Welcome, everybody. VNV Global, Björn von Sivers, Capital Markets Day. We have welcome people in the room, and then there's a bunch of people also with us on video. So, welcome to you too. We have a, I think, a great schedule. This will be a very good opportunity to meet with many of our portfolio companies, also including some which you haven't met before. Or I think some of you at least haven't met before. I mean, so Voi and BlaBlaCar, it will be fantastic to have updates from here. But, there's some like Breadfast and BukuWarung. I don't think some of you, all of you have met them, so this will be a good opportunity to hear those stories told. This is how the schedule looks like.
We'll, I'll do some introductory, I'll say something now, and then, and then Voi, Breadfast, BukuWarung, short break, and then another couple of companies, three companies, and then we'll have some drinks outside. So that's the afternoon. I think the schedule is, is as we have communicated it before. Unfortunately, Nico from BlaBlaCar had to be at the desk for some stuff that we're excited about. But we are also very excited that Piotr is here. Piotr has been with the company as long as we've been invested, and there'll be a great opportunity for you not only to hear Nico Brusson talk about this company, but to get a feel for some other people in this sort of very important company for us. But us lot, I mean, in case any of you don't know what we do, this sort of summarizes that.
Network effects, of course, is the common denominator among all the companies in our portfolio. Network effects Gett you to this wonderful winner-takes-everything, kind of place, where you one can nearly sort of dream of the word monopoly, which is not good to say, but it's wonderful to own if we are honest with ourselves. That's what we look for. And a very important characteristic to have when you look, when you invest into companies with network effects or with the ambition to enjoy network effects is that you, you can be patient. So the presence of permanent capital is especially important when this is the focus area, in contrast to maybe e-commerce and other things where you can get revenues and maybe even profits going very quickly. But barriers to entry are low, so they can sort of disappear quickly in network effects.
Barriers to entry are very high, but wonderful when you are at that stage, but it can sometimes take a long time. So permanent capital is important. And us lot here, I think as throughout the years we are, we feel we have a capacity to take risk, but with a very, very sort of disciplined eye on the risk-reward ratio. It's okay to take a risk if the upside compensates for it. This is how the portfolio looked like, and there's been some changes. I'll come to them. I think it's a familiar picture. Again, today you'll get an opportunity to meet a lot of these companies, which I think you'll enjoy. I certainly will.
What we've been active at over this past even year, I think it's fair to say, has been with a very sort of we've had a very disciplined, I think it's okay to say, eye on our debt maturing. Some debt is maturing this month, but also the bigger debt piece that we have outstanding is maturing in January 2025. So we've been hard at work in trying to monetize parts of the portfolio in order to sort of pay down the debt. So we go to zero debt and we're happy about two transactions that we have done over this past year. This is the first round where we sold the portfolio of assets to Verdane here in Scandinavia, but really centered around Booksy, the Polish booking platform for the beauty industry.
So that was sold for $52 million, which is a 12% discount, in cash, and that has closed. We can get a little bit more. We can get up to $58 million if two earn-out pieces sort of fall into place. We feel very confident that one of them will, so we'll get some of that, and then the other one takes a little longer, so it's a little bit in the future. But if you count $58 million, we basically sold it at where we had it booked at NAV, which we feel is also apart from raising cash, it's also important to show that the marks we have that sum up to our NAV is good.
'Cause we're increasingly frustrated that our share price values this NAV at a very large discount. It's coming in a bit from this. This is the mark of that portfolio in our share price at the day, when we announced this. So that was the first exit. The second exit is one which we have signed but not yet closed. So this is us selling Gett. We own roughly half of Gett . The whole company has been acquired by the Pango Pay and Go Ltd. of Israel. It's a company called Pango. So we agreed to sell Gett for $83 million to us, of which $70 million comes on closing and another $30 million Gett paid out over a couple of years.
So that extra payout is not, in contrast to the other transaction, which is contingent on some stuff happening at Booksy, this is not contingent on anything. It's a security for the indemnification that we provide to the buyer that, for example, tax and legal matters are as they, as we've said they are. And we feel very confident that that's all good. So we expect to receive the full $ 79, and then $ 13 over some time. Also, well, an 11% discount to where we have Gett marked in our NAV, and still a big difference to where our share price had it was pricing it, so roughly a 50% discount. Now, I think our stock came up a little bit on the back of this signing this transaction.
I think when we sometime in later summer, I think it's fair to estimate that we'll also perform a closing. It's currently with the Israeli Antitrust, but it's not really a monopoly issue. This is the parking app buying the ride-hailing, so it doesn't really alter competition, which is the big focus of, well, any antitrust institution. So post-selling Gett, our portfolio will look like this. So Gett has disappeared. BlaBlaCar becomes even more important, which we feel very good about. We love this company. It's the one company, I think, in the portfolio which is the most reminiscent of the Holy Grail of Classifieds, where you get super high barriers to entry, very fragmented supply in the marketplace with a very fragmented demand.
