Good day and thank you for standing by. Welcome to the VEF Q1 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Nangle, CEO. Please go ahead.
Super. Thank you very much, operator. Good morning, good afternoon, everybody. Thanks for joining us in our first quarter 2026 results call and presentation. As per usual, I have my colleague and CIO, Alexis Koumoudos, with me. We'll spend the next 15-20 minutes just running through all the events and key numbers and parts that made up the quarter for VEF as it was. All the details are online as well from a presentation point of view. That will be available as well after this call. With key events of the quarter, looking at slide number two, I think bigger picture, we're all very cognizant and aware of the geopolitical-driven volatility, the world that we're living in, the first-order effects, the potential second-order effects.
We're not going to delve into all of that here because it's well documented by many people elsewhere, but we will give you a bit of a flavor of how life at VEF has been affected by that while we marry in all the micro-level delivery of the first quarter. I think the first point is the NAV itself. Obviously, we had a bit of a headwind in Q1. Naturally, when 30% of your portfolio is mark-to-model and you have a market sell-off, the NAV was off 5.8% quarter-on-quarter in dollar terms, a bit less in SEK terms. Fundamentally, portfolio is doing very well. Currencies were in our favor, but multiples on some key names drove the NAV quarter-on-quarter down. More specific and back to a micro-level and performance, exits continue.
We had another secondary in Juspay in Q1 2026. This is their Series D follow-on $50 million. It's a billion-dollar-plus valuation company. We invested in $100 million a few years back from a total valuation point of view. Yet again, we used the opportunity to top-slice our position there and take in nearly $15 million of gross proceeds at a healthy IRR of 34% and still having a decent stake in the company. I think most important for us and our narrative to the market is that was an exit, not at NAV plus-minus, that was an exit above NAV. Continue to turn our NAV, our companies into dollars at the valuation that we say ±.
Coming back a bit macro level, I think from an exposure point of view, we're getting a lot of questions, obviously, from the geopolitics of the world and how we are or aren't affected, even though I think everybody's affected in some way, shape, or form. We are actually in a relatively good, and I say relative, macro position in terms of our exposure geographically with 80% of our portfolio plus minus being Latin American exposure, which is a relatively safe haven part of the world. Brazil alone is over 50%, maybe 60% with Creditas being our key asset. We're obviously the commodity trade that Brazil is a bit of a safe haven status with high interest rates, commodities, and just geographically well-placed. We're seeing markets there, rally currency, index, et cetera, and we're indirect and direct benefits of that exposure.
I'll get into that in the presentation. More micro-level back to Creditas, it's been a really good window at last. We've enjoyed the last 15-18 months of Creditas quarter-on-quarter-on-quarter. The fundamental story continues to improve in terms of accelerating growth and just the new layers of positivity coming into the story. Now it's more around AI-driven efficiency. You get nice operating jaws from a top-line volume revenue growth and efficiency coming through, healthy guidance looking forward. Those kind of catalysts that everybody likes to see around raising capital, nice valuations, getting a bank license. It's a nice window. We're enjoying this. They are delivering, and that's most important for us as an investment company. The final is just more macro, again, away from geopolitics, but more in the tech side and the AI adoption.
We've kind of stayed away from overly talking about AI and from a VEF and portfolio point of view. I think the pace and progress of these models now has really become game-changing. All of our companies are engaging. It's gone from theory to reality. We're enjoying seeing what they're starting to do, and some it's already starting to feed through to the numbers like Creditas. I guess we just wanted to put a marker down this quarter, and we'll be updating you as we go on this front because it's been a very exciting next wave of efficiency, growth, costs, operating jaws that we can see coming through in our portfolio. Going into the presentation proper, just a few numbers.
This has all been flagged earlier on in our release, but our NAV is at $408.6 million for the quarter, off 5.8% in U.S. dollar terms. As I said, the SEK and SEK per share is down less because of the weakness in the local currency, and it's down -2.8% in the quarter. I'll skip over slide 4 and I'll move directly to bringing Alexis into the call for slides 5-9, where he'll talk us through valuation moves in the quarter and a little bit more about the exits that I talked about in Juspay and beyond. Alexis, over to you.
Thanks, Dave, and hi, everyone. Yeah. As Dave mentioned, the first quarter of 2026, 70% of the portfolio is valued at latest transaction and 30% mark-to-model. Within the portfolio, as Dave mentioned as well, Juspay completed their $50 million Series D follow-on at a 16% dollar premium to the Series D of 2025, in which we took $14.6 million.
