Hello everyone, welcome to the Vostok New Ventures Interim Report January to March 2020. Today, I am pleased to present Chief Executive Officer, Per Brilioth, and management. For the first part of this call, all participants will be in listen- only mode, afterwards there will be a question and answer session. I will now hand you over to Per Brilioth. Please begin.
Thank you, and welcome everyone. On this call, I'm joined here with my colleagues, Nadja, who's our CFO, Anders, head of legal, and Björn, who's an investment manager here at Vostok. We have some more colleagues. Starting with this quarterly call, you won't only hear me blabber on here. There will be other people blabbering as well. We thought it'd be good to get going with this as of this call because there's some important topics to cover beyond this quarterly report. As per the agenda here, we're going to talk about this quarter reports. Nadja will help on the numbers. Björn is going to give us a little bit more detail on the construction of the VNV. Anders here is going to talk about our move to Sweden. That's the agenda.
Starting off as usual with this longer historic view of our performance over the years. We obviously go back all the way to 1997. 2007, we spun off the Gazprom shares, and this shows the performance in Swedish Krona. Since we sold our portfolio of listed shares in 2012, the IRR is now an annual 33%. Diving into the details of this quarterly report, of course, COVID-19 is on everyone's mind, and I think we touched upon this in the annual report, and we've touched upon this, of course, in this report. We're not going to go into the macro. I think there's maybe a little bit more visibility now than when we wrote the annual report a couple of weeks ago, which seems like a lifetime ago, but there's still a lot of uncertainties out there.
What is certain is that the GDP is having a big contraction. On the whole, high level, I think we feel very strongly that our portfolio consists of companies that have products that will even benefit from the changes to society that we will for sure witness post this COVID-19 crisis. The work right now is super important that we see that these companies have enough runway so that they, and the shareholders in them, can enjoy that positive impact which we feel very strongly will come. The general activity that's been going on is one of reviewing all costs and making sure that the cash balance at the company's balance sheets is long enough to at least live through the maybe extreme volatility and extreme lack of visibility that we are subject to right now.
Beyond that high level, it's a mixed bag despite the companies having products that I think will benefit from changes to society. It's of course a mixed bag as this page five tries to highlight in our presentation. So I mean, the transportation companies are, obviously, seeing big sort of demand contraction, a little bit of various degrees. Babylon and the other constituents of the portfolio that are health related see a demand level that's certainly unprecedented and in many ways, maybe they see too much demand. They can't handle all the demand. Going a little bit further into detail, we feel Voi, for example, is still active in Sweden. Sweden, as I think most people know now, is not under a forced lockdown, but under a voluntary lockdown.
As I think it's been clear for everyone here in Sweden and also people viewing it from various data sources abroad, despite Sweden being not under forced lockdown, most people here have been in voluntary lockdown. Activity levels have been very low although businesses, shops, et cetera, have been open. Voi has been open in Sweden, but in most of its other markets, and importantly Germany and France which are under complete lockdown there's no business going on. We feel though that when these markets starts to ease their lockdown and this will be gradual, humble about that, but, when they do, we feel strongly that the populations of cities would prefer to walk, to ride a bicycle or to ride an e-scooter rather than spend time with an uncontrollable amount of people in a tube, metro or a bus.
We feel Voi stands in that very logical way to benefit from. This will be witnessed in the recovery phase. We also feel that because it was so clear that this e-scooter phenomenon was so popular, has been so popular, I think it's fair to describe it as it's become a part of cities' infrastructure, transportation infrastructure. That's also meant or led to that most cities, not all yet, but I think all will issue licenses to one or two or three different operators who will be able to run these sort of operations, these fleets of scooters in a city. Voi has, of course, from the start, had that as an integral part of their strategy to only launch in cities in cooperation, if not under license, in cooperation with the city municipalities.