That's sort of the checks the boxes of the potential of very, very sort of high, high barriers to entry and winner-takes-everything kind of model. I mean, we have that present in all our companies. We love all our companies, but in terms of sort of, you know, the one that's most reminiscent of that Holy Grail of Classifieds, I think BlaBlaCar is that one. And it's roughly half the portfolio or the NAV after these transactions. And then there's also some cash now upon closing of Gett and then cash that comes in over the next couple of years as we get the rest of the payment for the Gett transaction. So, we were asked to include this.
What this shows is our pro rata share of the top of our top 10 portfolio companies. And so this is the revenue net to us, which has grown about 30% on an annual basis over these past years. And we're currently at about just under $200 million revenue to us. And if you also look on the earnings side of things, a little bit more than half is EBITDA positive. If you include Voi, we're that adds another 10%. And the reason why Voi is great is that we should really talk about EBIT. Voi owns and operates these scooters, does it super efficiently, but nevertheless, there's something that happens between EBITDA and EBIT, which makes this EBITDA positive, we expect it to be EBIT positive.
But you get the picture that our portfolio has strong revenue growth, and on top of that also has an earnings profile. That's really the ambition. If one is to sort of end this intro on where our ambition lies and where we're heading is to have these companies develop into not only profitable but cash flow positive. And ideally also in time there will be cash flow positive net to us. So we get to that situation where we have the big parts of our portfolio provides a dividend stream to us, which will allow us to pay our OpEx and not be stressed about that, but also eventually to have some cash to invest into new companies. This is how we had it back in 2018.
The last year we had Avito. We're happy that Avito's gone now with all the stuff that's happening over there. But that last year, I think we had like $13 million of cash dividend to us, which would then pay for OpEx and also allow us to fund actually two Vois. So that if one is to talk about where we're heading right now, I feel that that is very much the focus. I think companies like ours, listed holding companies, do very well when it has sort of that kind of financial stability. So that's a very, very clear goal.
And then of course there's stuff here that will, as BlaBlaCar at one point of time maybe leaves the portfolio, there's stuff here that will then come out of the shadows of BlaBlaCar, much in the same way that BlaBlaCar was in the shadows of Avito, a few years ago. There are companies here which when we have the capital markets day next year or the two years after, will sort of have come out of the shadow and be the, be the next BlaBlaCar. And then there's a bunch of stuff in this part which, I'm, I'm very confident will first make it here, but then eventually make it here and become big players. I'm, I'm very confident that here there, there, there's stuff going on here that we see performing very well and that will eventually sort of migrate to become something big like that.
Anyway, that's all I had. I thought that was a good sort of backdrop for the afternoon. With that, I'd like to hand the microphone to.
Optimistic, Per, on this CMD than the one in September. I know you're always optimistic, but less stressed now than then. No. So as Per alluded to, I think we at Voi have never felt as convinced and comfortable with one, that our industry, the urban mobility, micromobility industry will be very big and very profitable. And two, that Voi will win, for a few reasons. One, we see that our products now are becoming really good. I mean, the e-scooters have been good for a couple of years. Now we've also cracked the e-bikes, so we have a really good e-bike. The e-bike market is at least as big as the e-scooter one, just less penetrated.
two, regulations have matured a lot. We don't see the same pain points as we saw in the early days around parking, around over-competition, over-supply, and so on. Three, competition, competitive pressure has come down a lot. What we thought would happen in the first two, three, four years took five, six, seven years. But now there are very few competitors left. And the fourth thing is, yeah, around profitability. You will see today that we, yeah, we have delivered on our plan on profitability, even over-delivered, which makes us, and I know Per as well, yeah, we sleep much better in the nights now. Yeah. And I'm Fredrik, CEO of Voi, also founder, and Mathias, CFO and deputy CEO is here today as well and will join during the Q and A. So this is really our vision.
It comes from us thinking that transportation in cities all over the world, yeah, perhaps even more in the U.S., but also in Europe is quite messed up. We give a lot of space to cars, 50%-60% to parking, parking spaces and roads and so on. They are bad for the environment. They are dangerous. They are, yeah, they're involved in pretty much all fatal accidents. And that's more like on the philosophical, ideological level. What we see also is that all European cities between 2030 and 2035 have said they, have said they will prohibit combustion engine cars in city centers. Stockholm is actually the first big city out from 31st of December this year when they are prohibiting gas and petrol cars in the CBD district, so in the very center of Stockholm. But most other European cities are following now over the coming years.