In secondary, sold for cash, and we hold a 6.4% remaining stake priced here at the secondary price. You'll see that the net impact on the NAV is the net impact of $10.8 million markup from the up round that happened and selling $14.6 million for cash, which reduces our NAV for Juspay, the mark value by $3.8 million in the quarter. The other thing to point out on this slide, in slide five, is Solfácil rolled off a recent transaction to mark-to-model as it completed 12 months from the transaction. Solfácil, Konfío, and Nibo valuations under mark-to-model valuation methodology were impacted by the March sell-off and comps across tech, fintech, and SaaS. Outside the impact of the comps, each of these businesses continue to deliver in line with or ahead of our business plan. The markdowns were purely a symptom of market moves.
Getting into this in a bit more depth on slide six, we show the breakdown of the dollar NAV evolution over the quarter. You can see the biggest impact on the NAV in the quarter was really the sell-off in comps, and their multiple impact on the mark-to-model portion of the portfolio. This impacted our NAV to the tune of $40 million, and it's reflected in valuations of the companies in the mark-to-model methodology, names like Konfío, Solfácil and Nibo. This was offset to some extent by the portfolio performance, which had a $10 million positive impact on the NAV. Under the latest transaction portion of the portfolio, you'll see a -$4 million move in this section of the portfolio, and that is purely the $10 million uplift in the Juspay valuation, offset by selling $14.6 million in Juspay, and the corporate cash increases $10 million.
That is predominantly from the proceeds of the sale of Juspay, offset in part by OpEx and coupon payments in the quarter. Overall, the FX impact was neutral in the quarter, and the net impact of all of these moves was, as Dave mentioned, the 5.8% contraction in NAV quarter-over-quarter. On slide seven, we just want to reiterate that we continue to feel more and more confident in the quality of the portfolio and its ability to compound from here. We see our portfolio growing at 25%-30% year-on-year from a profitable base with our large late-stage top three holdings driving much of this on a self-sustaining basis. We're encouraged by the deal activity we're seeing across our geographies, and feel proud of our companies and their ability to continue attracting fresh capital, which drives real value growth and creates liquidity options.
We're also proud to find opportunities to continue converting slices of our NAV to cash at or above the marks we hold them at, whilst delivering benchmark returns like we did in the Juspay round. Moving to slide eight. We just wanted to reflect a little bit and update everybody on what Juspay is as a business, our history with the company, and where we stand after this transaction. Juspay is the leading payment orchestrator in India with a dominant market share. Juspay powers some of the largest enterprises in India and now has a large payment infrastructure business powering UPI apps and bank infrastructure. Juspay has also now launched an international business, and they have offices across Asia, Europe, the Middle East, U.S. and Brazil. By the numbers, Juspay powers over $450 billion of annualized TPV, representing about 70 million average daily transactions.
It's growing its top line in over 50% year-on-year. The business quality is high with near-zero churn, over 80% gross margins, and it's been profitable for over one year now. Juspay was our first investment in India, and we wrote two checks into the business, one of $13 million in early 2020 and $8.1 million in December 2021. Since our first investment, revenues have grown over 10x and the company's raised money, in rounds led by tier-one investors including SoftBank, Qadara and WestBridge. If we include the two realizations of $29.4 million, our invested capital has grown from $21.1 million to $94.9 million, representing a 4.5x MOIC in USD terms. The proceeds of our latest secondary sale, the Series D follow-on, represents 6.6x MOIC and a 38% IRR in U.S. dollar terms.
As we mentioned, we retain a board seat at Juspay post this transaction and a 6.4% stake in the business. Juspay really operates at the bleeding edge of tech by any standards, and we continue to be very excited about the potential of the business and the path that it's on. We believe they'll be in a position to announce some more international success very soon, and it's become one of the strongest AI native companies across the fintech ecosystems that we've seen with a product roadmap to reflect that. We're excited to continue our journey with Vimal and Sheetal into the future. On slide nine, we just wanted to update our summary of exits of the last 18 months in a slide. Since November 2024, we've delivered four exits totaling $52 million.
We continue to target opportunistically converting our NAV to cash at or above our marks to strengthen our balance sheet and improve optionality in an environment where we see plenty of opportunity. Overall, the $52 million in exits represented by the BlackBuck IPO and sale, the Gringo sale to Corpay, and the two Juspay partial sales to Qadara and WestBridge, were executed at an 8% premium to the pre-transaction NAV marks on these companies at 1.4x aggregate MOIC and 11% gross IRR over a three-and-a-half-year holding period. If we include the retained stake in Juspay, the total value of these investments would represent a two and a half times MOIC and 24% gross IRR, including the unrealized gains of Juspay. We continue to work towards more exits of a similar standard going forward. Dave, back to you.