I think it's the operator in Europe that has the most licenses currently, and it's sort of built up to be successful in these license rounds. As we recover out of this COVID-19 crisis, and as lockdowns ease, I think both cities' councils and the populations in these cities will be eager to provide these type of transports likely under licenses, and Voi will stand to benefit from that. I think also, it's because the demand contraction, this crisis is an accelerator of the consolidation of the industry. Here in Stockholm, we've had, I don't know, 10 different players, and there's certainly much less now. I think that's a general theme across Europe. In fact, the two heavy-hitting players in the world, two American companies, Bird and Lime, are not present anywhere in Europe at this moment of time. Perhaps not anywhere in the world.
It's very unclear if operators who are not present will ever be able to come back and participate in these license rounds. Overall, on Voi, the market now is smaller than anticipated, but the market share of the people who are still around, like Voi, is certainly higher. I think also the market demand for these services will become bigger faster than we earlier anticipated. Over to BlaBlaCar, where if Voi has some activity, BlaBlaCar long distance in France, which is the big contributor to their revenues, although they're present in many, many countries, is basically there is very little activity going on, if any. People are at home, they're not traveling inside the cities or beyond the cities. A big air pocket of demand.
Again, in the recovery phase here, instead of going for a long weekend and visiting your parents or your kids and spending time on a bus or a train with a large amount of people who you don't know what they carry with them, I think people will prefer to sit in the controllable environment of a car where you can basically make yourself sure of what risks you are subject to from the other passengers. Again, big demand contraction now, but because of the nature of the product, in the recovery phase, we feel enthusiastic about it. Then finally, as per this slide, if you go over to Babylon.
There's an enormous increase in demand for health products in general, be it physical or digital right now, as people worry about the symptoms of COVID-19 and the physical, more traditional sort of health producers are super busy with handling COVID, other type of diseases are left to be dealt with by someone else. This has certainly led to an increase in the demand for digital health services. Babylon is, of course, the global leader in that one. Furthermore, I think the product that they provide, which has AI at its heart, is of course, one that will benefit enormously also as we go forward in the recovery phase from this crisis.
I think we try to compare it to something in the quarter report and in our write-up there. I sort of get a sense of that, we'll ask ourselves in a year or two from now, we'll be astonished that we went down to the physical doctor or care provider without a digital interaction in advance of that. I think that will be the same as that we were astonished that people were allowed to smoke in restaurants before that. That just doesn't happen anymore. I think this will be the same sort of natural starting point, that when you feel symptoms of whatever sickness, you will have an interaction with a digital sort of care provider first, and then that may lead on to something else.
Of course, as we look across the world, and certainly here in Sweden, where I think the penetration of digital health is perhaps the highest in the world. Most of the producers of digital health services are simply video calls with a doctor, which is interesting. Not interesting, but it's efficient. I can be at home as a patient. The doctor can essentially be at home as well, but it doesn't really leverage. There's still interaction between a patient and a doctor. Babylon with AI at its heart, where it's a computer that takes the symptoms and essentially makes the diagnosis is, of course, one that then can leverage the time of the doctor enormously. As demand increases for this, that type of product will be crucial even. Hence Babylon is seeing an enormous amount of demand right now.
If you look across our portfolio, there's some obvious changes in our NAV, which my colleague Björn will talk about later. Babylon is in our NAV, which overall in dollar terms is down 6%, has been marked up by 30%, whereas the transportation stuff, even though we think positively, very positively about it long term, when you measure the value in the midst of this demand contraction, they are marked down, BlaBlaCar by 24% and Voi by 16%. Before we go to more details around the numbers here, Nadja and Björn will help me with that. Just some other general points from the quarter at large. We have been active in investment work.
We have put more money into Swvl which again it's a product inside the city transportation in big emerging market cities is one that will be in even bigger demand beyond this sort of crisis that we're in now. We put $7 million into Swvl including an earlier convertible we have during the quarter closed a total of $3.3 million into HousingAnywhere, which is the Airbnb for long-term rentals. We have also concluded a deal which we started earlier but totaling at $2.5 million of additional investment into Numan, the male health platform based in the U.K. I think we've also continued to try to provide insights into the performance inside the quarter of as many companies as we can. If we start off with Babylon, they delivered just under 12,000 daily consultations during the Q1 of 2020. That's up 70% year-over-year.
