds that we received from those sales are minimal. I think this goes to the heart of what Kinnevik is. We're open when we're successful and we're open when we're not successful, because that is how we want to communicate with you and our shareholders. Not all of our companies will be successful, and in some cases, they will lead to sales that accrue very little proceeds. I can assure you that having little proceeds is better for the company, for their people, for their managers, and for Kinnevik, than a closure which might cost tens of millions and also have a very big reputational impact for us.
I can assure you that the teams at Kinnevik in Stockholm and in London have probably spent as much time on DealDey and FabFurnish as they've spent on Betterment in order to find the right solution for these companies, because that is our responsibility to do so. Yes, I would have liked to tell you that SEK 150 million was turned into SEK 450 million. No, it turned into a very minimal amount. I must say, I am even more proud of those two transactions than I am of other transactions that we might have made because of the effort and energy that the team has put to find the right home for these companies, which is a very different philosophy and approach than many other, more, I would say, institutional manager investors.
Good. Final question, if I may, on the capital distribution. Did you think about instead of just doing a share redemption, doing a sustained buyback program? Obviously, it would take much longer than the SEK 500 million, did you consider that and why did you not choose it? Thank you.
I will give you a perspective. This ultimately is a board decision, not a management decision. Then maybe Joakim, you can give your perspective as well. We are not in the business of manipulating Kinnevik's share price. That is not our business. As you might have seen, we executed a small initial buyback with the sole objective of making a very good investment as opposed to drive up the share price. I think, you will tell me what you think, I think we did a good job. We bought quite a lot of shares without moving the market. We bought just a teeny weeny little bit every day over a long period of time. We were managing that, kind of every day we would get the report, 60,000 shares, 50,000 shares, 90,000 shares, and we never moved the market.
If you think about executing that 10 times bigger, it would take forever to achieve that particular. Eventually you might actually move the market. It was a much more rational decision, I think, by our board to say, we want to deliver capital to our shareholders. We want to give them a clear message that when we accomplish such outstanding results as 16 times money on Avito, they need to feel the benefit as well. That is why they made the decision.
Thank you.
Bertil with ABG. Just one question from me. I think you partly answered it already, but you started out the year in a very active manner with investments notably in Betterment and Babylon, and now also committing additional capital to GFG. I am just wondering now that you are keeping your net investments guidance for the full year of SEK 2 billion-SEK 3 billion, I think after GFG finance round has been complete, you would almost have reached that. I am just thinking, when you are keeping the guidance, is your outlook that you will have very active investment activity for the rest of the year with both investments and divestments? Or are you seeing more calmer activity for the rest of the year?
As a very prudent investor, we take a step at a time, and we have teams working in parallel to make sure that we have the ability to finance our investments in a prudent and conservative manner. Of course, if our, I'm going to use a simplification, divesting team does a fantastic job in the next 3 to 6 months, then we will have probably a greater firepower to deploy in opportunities that our investing team is pursuing. We take those two in parallel, and we will never go and outspend our ability to finance. We feel that that is not what our shareholders want. I don't think our shareholders are expecting us to make bet on leveraging the balance sheet at low interest rates and making high yield investments in a situation where prudence and risk management is at the heart of what we do.
We are investing, in many cases, in growth companies, which, as Elias reminded us just a moment ago, can result in SEK 155 million turning into a minimal amount. We are acutely aware of that, as a result, we have to take very responsible positions around that. Do you want to ask if there are any questions on the line?
Thank you, Richard.
Yeah.
There are no questions registered on the telephone line.
Excellent. Well, thank you very much for joining us today. As I said, it was a good quarter. We've accomplished a lot. The markets have not been supportive. For long-term oriented investors, we are continuing to deliver on our strategy. We look forward to seeing you in July.