Super. Thank you very much, Alexis. We look at a few slides to wrap up, and then we'll open up the Q&A for anybody who wants. Leaning on from where Alexis talked about the exits there, most notably Juspay, the most recent one, a lot of this has been about strengthening our balance sheet from a period of two years ago where we had a debt position. We're long a portfolio of private EM assets, and we start making promises to the market about being focused on exits, delivering those exits close to NAV, then getting that capital in, strengthening our balance sheet, looking at our debt, start to pay that down as a priority, then looking at our equity and everything that extrapolates from there.
Where we're at as of the end of Q1, approximately, we're cash neutral in that we've got $25 million approximate of cash from the exits and buildup over the last 12-15 months. Our debt outstanding at current FX is about $25 million. Our capital position is in a much more, let's call it healthy position, but work to be done. We're still very much focused on strengthening the balance sheet. I think the capital allocation and ideology, what would I share with you today? I think what you saw last year was capital allocation policy 101. As funds came in, we paid down half our debt. We showed the market we were serious about that.
Deleveraging the balance sheet, strengthening our position, and then we nibbled at our shares and bought back a couple of % at what are significantly low valuations, especially as we're realizing at NAV positions as we go. At this moment in time, we're out there talking to our investors, talking to the market. We're listening, and we're logical as we go. We've got a priority. We've got a bond falling due at year-end. We either need to pay that down or roll it, but that's in our focus vision. After that, you have the natural hurdle of your shares trading at a deep discount, and it'd be very hard for the dollar to work beyond that in the near term with incremental capital coming in.
At this point, it's all theoretical because we are in the capital position we are in, but as more capital comes in, we'll start to shape this out and give the market more color where we think. But the bonds, our own shares, is definitely where our headspace is. It's where our headspace was last year, and it's how we act. So just judge us by our actions as we go. Moving back to a macro level. I talked about this at the start, but I just brought up the slide of our exposure, as an investment company, and geographically we are exposed heavily to Latin America and then India, with some small snippets elsewhere in the emerging world. We're very cognizant. We're not complacent of what's going on in the Middle East. We've seen this many times before.
We know there are the first-order immediate effects of these things as commodity prices spike and people look at the most obvious things. There's second and third order, depending on the longevity and the depth of this situation as it feeds into global macro inflation, interest rates from a holistic point of view, but also on individual markets. I guess what we can say today, being close to our countries and our companies of focus, is that we're in a relatively good position, and it's all relative in a world that we live in. Latin America is a strong point, and Brazil specifically. It is a sizable commodity-producing country, both food and hard and soft commodities. It is benefiting obviously from spike and it's well-insulated from a lot of the issues given its geography.
What we've seen is the Bovespa being one of the most impressive or best performing markets year-to-date. Also, the BRL, the local currency, I think as of today it's up about 10% versus U.S. dollar year-to-date. I was just reading about BlackRock, Brazilian ETFs are seeing record inflows. Some of these are read-across from what we are and exposure that we have, but some of them are actually fundamental, as in the BRL. We are directly exposed via Creditas, Solfácil, Nibo, to the local currency. It's a nice tailwind for what we do. We're not a macro fund, but we do take the macro benefits when they come, so we're well situated right at this time. We're watchful of countries like India who are net importers of commodities.
Through the prism of all our companies, we see no issues to share with you to date. We have some small exposure in the Middle East via Abhi, mainly a Pakistani company, a small growing part of their business with no issues to date. I think geography, geopolitics, we feel well positioned, we are watchful, and we will continue to share as we go. Getting on to Creditas on a micro level, we're swapping back and forth between macro and micro because it's that kind of quarter. What you're seeing at Creditas is, as I said at the start, we're liking the compounding nature quarter-on-quarter-on-quarter of both news flow and performance. I think the loan portfolio year-on-year growth, we started talking about this early last year, how it's starting to accelerate, but nothing's real until you see it.
You're seeing the acceleration of the loan book to nearly 20% year-on-year as of Q4. I expect that to continue into Q1. That feeds into revenue growth. Probably as exciting, something that we didn't predict when we started talking about Creditas return to growth status back at the start of 2025, was the efficiency drive and the second-order benefits we're now seeing from AI and it becoming an AI-first or native company when it comes to a lot of parts of its business. That's really driving elements like the CAC falling, and we're seeing more growth versus costs. Revenue growth should exceed costs. There's a lot of positives starting to feed in there, and which we'll get into gradually over time.