Be mindful though that this is January and February were pretty normal months and maybe the bulk of March too. I think 70% is sort of a pre-COVID-19 kind of increase, general increase as sort of digital disruption/penetration was at work in the health sector overall and we see that accelerating. When we talk next time and look at the Q2 report, I think that figure may be higher. Babylon also launched a specialized COVID-19 care assistant, and it's basically subject to an enormous amount of demand of state buyers and corporate buyers of its product. They closed longer contracts with Rwanda and the NHS in Wolverhampton, and there's many more to come. BlaBlaCar ended this Q1 with just over 90, in fact, 93.2 million members.
We're happy to continue to sort of produce these numbers so that you can get a feel how these companies sort of fare. During the Q1 of 2020, they clocked 18.3 million passengers, which is a 35% increase compared to the same quarter last year. Of course, April basically being shut down, their major markets are under lockdown. That figure will decrease, of course, during the quarter we're in now. I don't think that will come as a surprise to everyone. Business going into the COVID-19 crisis was strong. Voi, we've spoken about that they're delivering according to plan during the Q1. COVID has, of course, they've been forced to suspend services in many cities. Gett delivering according to budget, and then COVID has had them also see demand contraction.
Their B2B business, which is the business they're pivoting to or focusing on now, is much less negatively affected than the B2C ride-hailing industry at large. I think that concludes some general thoughts on the portfolio. We will talk more about the NAV. I just thought I'd also leave you with the aspects of, w e're not only moving home to Sweden, which Anders will talk about here later, but we're also changing our name. Having spent, I don't know, what is it now? 20 years? Is it 20 years? Yeah, at the company, and calling ourselves or saying Vostok, you'll have to bear with me. I may say Vostok for quite some time. Subject to shareholder approval at the 12th of May AGM, we will become VNV Global.
When we talk next time around, you're going to be talking to the same people, but it'll be a Swedish company by the name of VNV Global. The shift to the abbreviation of Vostok New Ventures to VNV is something I think people already started to call us that, and I think it's a better reflection of what we do since we sold Avito. When we sold Avito, we had like 65%-70% of the portfolio in Russia. Now it's more like 5%, and the bulk of the investments are in more globally-focused companies than purely Russia-focused companies. The Russian sounding Vostok has been dropped to the benefit of VNV Global.
That will also mark a more permanent maybe step into what we do today, which is still seeking out companies with business models that can build very high barriers to entry through network effects, but also others. We're flexible as to the stage, as to the sector, and we'll build on our experience and our track record of these past 20 plus years to seek out very good risk-reward investments to do. I think we're going to do a Q&A a little later. With that, I'll leave it over to Nadja for a financial update.
Thank you. I will go through the financial. Our net assets value was $731 million or $45 million down compared to the year-end 2019, which corresponds to 6% decrease. The portfolio value change is driven by negative effects of valuation of mobility and travel-related companies like BlaBlaCar, Voi, and OneTwoTrip, which was partly offset by positive value change in health sector companies, Babylon and Vezeeta. The net result for the period was -$45 million, which is mainly coming from devaluation of our portfolio.
As regards to financial position in February, a tap issue of bonds 2019-22 in the amount of SEK 150 million was carried out. Including this tap issue, as at end of March, we hold cash and money market investment in the total amount of $38.5 million. During Q1, we invested $12.4 million in our existing portfolio companies, of which biggest part, $7 million in Swvl and $3.3 million in HousingAnywhere. Björn right now will tell us more about valuation of our portfolio companies.
Thank you, Nadja.
Thank you. Yes. As Per mentioned at the beginning of the call, we have moved the vast majority of the portfolio to valuation models rather than keeping them on last transaction on market terms, given the high volatility and lower visibility situation at the moment on the back of COVID-19, as per the end of the Q1. Among the largest holdings, to give an example, both Babylon and Voi have market transactions that are less than 12 months old but are now, as per end of March, valued on the back of valuation models. Overall, the fair value of the total investment portfolio is down some $48 million during the period. The largest contributors to the fair value movements in absolute terms on the downside are BlaBlaCar, -$50 million, Voi, -$16.5 million, and OneTwoTrip, -$13.5 million.