And then we think a better solution for urban transportation is light electric vehicles such as the ones you see on this page. We started with e-scooters, now e-bikes, but we have built a platform that's very vehicle agnostic. So the software data and operational platform can handle any vehicle, so we can tap into other vehicle form factors and combine that with public transportation, with BlaBlaCar, with ride-hailing and so on. So people shouldn't need to have and own their own car when they live in a city. If you don't live in a city, like I grew up in Östersund, far up in the north, then you of course need a car. But yeah, I think in Sweden it's 60%-70% of the population is living in cities. And now it's as of the last five years, now it's actually six years.
So we founded Voi in 2018 together with VNV and some of the Avito guys, who are the first investors. Now we have done more than 250 million trips in more than 100 cities all over Europe. We focus on northern, western, and southern Europe. We draw a line kind of currently from Finland, yeah, east of Germany. So focus on the richest countries in Europe. We're number one. We have more than 100,000 vehicles in operation now. And we think we're just getting started. So the e-scooter market today, we have seen that the number of e-scooters is not growing a lot over the last years. It's rather consolidating. But we see that on the e-bike side, there is only, I think, a 5th or a 4 th of the number of e-bikes out in European cities compared to e-scooters.
At the same time as we know that many user groups, especially older users, prefer the e-bike. And we also know that city politicians look upon e-bikes in a, yeah, more favorable way, than e-scooters because it's bikes. While e-scooters is more something new, something techy, a bit scary. So we expect a lot of growth, on the e-bike side over the coming years. The team has been around for quite some time now. So it's me, it's Mathias, CFO, who was CFO at, Modern Times Group and Veoneer before. Antonia's leading HR. She was leading HR at EQT, Bambora, Thomas, General Counsel, 30 years of General Counsel experience. Hans and Christina leading the, leading the markets organization together with Stephan in Germany. So most people now have worked with each other for four or five years, and the company has existed for a bit more than six.
So productivity and just like how fast we can work together and make decisions have just grown exponentially. So we feel very, very good about the team now. On the financial side, we had massive growth from yeah really 2019, 2020 to 2022, a bit slower in 2022 and 2023 since we did a big turnaround from heavy focus on growth towards profitability and cash remuneration. And that of course shows up on the top line numbers. From next year, we will start to grow a lot again, because now we have cracked both the gross margin side as you see here. We've improved the gross profit margins from 31% in 2020 to yeah 49% in 2023. We continue to yeah increase margins even more this year than what we did last year at the same time as we have cut even more costs. So we're getting proper operating leverage.
And as you see on the right-hand side, group EBITDA margin for the last 12 months was 7%. And when we look at the full year of 2024, it will be significantly higher. And as Per alluded to as well, we aim to be EBIT, EBIT positive, EBIT profitable. And that for us is, since EBITDA is a good proxy for operational cash generation. So then we're starting to get, yeah, quite some buffers, with which we can invest in more vehicles, yeah, raise asset-backed debt financing for the vehicle side and so on. So that's, that's very, very, yeah, hopeful. I don't know if I need to talk that much about this anymore, but the early days of the industry, there was a lot of, yeah, I would call it, almost chaos. So much venture capital flowed in, quite a few bad operators, no regulation.
So issues around parking, safety, anti-social behavior, and so on. I think now most of those things, especially when we talk to politicians, are fixed, which has put our industry in another light than where it was, yeah, the first years when it was a bit chaotic. The number of competitors is down to, as we see it, it's really only two real competitors, then a few very small ones. And that of course also helps, then it's easier to collaborate and work with cities instead of just fighting each other, yeah, bloody in discussions with cities, with users, and so on. So I think you should know there has been a lot of, yeah, bad skeptical news about our industry over the first years. You will see a lot of positive news this year. You will see us and Lime coming out as profitable, perhaps someone else as well.
You won't see a lot of bad media around parking issues, safety, and so on. So I think the tide is turning. We hit some kind of bottom last year when some of our competitors went bankrupt. They were forced into mergers. You will see a lot of positive news over the coming years. Eventually, Lime IPOing as well, late this year or next year, they have said, and they will come out with good numbers. Yeah. So a lot of the critique we got the first years, that, yeah, most of those are really fixed now. The first one was around us obstructing, taking up public space, cluttering the streets. If you go out now in Stockholm or in most of our cities, we have designated parking spots in Stockholm. We have got, I think, 4,000 from the city.
So every bike rack is a digital geofenced parking zone now in Stockholm, which is great. Lifetime of the vehicles, the latest vehicles last five, six, seven, eight years. So we have vehicles out now that we put on the streets in 2020, which are fully depreciated, but still in very good shape. And that's the 2020 model. The 2024 model is of course one, two, three steps more advanced and more robust. Yeah. Gross profit we talked about, target audience and user groups. Sometimes I hear it's only kids using them. That's not true. The main user group is 25-34 years old, young professionals. One of the, yeah, user groups with the highest purchasing power that's out there, which is a very good user group to grow with.