We share some metrics here around origination growth being 2x versus the percentage growth in OpEx, which is very nice to see. This on AI, what I'd say here is we're kind of putting a flag down this quarter. We're starting to share on AI. Alexis talked about Juspay and its initiatives. I'm seeing it personally through Creditas, really around the CAC, the customer acquisition cost, which was running at 20% of originations only a few years ago. It's now fallen below 10%, so record low levels. A lot of what they're doing is around collateral underwriting, their go-to-market, customer service, fraud. You're seeing the same in Konfío in Mexico. Where these things become real and where we can start sharing, get excited, and get you excited is when they start to hit the numbers.
The CAC is one example that Creditas shares openly with the market. The operational efficiency, where we've got 2x growth in originations and only 25% of OpEx in the last two years. Finally, the headcount, which peaked at over 4,000, is now below 2,000 and moving. There's a lot of nice trends we're seeing here. Excuse me one sec. Yeah, a lot of nice underlying trends that we're seeing from the AI-driven efficiency drive, and this goes well beyond the top three companies in our portfolio. Moving to the last slide 14, just to wrap up, what would I say? Very similar to what we said in previous quarters with some tweaks. We like to be consistent and evolve our messaging. Nothing too dramatic, but it always comes back to portfolio. We're very happy with our portfolio.
It's a very focused portfolio. Its cash flow profiles are very positive there, getting to that neutral position and then moving into positivity, growing again. We want growth in this environment. Efficiency drivers are kicking in some names. You get nice jaws starting to evolve, but they're early and raising fresh capital. As Alexis said, new marks for Juspay, for Creditas. Best-in-class companies raise capital in size in these markets. I think the exit is something that you're going to hear from us again and again and again because we're very happy and proud of the fact that we're delivering them. They're hard. We're delivering them at the right price. You build that cash pile, you strengthen your balance sheet, and then it's what you do with it.
I think so far our experience has been around focusing on debt and looking at our shares and looking forward. I don't see that being too much different. It's just a matter of which we prioritize and when, with what cash balance that comes at us and watch this space. We will be communicating, but we get what we should be doing. We're listening to the market. It's obvious. Finally, pipeline, I think there's a long-term story at VEF that continues. We are well situated in the world of emerging market fintech, well connected. We're seeing a lot of good companies that we would like our and your capital in. There will be a time for that, and we're positioning ourselves for that always. I'll stop there and very happy to open up for questions from the floor.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question from the line of Linus Sigurdson from DNB Carnegie. Please go ahead.
Thank you very much, Dave, Alexis. Hope you're good. Starting with a question on Creditas and anything you can say about the growth outlook. I mean, Sergio talks about accelerating to over 25% this year, and I think you wrote 25%-30%+ in your presentation today. How much of a, say, blue sky scenario is this? Rather, how should investors think about the visibility on this number? What are the main moving parts on the revenue side?
Yeah, no. Hey, Linus, thanks for the question, and it was good. We had Sergio in Stockholm. It's good to have him out there meeting people like yourselves and telling the story. He does talk a range in fairness to him, 25%-30%.
I think 25% is a level he would think he can achieve, and 30% is a level that he wants to aspire to in the current environment. I think he'd rather do multiple years of compounding at these levels, not speaking for him, but just getting the read from him, as opposed to accelerating to 50%-100% growth given what they did in the past and burning to get there. We'd rather do it on a cash-neutral basis and nice sustainable, because that obviously feeds into an IPO narrative where you've got compounding growth that seems logical and forecastable to the market as opposed to highs and lows in those trends. I think that's the way he's thinking.
I think if you look at the year-on-year growth of the loan book into Q4 at, what, 19%-20%, and just keep on moving up quarter-on-quarter through the year, you can see how you go 20%+ in Q1, I'd like to think. We'll see on how that extrapolates. I think the caveats here, Linus, are everybody's going to caveat everything with global geopolitics and macro, and if that turns or changes, it could change everything everywhere. That's just one caveat that's natural. The other is around Brazil interest rates staying high. We had our first 25 basis points rate cut earlier this year. We were hoping for more, but I understand why the Central Bank of Brazil held it a little bit higher for longer, given what's happening in the world and the risks to inflation.
In Q4 in Brazil, we have elections, which are always interesting, to say the least, with far left and far right going off against each other, which is the natural order of play. It can get a bit noisy and nuanced in Q3 into Q4. Things may slow down before they pick up again. There's a few caveats here and there, but given everything we and he sees through the business, I think he's confident enough to go out with those numbers, and he wouldn't say them unless he thinks he could achieve them.