While on the upside, we have Babylon as the only significant contributor with an increase of value of $62.5 million. The remaining portfolio in aggregate is down some $30 million. In general, downward adjusted valuations has been driven by lower trading multiples of listed peers, as well as adjusted financial outlooks on the back of COVID-19. For Babylon, it's the opposite, with higher peer multiples and increased demand for their services. Babylon, our 10.8% ownership is now valued at $262.5 million, which is corresponding to 31% increase compared to the end of 2019. Based on a EV revenue model, compared to last transaction as per December 31, 2019. A noteworthy reference point for Babylon is that its listed peer, maybe closest listed peer, Teladoc in the U.S., is up some 85% during the same period.
Our 8.7% ownership in BlaBlaCar is valued at $159 million, which is down some 24% on an EV revenue model compared to EV revenue model as per December 31, 2019. Voi, which we own 32.7% of, is valued at $85.9 million, which is down some 16% from year-end, which was the last transaction and now valued based on an EV revenue model. Similarly, OneTwoTrip, which is our Russian OTA, which operates in a sector that is probably most impacted directly by COVID-19, given the very global limitations on international and domestic air travel, which is down 47% based on an EV revenue model. Here, currency depreciation of the ruble following the low oil price has also had a negative effect on the USD value. This was the list of the main contributors on the upside and downside of the NAV during the Q1.
I would encourage you to go through note three in the Q1 report for more details on these valuations and how they're built up, and sensitivity analysis around that. With that, I'm handing over to Per again.
Briefly to me, and I'll thank you, Björn, for that. We can come back to more details if there are any questions in the Q&A. Before that, I hand over to Anders, who will talk about us moving home to Sweden.
Thank you, Per. In front of you, I think soon you will have a picture, which I hope you've seen before, which explains, I think, the main features of what I'm about to talk about. This is a project that's been growing for some time, I think in the minds of management as well as the board. The structure you see on the left with the Bermuda parent company that issued depository receipts on the Swedish Stock Exchange is a legacy structure which has been, I think, active for the last 20 years. The right-hand structure, what we've done is we've simply removed that top Bermuda parent with the Swedish company that certainly everyone around this desk is currently employed at. The management will be employed in the parent company and the structure becomes that much simpler to manage.
Simplicity of management is one key consideration which is behind this. There are cost-effectiveness benefits in the way we govern and run the group. As some of you have noticed, probably last night, we dropped quite a bomb of documents in your lap to make this happen. I think what I wanted to do is just in a few points describe what we're doing and what those documents mean. The way to achieve the switch to a Swedish company is by way of a Bermuda scheme of arrangement. It's the notice and materials ahead of the meeting to decide on that arrangement that were announced yesterday. We've managed to time it so that that meeting can be held immediately after the AGM, even though legally it is a distinct meeting from the AGM.
Those of you who want to support us in making this move will have to register not only to the AGM, but also to the scheme meeting, which will be held immediately afterwards, according to those separate documents that were released last night. The vote participation is important since it requires a 75% majority vote. All the comments we've received from shareholders we've spoken to so far have been positive, so we're optimistic, but we do encourage you to support us at that meeting. The outcome of the meeting will be binding on all shareholders, regardless of how or whether they vote, if the requisite majority is achieved. Maybe that goes without saying. The main result of the scheme is that the Swedish parent, you'll be not holders of depository receipts, but in shares in the Swedish company.
I think in terms of governance and transparency, there are benefits to this. It will be more similar to other companies on Nasdaq Stockholm, certainly, but also I think a lot of the regulatory and legal protections of shareholders in Sweden are probably more in line with what you would expect from public companies generally than the setup we have now, even though we've tried to emulate that as best we could. The governance will be simplified. It will be more transparent. There is no tax effect to the group itself in this change, so effectively the group and the economic interest that you'll be holding will be undiluted and unaffected. Trading, we will set up so that you will hold the SDR one evening, and the morning you wake up, you'll be holding a share, so there should be no interruption in the way of trading.