What you also see is that every year, when old people, like, yeah, when old people stop using mobility at 70, 75, 80, 85, they haven't been very eager on using our type of service. But then 15, 16, 17, 18 year olds start to use mobility and they are very eager to use our service. So we see a positive demographic kind of tailwind through that. E-scooters are safe. We have gotten the incident numbers down. So slight or serious accidents, from it was around 55-60 per million kilometers ridden in 2021. Now in April it was down to 20. So we've cut it with 67%. Better products, more education, better roads, and so on. And the last one here, that e-scooters and e-bikes don't replace cars, they do.
When we go out and talk to our users, we see that both, yeah, they both answer that they use cars less, but also that they combine Voi with public transportation to a very large extent. In Stockholm, the number is as high as 60%. In some German cities, even higher. Yeah. I've already talked about the market, so I won't go into this. The only thing is we have moved from an unregulated environment to a more licensed, tendered, regulated environment, which we have been advocates for since day one. 'Cause that sets more clear, yeah, playing rules. And then we can invest longer on a longer time horizon and work together with the cities and other operators and public transport and so on, compared to in the early days when it was Wild West.
As a consequence of, yeah, both us having invested and built, both user products, but also city products, so to handle, things such as parking, as I talked about, but also that the number of competitors have come down. When we applied for Paris in 2019, 2020, there were 25, 28 applicants. Then Paris had all the power. They could tell us, do this, pay that, you should be happy for being here. But now in many of the recent ones, then there are only one or two competitors left. So then the power balance shifts, towards us instead. And also, of course, drives our market share up even more because most big cities, they want two, perhaps three operators. And when there are only two or three operators left, yeah, it makes it easier. I think, pretty much last one.
So we started this turnaround in 2021, where we saw that capital started to become more expensive. So we've been through three major, yeah, reduction in force processes where we have both taken out a lot of G&A cost, but also halved the number of FTEs in the company. So we were a bit more than, I think, 450-470 white collars end of 2021, early 2022. Now we're down to around 200. So we've taken out pretty much 60% of the workforce, but managed to keep most of the high performance. So the talent density is just much higher now. And people have worked with each other for a long time now, similar to the leadership team. So OpEx is under control now. And we also see that with every vehicle model.
So this is a slightly complicated graph, but it says V3X was the vehicles we put out in 2020. V5 was in 2022. Now we're on V7. And we see that with every vehicle model and when markets are going from free markets to licensed and tenders, we see that the net revenue per vehicle per day, this is a percentage of the Voi, Voi average, last year is going up. So it's good for us with new vehicle models. That's why we, why we wanna invest in a lot of new vehicles next year. And it's also good for us when we move from this unregulated free market to more regulated, clear playing field, longer investment horizons. So now, yeah, we're really aiming at 2027, 2028 now, where we at least, yeah, want to double the size of the company and generate significant both cash flows and EBIT.
So we continue to work together with cities and regulators to kind of stabilize and build a great regulatory environment. We will continue to see some consolidation, but now most consolidation is done. There will perhaps be one or two bigger deals more, but most of it is done now. And there won't be, yeah, I can kind of bet Dennis' fishing hat that there won't be an incumbent or a newcomers into this space, because no investors wanna fund and catch up on the $567 million we have invested and the $2 billion that Lime has invested and the $2 billion that Bird invested before they went bankrupt. Build out with new vehicle form factors. We talked about the e-bikes over the coming years. We will focus on e-scooters and e-bikes, perhaps try out some, yeah, some more form factor.
The fourth one, as I said, I'm very convinced that if VNV has valued us at, I think around $400 million now or just below, I wouldn't sell Voi for less than $2 billion. Thank you. [Foreign language].
Yes, you don't have one.
Okay. [Foreign language] .
Yeah, sure. [Foreign language] .
Good.
Thank you for that presentation. We're gonna run a Q and A. I'll kick off with some questions, but please, everyone in the room, feel free to just raise your hand and Katherine will hand out the microphone. We thought we'd start off with one question that we ask all of our companies here presenting here today. If you look back at the last 24 months, what are your biggest learnings and takeaways from going from hyper growth to profitable growth?
All right. Hi, thanks. Happy to be here. Thanks. I mean, there's so, so many things that you learned. I think the, for me, I think the major thing is that, you know, you can always act faster and more, because when it starts to become apparent what needs to be done in a company, time is not on your side, so you just get on with it. I think then the second thing I think is also that, moving a young and ambitious organization from having abundance of capital and disguise is the limit to something more that resembles kind of the hard work of a normal company, so to speak. It's a huge undertaking to bring everyone with you in on, on that journey. That should not be underestimated, I think.