Yeah, that's good color. I just wanted to ask on, with Creditas and Juspay now our latest transactions, I guess Konfío will be key here in the next coming quarters in the sort of 2026 story. Could you just double click a bit on operations and how you think about the outlook for this year in Konfío?
Yeah, no, it's fair. I think there's many ways of looking at the first part here, what you said. There's many ways of looking at what's important and what's key for this year. Obviously, for us, the performance of Creditas, Juspay, Konfío, and then the others is all key. We're less likely to see a markup in Creditas or Juspay, given that they've just raised, even though one never knows. Konfío, I think, is where you're leaning on in that regard in terms of mark-to-model or it raising capital. To answer your question specifically on Konfío, it is business as usual. They are also accelerating growth like Creditas. They didn't reach the 20% highs that Creditas got to from a near no growth at the start of last year. I think Konfío, from memory, got to 15%-16% year-on-year growth.
They would be in a similar trajectory or aspirational category to Creditas in terms of growing the loan book in that 20%-30% in 2026. Margins are healthy, and they are actually cash flow positive on the bottom line, so they're building a bit of cash. It's nicely self-sustaining. We always allude to the bank license, which is an ongoing process. We like the fact that they've been given out in Mexico to many aspiring entities. We like the fact that Konfío is towards the top of the list, but it's very hard to put a mark on when it happens. The underlying business is in rude health, and I'd say it's just tracking Creditas, but maybe three, six months behind in terms of getting to that growth level.
Great. Thank you so much.
Thank you. We will now take the next question from the line of Stefan Knutsson from Redeye. Please go ahead.
Afternoon, Dave and Alexis. Hope you're well. Just a question on the balance sheet. I see now that after the recent transaction, you're close to have a neutral situation in the net debt. Maybe you are one exit away from being able to be deploying capital again. Just hypothetically, if you were to do another exit, how would you prioritize the capital that you would gain?
Yeah. No, hey, Stefan. There's different ways we can deploy capital right now, and let's be honest, I'd like to get rid of the debt. I think that's the most obvious thing. We shouldn't be funding long-term, long-duration private assets in emerging markets with short-duration SEK debt. It served its purpose, and we're very happy and proud of the Swedish market supporting us with the debt. We're down to a manageable level that we'd rather pay off, and we don't want or need, I think. We may need the debt market again in the future. I would edge towards the prioritization of that, and given the small amount of debt that it is, it's very hard to pay down some, but not all. You got to roll it all or you pay it all. I think it's a little bit binary.
If we had a decent other exit, probably that, but don't keep me 100% on that. You look at your own shares. It does hurt us. We are shareholders. We work very hard for this company. We see how our portfolio is doing. We report everything we see to the market. We get exits at NAV. The market is what it is. If the market isn't going to reward our shares with that delivery and those exits at NAV plus minus, we'll just do it ourselves and buy back our shares all day. It's very hard to look beyond your shares. The easier answer in a normal world where I had all the choices, you do a bit of both.
Given how debt markets work, it's probably you lean into your debt, clearing it before you start to eat away at your shares.
Perfect. Regarding exits, how are you thinking strategically on portfolio concentration? We've seen you exit a few of your smaller holdings, concentrating into the top holdings. Is that the way forward or are you also looking to maybe decrease the size of the exposure for Creditas that is over 50% now?
Yeah. There's a little bit of strategy here and there's a little bit of the markets give you what they give you as you try and do a lot of things at the same time. Strategically, we are definitely trying to shrink and focus the portfolio. We'd rather have a small amount of winning names. That's good for us from the opportunity cost of our time, and it's good for communicating to the market. Within that, I don't mind. I'm very comfortable with concentration, once concentration is on quality, where I believe it is today, so that makes me sleep well at night. We'll continue to try and clean up or exit positions from the smaller names for sure.
On the top names, they're just constant work streams where we may have done two exits from Juspay in the last 12 months, but they could have easily been Konfío or Creditas or other names had the market and the opportunity been there at the time. These are work streams across a number of names that are leading us to a smaller number of holdings, a more concentrated quality portfolio, and with excess capital that comes in being delivered to deleverage the balance sheet and buy back our shares at these beautiful levels.
Okay. Very well. That was all for me.
Super. Thank you.
Thank you. There are no further questions at this time. I would now like to turn the conference back to David Nangle for closing remarks.
Yeah. Thanks, Andrea. Thank you everybody, as always, for joining us on this call. Very happy what we're seeing at VEF, irrespective of what is a very noisy and volatile world. We will continue to deliver and focus on all the right things, and we'll continue to listen to our investors and our partners as we go. I'm looking forward to talking to you again next quarter. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.