Depending on where you live, who you are, how you're set up, there may be tax consequences for you as shareholders. That's something that we've described at length in a document called the Explanatory Statement to the Scheme, which was distributed yesterday and is available on the company's website as well. Obviously as with these matters always, your unique situation needs to be taken into account. The next step in this progress is obviously the meeting on the 12th of May. After that, the Bermuda Supreme Court has to sanction the Scheme, which is effectively confirm that the meeting took place and was conducted in an orderly fashion. After that, there will need to be a listing prospectus filed with the Swedish Financial Supervisory Authority, in order for the Swedish shares to be admitted for trading.
We have a tentative positive already decision from Nasdaq that the shares will be accepted subject to that prospectus. The whole procedure is expected to close in mid-June if everything goes according to plan. That's about what I wanted to talk about, overview, Per.
Okay. Thank you, Anders. I think we'll move to Q&A now. If the operator could help us organize that, this would be great.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad now. If you wish to withdraw a question, you may do so by pressing zero two to cancel. Our first question comes from the line of Lars-Ola Hellström from Pareto Securities. Please go ahead. Your line is now open.
Hi, Per. Starting with the mobility segment, and Voi. We have all been reading what is happening and COVID-19 is making operating environment troublesome, but has there been any new licensing rounds? Is there anything that has been positive for the long term that has been happening underneath the main headlines in Q1 for Voi?
I think city councils have been very busy with other things, right? To my knowledge, there's been no license round that have been announced and completed since we last spoke. I think it's just the overall trend is of course positive, scooter versus tube and all of that. I think the big license around that Voi is subject to is the one in Paris, which is of course, a very big market. The deadline for that is over. The announcement of the winners will happen later on, because this COVID stuff has sort of postponed that. In addition to that, there's an election for the Paris mayor that's interrupted this. I think the results of that, it was supposed to be due out now in May, June. I think that's been postponed till about September.
The round is very much happening and we're a very enthusiastic bidder for such a license, of course.
In terms of competition and funding, let's say that we get back to business in sometime second half of the year. Do you think half of the competitor will have bankrupted or merged into some other entities before the turn of the year? It can't be that easy for companies with low cash balance to raise money.
No. I don't think it's possible at all to enter this market at this stage and raise funding for a new player or even an old player with insignificant sort of market share. I think the presence here in Stockholm is pretty telling probably for what I see the European landscape overall looking at, which is Voi, which is the largest in Europe, followed by TIER, which we see here in Stockholm, but which is a German player and very focused on Germany. A good operator, but still smaller than Voi, and with good sort of shareholders and backers. We also have Dott, which we don't see in many cities at all in Europe, but which is a company that's very focused on France and Paris especially. They're big in Paris and I'm sure they're a license bidder for the Paris licenses.
They are backed by our friends at Naspers, obviously, a good shareholder with deep pockets. Not have taken very different routes to the market. I think it's really Voi or TIER that are the two main players in Europe. At some point, I think from my point of view, some kind of consolidation will be logical also at that level. The U.S. ones are in disarray, right? One of them was sort of sidestepped by this crisis in their funding cycle, very large sort of cost bases. The organization is in a bit of a disarray, and the same with their competitors in Bird, I also understand, have sort of basically pulled out from Europe and from what I hear anecdotally, it's very pulled out and also reduced the number of employees in a bit of a wild fashion, basically. Yeah.
No, I think the European landscape is pretty much TIER and Voi, and doubtful about the American ones if they come back. Then there is some local competition like Dott in Paris.
The American ones, they have pretty strong owners. I guess they will be able to raise funds again. Of course, they have a sizable operation in the U.S., which they need to take care of first. Shouldn't we expect them to be in Europe still?
Well, I think because this will be an even more important part of city infrastructure because of the demand structure for these type of services versus demand for being transported on a packed tube, then I think license rounds will be even more important. Cities will accept that this is here to stay, this is important. The people live in the city, this is how they want to be transported. We will allow people to operate these fleets of e-scooters, but only under licenses. Who do you give a license to? Do you give a license to someone who stayed and sort of was helpful to hospitals and local businesses, who took care of their employees, and helped the employees who had to leave with new jobs? Do you give it to someone who just left, fired everyone, and never showed up during the war?