Agree.
Good. Yeah. Feel free to raise your hand if there are any questions. Otherwise, I'll go ahead with one more here. So what, you know, you touched upon this earlier in the presentation, but what are you hearing today from regulators, cities, municipalities that's different from what you heard in 2018 when everything started, so to speak?
In 2018 and 2019, the conversations were very much around, will this be allowed? Should this be allowed? Now the conversations are very much about, okay, we want this in our city. How can we set that five, seven, 10 year plan? Similar to, yeah, because cities, city planning is like inherently slow. It takes a long time. But now we're rather part of the conversations with public transport, like city planning. They ask us for input using our data on road quality, on where to put bus shelters because we have so much data.
So it's much more constructive. Yeah, we have access to the actual decision makers. Like here in Stockholm, the traffic mayor is very, very engaged. Tomorrow I'm meeting the mayor in London so they can, he's also, he cares about transport in London. And he probably did that before as well, but then we were not at the table.
I think we had one in the audience.
So a lot of the growth is coming from bikes. Do you, when do you think you'll have a sense of the unit economics of the bikes as it relates to the scooters?
Very good question. And for those of you who don't know, I think Mr. Richman here is a board member of Voi.
I think every single, I mean, if you go back a couple of years, I think the unit economics of bikes were not really there. I think the sturdiness and the total cost of ownership of the bikes were not really as strong. I think what you see now with the last couple, you know, one, two years, and particularly the new generation of e-bikes we put out this year, we get unit economics to be in good cities as strong as the e-scooters. I think we're still now looking at, of course, the unit economics and cash flow generation in relation to the CapEx because they're slightly more expensive. But I think over the long term, there should be no difference between bikes and scooters.
Yeah. And to add to that, I met some people in New York a few weeks ago, which are big investors in VNV. And I said, you're not allowed to hate on bikes. You're allowed to hate on scooters, but not on bikes because bikes is kind of holy. It's sacred, for Europeans and European politicians, which means, there were quite strict tough regulations against e-scooters in the early days. But on bikes, we don't see that because if you say, if you say to a politician, like, we have 10,000 bikes to put out in your, average high city, do you want them? They will say yes. While if you say we have 10,000 e-scooters wanting, want them, we want to put them out in your average high city, they will say hell no.
I think one, one, additional comment there, I think to touch upon what Fredrik said, I think one of our UK recent wins, in, in Solent, Southampton Portsmouth, they're actually the city is paying us to deploy bikes. So the whole tide has turned. I think that dynamics we will see increasing more over time as well.
Thank you, Jörg.
Yeah. So a couple of questions from me. So, firstly on the asset-backed financing of the fleet, if you can describe that in a bit more detail. And also with the fleet expanding next year at a faster pace, will that be completely asset-backed or how will that look?
It's a good question. I think if you look at the financial profile, these assets should have no problem whatsoever, of course, to get proper asset-backed financing. I think what you still see is a perception of the industry. Fredrik talked about, you know, the Birds of the world and the Tiers of the world that pretty much went bankrupt.
So I think there is still a level of, you know, perception around the industry what that credit people are a little bit concerned about. So I think it's TBD if we manage to do proper asset-backed financing for this year or for next year's CapEx. But the cash flow generation is amazing. I think you didn't see it here on the slides, but when you would put a scooter out in one of these, you know, tendered cities, it takes less than half a year to get the CapEx back for that scooter. So that's how strong cash generation we have. And sorry, what was the second question?
No, I have two other questions. So first on the, we obviously seeing some consolidation, some competitor, competitors going bankrupt. So you talked previously about maybe being active yourself in consolidating the industry. Is that now off the table? And then the last question is, we've seen the margin trajectory both on, you know, with central costs and also the gross margin coming up. Where do you think the sort of steady state margin can be in this business?
Well, if you take the first question, I think, I mean, as you see the financial profile and operating leverage that Fredrik talked about, I think for us right now it's a matter of scale. I mean, you can add twice as many vehicles and you don't really have to add any fixed cost at all. So I think, we spent a significant amount of time last year trying to look at acquisitions, so scale acquisitions. I think most of those, or all those assets were pretty bad shape, I think, way over leveraged and not very well run.
So we basically decided together with VNV and the board and said that, let's not go forward with those because the dilution would be huge and pretty risky transactions as well. We're still looking at consolidation, of course, but right now I think when competitive pressure's gone down so much, the slower pace and step-by-step approach is probably most value creating. There may be some small bolt-on acquisitions that we may do over time, but in strategic areas where we want to grow, but and on the last question there on margin long term, I think, I mean, given that now markets become more and more protected, it's very difficult to, I mean, I used to be a CFO in listed companies and so putting out some kind of long-term guidance and so on is always tricky.