I think it will be very tough for someone like that to come and get any licenses in the recovery phase. We'll see.
Okay. Moving on to Babylon. We have also witnessed what is happening to Teladoc, et cetera. Can you give us some update? What has changed in the U.S. on the state level? Will it be possible to roll out the contracts in a faster pace than it has been before? Has there been some legal changes on state level that will be permanent? Can you give us some flavor on that?
I think Babylon launched in the U.S. during this quarter, which we're now documenting, right? They launched with Centene in January. I think the rollout, United States of America is one country, but it's many different states, and these different states have different regulations and different aspects that you have to go through, even legally and perhaps also technically, to launch in them. That's still a cumbersome process. Cumbersome, it takes time. Of course, given the state of the spread of this virus in the U.S., I think there's an unprecedented amount of resources being put to this area, and demand is certainly very, very high. I think as someone put it here, that you've had 10 years of change in one week, basically, in terms of digital sort of health producers. Trump has expanded telehealth benefits to Medicare beneficiaries.
Of course, Centene is I think even the biggest producer of Medicare sort of services and Medicaid. The FCC has also developed and approved a $200 million program to fund telehealth services and devices for different sort of medical providers. There's an enormous amount of activity. I think demand for Babylon service has gone straight up, and I think there's a lot of resources being put to work also to help them get out there to potential patients quickly. Yeah. Babylon is not listed, so it's difficult to see through, although it's of course nearly a third of our portfolio, so maybe we are the listed sort of exposure to Babylon. Babylon in our portfolio is now $2.6 billion.
Teladoc, their listed peer, as Björn put it, is up some 3x over these last 12 months, and I think it's even above $12 billion valuation now. $2.6 billion, Babylon immensely more sophisticated product than Teladoc, it's a very interesting sort of valuation gap between the two.
In terms of pipeline for Babylon, already the last quarters it has been a really strong pipeline. Is it factor two or factor three on potential customers, clients reaching out for them, or how has that changed? Can you give us some flavor on the quality of the customers reaching out as well?
I think the quality of the customer is already present at Babylon. From the NHS, the largest sort of health care producer in the world, to Centene, the largest U.S. Medicaid insurance company, to the Bill Gates Foundation, to Prudential. The quality can't get any higher. I think it's difficult to say if it's 2x or 3x or 4x or 5x, it's something to that order, the number, I think it's fair to assume the number of sort of reach outs for this type of product. Then it's still, even with more resources, from initial sort of interaction to negotiated agreement to an implemented sort of product, it takes a little time. During that time, there's some heavy lifting at the company. When the product's out there, it's a very large revenue, very high margin kind of business.
It's not at our sort of liberty to go into sort of the individual contracts, unfortunately. There's lots of interest.
Okay. Gett, can you give us some flavor on how the business-to-business, the SaaS business rollout is progressing? The platform was rolled out in the end of last year, businesses signing up to use it more widely?
I think in terms of company sort of contracting, the need for this type of SaaS business, that activity is still going. Of course, in a similar fashion to Voi and BlaBlaCar, of course, activity also at the corporate level, we're all at home, right? Most corporates work from home and are unable to move around. In terms of an activity level, we should also expect that to sort of be subject to the same sort of drop as the other mobility players. Maybe for Swvl, where there's still a lot of activity. In terms of interest in the product, I think that's unchanged. Perhaps even stronger.
Okay. In terms of capital needs for the holdings, can you give us some more flavor? What part of the portfolio is it mostly related to mobility assets that possibly would need money, if any, or?
I think the big holdings are in a good spot in terms of cash and runway. With no sort of immediate needs to do anything there's certainly enough sort of runway to at least get to a space of more visibility. We think more visibility is good visibility, in that we believe these products will benefit from changes in society. There are some bits and pieces that were in the sort of the funding cycle of needing funding now. We have ability to support our pro rata in those. Those are not really any of the sort of the larger parts of the portfolio. All good for now.