So I'm always concerned about that, because we don't, you don't really know. But if you look, I mean, right now, I mean, we, we, you know, the only in this scale, our profitability is going to be pretty strong. Gross margins, I think we will, we are right now at 50%. They should be north of 60%, maybe up to 70% over time. EBIT margin, there's no reason why we shouldn't get to 20%+ EBIT margins. But obviously, I mean, the future is the future, so it's difficult to, to write that in stone.
I think we had a question over here.
Thanks a lot. Just on this rather positive outlook, what kind of visibility do you have in terms of maybe not regulation, but on, on upcoming cities that you can expand to and so on? So to give us some kind of more concrete visibility into the ambitions.
The reality is there is no shortage of cities to expand into or within. The shortage now is more vehicles. We could, we could easily probably almost double the fleet size in existing countries, regions with some small expansion that we could do from the existing countries. Yeah, that would mainly be in central, central eastern Europe then and potentially, yeah, Middle East.
I mean, there, there are really two dimensions at play here. I think first dimension is that there is a lot of cities now that, that get less and less competitors. So Lime and Tier of the world are pulling out of cities where we are number one. So you need to kind of supply more for, for that loss of the, that loss of supply in the market.
And then you have the underlying trajectory of, of growing demand as well. And I think connecting also to what Bird said, I think it may be difficult to see that this is a network effect business, but I mean, the reason why we're number one in, I think around 85% of all the cities that we are present in. And one of the reasons for that is that we have found the formula of how to be number one in rides market share. And when you're number one in rides market share, then you get the organic flow of the fleet to rebalance organically to match supplying demand in the cities. And that's extremely difficult for, for someone else to come in. I mean, in Stockholm, I think we have, you know, 70% rides market share probably, or even more in some days.
It's almost impossible for someone to come in and break through that. So even without, you know, a tender one, two players now, it's in this essence three player market here in Stockholm. Yeah. And we have a very strong organic, you know, strong position.
And I now need to catch my plane to get to the mayor of London. So Mathias will take care of you the last 10 minutes.
Are there any more questions?
For Fredrik. For Fredrik, okay. If not, Fredrik, here's a fishing hat. You betted $2 billion company. Remember that?
Thank you.
Thank you. Yeah, cool. No, so just curious, since you are, indexing much more heavily on bikes ahead, and that's going to be a key driver of growth, it should be, it'd just be interesting to hear a bit more about the bike strategy going forward. So is it more about kind of building beachheads in new, in new cities and winning new tenders and new licenses because bikes are an easier sell than, than scooters? And maybe that's, you know, makes it an easier sell on the political side. Or is it more about deploying in the existing footprint? And then I presume there's a, maybe a little bit of cannibalization. It'd just be interesting to hear a little bit about the bike strategy ahead.
It's a good, good question. I think, what we found so far is that, the profitability of cities are highly dependent on this, you know, specific conditions. If you have a very strong e-scooter city, obviously e-bike may be a little bit tougher. So it's right now, it's a combination of, you know, existing cities where it makes sense.
Sometimes, like in the Solent, I think they, the city wanted to have a multimodal tender. So there's one part and the other one is that there are great cities out there that could handle just going in with bikes first. But right now, given that there is a, it's a verge of, it's all about capital allocation right now. 'Cause if you have, you know, if you raise debt to buy scooter, to buy vehicles, obviously you need to figure out so that the return on that investment is optimized as well, given the overall trajectory on in terms of profitability.
Seems like, oh yeah, one final question. Sorry.
What's the pathway to exit?
You tell me. Now, I think that this will be a publicly listed company in a few years' time. And at least that's what we're working towards, I think. If there's something happened on the way there, I think we would obviously look at, look at all those, those things. But I think that's the mindset we should have. We're trying to build a very robust, sustainable, profitable company. And then once you've done that, you have the optionality. If you don't do that, you know, exit discussions are pretty, you know, unimportant conversations. It's wishful thinking then. I saw that, Mr. or Jake, you had something, I, I'm shivering a little bit right now, but.
No, it's fine. Just back to, back to the question about the, the bikes versus scooters. So it's driven by the, the return on capital balance, the tenders and the cities you're approaching. But if you had your choice, if you just had a pile of money to spend on those two types of vehicles, like, and given sort of where you wanna end up a few years from now, how would you split the mix between the two?
That is a good question. I think ambition-wise, we would like to expand on bikes a lot. I think the restriction right now is access to capital. And I think that's, so that's you would if you had the possibility to invest a lot more in bikes with slightly lower profitability, we would probably do that any given day. I mean, just to look at London is one of the best, you know, London and New York probably is the two best city bikes, bike cities.
I mean, Lime, they did a great job in London, I think, for those of you who've been there, unregulated. So it will be regulated. So they will probably not enjoy this for that long time, but they have done a great job there and then making a lot of money in London. So there are some cities that are really good to be in.
Seems like that's it. Thank you very much, Mathias and Voi. I'll hand it over. Yeah. A round of applause for Voi and for Mathias.
Hello everyone. First of all, thanks VNV for hosting us. And thank you everyone for making it to the Capital Markets Day. Eugene is my colleague. My name is Mostafa. We are running Breadfast from bread to everything from the most basic unit in the household, which is the very basic fresh loaf of bread, hopefully one day to the most advanced unit needed by the household. So we started seven years ago, baking and delivering fresh bread to customers doorsteps at 5:00 A.M. in the morning, in a city like Cairo, one of the most populous cities in the world. We wanted to fix the broken supply chain. That's why we believe that reliability does not exist in emerging markets. And that's why we had to forget about engineering and technology and just to go back to the basics, baking, fresh, bread. Egypt is a massive market, 120 million consumers. Food and grocery in Egypt is around $100 billion and 72% of the trade is unorganized. This is how big is the opportunity.
The three founders here, myself and my co-founders, I started as the first driver in the company. My co-founder Muhammad started as the first customer experience agent in the company. Abdallah started as the first coder in the company. First six months of the company, we had to learn how to bake. Today, Breadfast is a home for more than 5,500 employees, including our delivery associates. Breadfast today is the largest online grocery in Egypt. We are running 34 fulfillment centers across four cities in Egypt with a backend of almost 11,000 square meters. Today we are also running Breadfast Coffee, which is going to be our first omnichannel consumer-facing outlet. Breadfast Coffee, by the way, is the main threat to brands like Starbucks in Egypt and hopefully soon in the whole region. This is one of my very, very favorite charts.
Paul Graham, who's the founder of Y Combinator, he tweeted about us in 2021. Allow me to read the tweet. He was saying, "This revenue graph illustrates the two dimensions in which startups are spreading into more domains than traditional tech and into more countries. This is Breadfast, which delivers bread and other household essentials in Egypt." He was showcasing the exponential growth of Breadfast. Two years later, he actually tweeted again about us. You know, the great thing that the first chart is a representation of actually almost 10% of what we achieved two years later. So since January 2021, Breadfast has grown 38x. And basically we close March at $150 million in annualized run rate revenue, revenue run rate. And as always, we are just getting started. This is our vision. Sometimes we don't like to identify Breadfast as an online grocery.
We say like Breadfast is an infrastructure company, infrastructure company started from the very basic, from the scratch. Hopefully one day again, you know, like, Eugene knows that I don't like the word super app, you know, like I like for this to happen organically. You know, like one day our customers will wake up and they really find that Breadfast is doing everything, you know, for them. On the very far left, you'll find a cloud supermarket. This is what we have been trying over the past seven years to master, running digital native cloud supermarket operations. After the cloud supermarket, you will see a virtual coffee shop. Actually today we deliver, you know, like cappuccinos and flat whites and Americanos from our fulfillment centers to our customers' doorsteps. Then you'll find a bank, which I'm going to elaborate more about later on.
Then you'll see a virtual pharmacy, a cloud kitchen. This is what we call future fulfillment point. Thanks, guys.
So I'm sure many of you are wondering today, how has Breadfast in Egypt managed to achieve this when, you know, the likes of Getir, the likes of Gorillas, Flink, Gopuff have all really struggled around the world? I think it really comes down to two things for us. In Egypt, we have a, are able to achieve like an incredible ratio between AOV and labor costs. So today that's something like 15-to-1. So think about $15 average order, order basket and a dollar, of labor cost per hour. Compare that to the U.S. or Europe where you're seeing something like $20-$25 average order values. But you know, labor costs in the $15-$20 range.
That makes it really, really difficult to build a unit economics model that allows you to scale this very efficiently. And that's actually, I think, where the trouble of our, you know, peers around the world have run into. I think the second thing that has allowed us to scale in this way has been the fact that, you know, we're operating in Egypt. We don't have a Walmart to compete with. We don't have a Costco to compete with. We don't have a Tesco to compete with. The reality is that we operate in a market 70% unorganized. And so that allows us to be, you know, very price competitive with an offline retailer from day one. And that I think has really allowed us to, you know, build something that customers really appreciate.