A final question here on BlaBlaCar. I think BlaBlaCar has started very cautiously to monetize in Russia. How has the early signs been before COVID then?
Yeah, no, I think any country sort of launch a monetization is a very, very gradual one, as per online classifieds as we know it. It starts very, very small, then it's very gradual. In this case, too, of course, Russia is also subject to lockdowns now or extended holiday, as they say there. Activity also there will be smaller. Of course, there it doesn't really matter because since it's essentially pre-revenue, of course it's not subject to any revenue loss either. That sort of revenue scope is all for the upside. If anything, you don't start to monetize in the midst of a lockdown. One should sort of expect that to be something that happens in the recovery phase, in all essence at least.
Finally, on the mobility asset, would it be fair to assume that 2020 will be a lost year in terms of growth, that we can see the growth in 2021, with 2019 as a starting level, would that be?
Yeah
Fair assumption that just maybe?
I don't think that's unfair, at least, right? That's very much as Björn, that's the way we look at it, that 2020, a lost year is maybe harsh to say because, of course, we had some serious growth and activity in the first part of the year. Mobility-wise, demand has contracted. I think easing of lockdowns will be gradual, and visibility into the exact sort of when the recovery happens is tough to say. During the latter part of this year, I think there'll be more activity than what we see now. I think that's not such a wild thing to say and assume, I believe. I think it's maybe unfair to say it's lost, but given that these products we believe will be in good demand, I think it's not unreasonable to assume that 2021 will assume the characteristics of 2020.
That how we thought 2020 would look like when we were looking at it from the distance of the end of 2019, if you see what I mean.
Contraction, some companies will use some of their cash piles. As the recovery starts in 2021, at least, the recovery will be present. I don't know if global GDP may not have recovered to the levels of 2019 in 2021. I think the contraction this year is larger than that, but that's sort of the aggregate GDP level. If you look into the specific sort of sectors, I think these companies very well could assume financial characteristics of 2020, what we thought was going to happen in 2020 but now in 2021.
A final question here. Given that the market is a lot tougher, now the valuation is coming down in the VC market. Some assets that you might have been considering to sell is probably not likely to be sold at the valuation you wanted. How do you view new investment? Should the portfolio activity be pretty low in coming quarters that you just will have enough funds to be able to support the existing holdings, or can it even be a new investment as well?
No, we continuously look at new investments. Hand on the heart, we're not seeing anything that's coming our way at the kind of maybe even distressed levels that you'd sort of be willing to put money at work. It's not like there's a huge activity, I think, right now. We continue to look at young companies and should there be opportunities in more mature companies as well. We're active, absolutely.
Is there absolutely a level of cash you wanted to still hold?
Sure. Since we don't have any large sort of dividend-paying parts of the portfolio like we did with Avito in the latter years, we hold a certain OpEx levels, a certain periods of OpEx level we will hold in reserve. Yeah. Still, we have capacity to sort of fund the companies in our portfolio that needs funding in the shorter term now, and we're always actively looking at the investments that we think are in the interest of our shareholders to do. Despite the world being very volatile now, and that's sort of reflected in the listed parts of the capital markets, I think the private markets or our part of the capital markets have not been subject to lots and lots of supply of people looking to fund themselves. Not yet, at least.
Okay. Thank you.
Thank you, Lars-Ola.
Thank you. Just as a reminder, if you would like to ask a question, please press zero one on your telephone keypad now. There seems to be no further questions at this point, so I will hand the word back to our speakers for any final comments. Please go ahead.
Thank you. Yeah. Thank you, operator, and thank you everyone for listening in. Please reach out if there's anything that you want to talk to us about, and we will interact with you as we go along here. The next call of this nature, which I'll conduct together with my colleagues, will be sometime in mid-August. That'll be our Q2 report. If not before, then until then. Nadja says it's July. Yeah, it's a little earlier this year. Everything's a little earlier this year. July, midsummer 29th of July. That's when we speak next. Okay. Thank you, everybody.
This now concludes today's conference call. Thank you all for attending and you may now disconnect your lines.