So not only is Egypt, you know, an incredible market from a unit economics perspective, you know, it's frankly a massive market. So today we are 120 million people. You know, that's the third largest population in all of Africa, only second to Nigeria, and Ethiopia. And you know, one of the fastest growing economies in the world. So by 2050, the IMF actually forecasts Egypt to be the 15th largest economy in the world. What that translates to is $100 billion of TAM today for us, which, you know, is a great market for us to be operating in. And it's a market that's growing, you know, 10% year-over-year. And that's forecast to happen, you know, for at least the next 5 to 10 years. So we're looking at, you know, total addressable market by 2027, $153 billion.
But I think what is really exciting, like Mostafa just, you know, referenced, is that, you know, we've built a business which is high frequency, high trust in grocery, which I think we all know is like the most difficult e-commerce sector to penetrate. What this allows us to do is, you know, we say bread to everything, and I think we really mean it. I think when you build the trust and you build the frequency in the grocery use case, it really allows you to move into all of commerce. You know, we really think that there's a $220 billion TAM for us in the not too distant future as we continue to build and expand our range of verticals. We're really proud that as of today, we are at parity with offline retail when it comes to price selection and convenience.
In fact, we are actually ahead on some of these, on some of these, points. We are really excited because, you know, the way we have built out our business using these kind of, dark fulfillment points means that it's way more capital efficient to build out and service large amounts of customers all over Egypt and, you know, eventually the Middle East and Africa. We, our typical fulfillment point is, call it 300-350 square meters. That's 10% of what a Carrefour or a Tesco in market might need. You know, that's subprime real estate that we need. So it, it can be like a basement of an apartment. It can be like an old former garage. We don't need prime real estate to access and tap into customers.
And so what we're betting behind and what we're really seeing in our business is that this is a way more capital efficient way to modernize grocery. And so when we think about the 70% of grocery that's still done in unorganized trade, we really believe that we're gonna win the race in Egypt and across the market. And I think this is something you'll hear a lot more from companies in emerging markets in grocery, moving forward. We're really proud of the private label that we've built over time. As Mostafa said, you know, he was the first baker in the company. You know, we started with three SKUs in bread, but we delivered something that customers really had a lot of passion for.
That meant we can, you know, really expand that brand permission and move beyond bread into things like everyday essentials, like your pantry items, into farmer's market. You know, our eggs are kind of considered best in market. These are all private label products. You know, we have a really, a range called Really Good, which is our ready to eat, ready to cook range. But that's actually extended into things like Sway, which is our household care and cleaning range. Combined, each of these brands on this page contribute 35% of our monthly GTV. And so that 35% is actually in line with some of the best European retailers today. So you think about a Tesco, think about a Sainsbury's, think about a Carrefour. We as an online grocer have actually managed to achieve this.
You know, referencing some of our peers around the world, you know, private label was always meant to be a bridge towards like, you know, amazing profitability. They really struggle to do that. People ask us why. For us, it comes down to the fact that we started as a product manufacturer from day one. We never promised like quick 10-minute delivery. We built trust in product. Then we deliver, we offered a really great delivery service afterwards. So we had that brand trust to do that. I think customers generally find it more difficult to trust like a logistics supplier or a company that is a logistics supplier in their head, to be, you know, baking their fresh croissants. What this all really translates to is a GMV or dollar retention curve that, you know, we really think is the best in industry.
As you can see on this slide, you know, Breadfast is head and shoulders ahead of companies like DoorDash, which is considered best in class, Uber Eats, Instacart, and Gopuff. Really what's happening here is that, you know, as we build selection, as we increase service quality, as we, you know, open more locations, we're actually able to deliver a better customer experience. And customers really, they reward us for that. And so by month 20, we are looking at close to 100% GMV retention, almost unheard of in this sector. And you know, again, why? It's because like there is really no alternative in our markets. You know, grocery is still so far behind that when customers get a product that, you know, meets their needs, that is designed for their tastes, right? This is a market that has always relied on imported products.
They really respond and, you know, responding to like a champion of Egypt and the region that, you know, really reflects their like habits, values, and beliefs. And so this is something we're really proud of. Hand it back to Mostafa now to talk about Breadfast Pay.
Yeah. So, as I mentioned earlier in our vision slide, the bank part. So this is an exciting one. FinTech is always a use case, and the use case is built on frequency, retention, and trust, and a real use case, which is shopping for grocery, right? So, like a long time ago, we've developed our closed loop wallet. Basically, cash on delivery in Egypt is still massive, and 80% of the population is still underbanked, not because we don't have banks, but like, you know, the, the process is very, very tough.
What's interesting here is that by time we've developed the most frequent, closed loop wallet in the country 'cause it's very sticky to the use case of grocery shopping. So this is one. Two, in a couple of weeks from now, we're going to launch our, prepaid.