Presentation on theme: "IFC Venture Capital Group"— Presentation transcript:
1IFC Venture Capital Group Presentation for Beijing Energy Network / Beijing Energy & Environment RoundtableMarch 5, 2014
2Contents IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with UsVC PortfolioVC Investment TeamVC Case Studies
3IFC: Part of the World Bank Group Conciliation and arbitration of investment disputesGuarantees of private sector investment’s non-commercial risksInterest-free loans and grants to governmentsof poorestcountriesLoans to middle-income and credit-worthy low-income country governmentsSolutionsinprivatesector developmentIBRDInternational Bank for Reconstruction and DevelopmentIDAInternational Development AssociationIFCInternational Finance CorporationMIGAMultilateral Investment and Guarantee AgencyICSIDInternational Center for Settlement of Investment Disputes
4IFC OverviewIFC is the member of the World Bank Group focused on the private sectorFounded in 1956 with 184 member countriesLargest multilateral source of loan/equity financing in Emerging MarketsOver $97 Billion Invested Since 1956AAA-rated by S&P and Moody’sEquity, quasi-equity, loans, risk management and local currency productsTakes market risk with no sovereign guaranteesPromoter of environmental, social, and corporate governance standardsResources and know-how of a global development bank with the flexibility of a merchant bankHolds equity in over 756 companies worldwide across the following sectors:- Agriculture - Financial Markets- Manufacturing Service - Health & Education- Infrastructure - Oil, Gas and Mining- Telecoms, Media & TechnologyHolds $77.5 Billion in total assets on the balance sheet
5IFC’s Three Businesses IFC Asset Management CompanyWholly-owned subsidiary of IFC founded in 2009Invests third-party capital alongside IFC in a private equity formatAllows equity investors to benefit from IFC’s expertise in achieving strong equity returns as well as development impact$5.5 billion under management (FY13)Investment ServicesLoansEquitySyndicated loansTrade financeStructured finance and securitized productsRisk management productsLocal currency financing$18.3 billion invested in FY13, $49.6 billion committed portfolioAdvisoryServicesAccess to financeEnvironmental and Social sustainabilityInvestment ClimatePublic-Private PartnershipsInfrastructure adviseOver $200 million in fee income annually (FY13)Investment services covers the range of financial products for IFC’s own book. This amount covers 612 projects in 113 countries. Approx. 85% of this – or $15.4bn is long-term debt, guarantees and trade finance. Large ticket equity invested into mature companies and projects most of the remainder of $2.8bn. IFC venture capital is a fraction of that amount at approximately $100mm per year.IFC Asset Management Company is fairly new –it was founded in 2009 in response to the financial crisis by raising funds from sovereign and pension funds. IFC’s first AMC fund was targeted at increasing the capitalization of banks. There is a recently raised a $250mm fund called the Catalyst Fund which focuses on climate change-related projects. This is meant to co-invest with IFC in its climate-related projects which is one of the five key areas we are focusing on.In USD as of 30 June 2013
6IFC Invests across all Regions and Sectors $18.3 billion invested in FY13IFC invested in the 12 months that ended June 30, 2013, $18.3 billion total. Excluding Trade Finance, which is short-term, the investment amount was $11.9 billion. For just the Real Sectors, so excluding financial markets, the total was $8.2 billion.
7IFC’s Priorities Strategic Focus Areas Long-term client relationships FrontiermarketsClimate changeand environmental& social sustainabilityLocal financialLong-termclient relationshipsin emerging marketsStrategic Focus AreasConstraints to private sector growth in infrastructure, health, education, & the food supply chain
8IFC’s Global Reach100+ country and regional offices worldwide, AAA credit rating4,000+ staff (57% are based outside Washington DC)MoscowHong KongNew DehliAlmatyIstanbulWashingtonMexico CityBogotaBeunos AiresSao PauloPort-of-SpainDakarNairobiJohannesburgCairoUpdate Map: take star off of Paris and replace with normal dot, take out name “Paris”IFC HQ/Hub OfficesIFC Operational CentersIFC Country Offices
9IFC’s Venture Capital (VC) Expertise IFC at a GlanceIFC’s Venture Capital (VC) ExpertiseWork with UsVC PortfolioVC Investment TeamVC Case studies
10IFC Venture Capital Mission While being at the forefront of technological trends and leveraging our convening power, global platform and patient capital base, we foster innovation as well as technology transfer to emerging markets with the continued goal of delivering outsized and measurable development impact.Global innovation will only scale and have impact with significant private sector participation - that is where IFC VC has an important role to play.We operate as both a financial and developmental institution. This developmental mandate is what differentiates IFC from commercial financiers.
11IFC Track Record in Venture Capital IT Services - Selective VC investing in IT services with- focus on tech transfer and AsiaCleantech -Dedicated cleantech VC platform established. - Focus on China and IndiaExpanded Cleantech - Expanded into Agribusiness and Water - Regional Expansion into Africa, MENA, LACESIP Corporate Venture Platform - Expanded VC mandate beyond cleantech to priority sectors: IT-enabled businesses, education, smart systems, health care- Investing worldwide with a focus on Emerging Markets.Accelerate High Impact Early Stage Innovation for Emerging MarketsBackground overview of IFC VC, From IT to ESIP GlobalTIMELINE (FY)2013/14 and onwardCumulative # of investments18324962 (FY14 to date)Total $ invested$110M$193M$491M$582M
12Strategic Sectors of Focus Smart SystemsEnergyE-commerceRenewables and GenerationEnergy Storage and efficiencyLEDBusiness2Business,Business2ConsumerConsumer2ConsumerSmart grid,Smart buildingsEmbedded ITIndustrial BiotechAgri-techWater-techEnvironmentally friendlyBioderived Chemicals/Fuels/Materials for various applicationsLand managementNatural pesticides natural fertilizersCold chain logisticsFiltration & purificationWater conservationWastewater treatmentTelemedicine, healthcare IT, cost efficient innovative devices for human healthWaste RecyclingWaste to EnergyMed-techEdu-techTelemedicineHealthcare IT Innovative devices for human healthOnline educationRemote learningInnovative learning modelsRecycling servicesWaste treatmentWaste to fuel12
13How do we define Early-Stage? Post Technology Risk <-> Pre Mainstream Industry DepartmentsSmall deals (albeit not always)Disruptive market changeTechnology or business model innovationWeak Financial SponsorMultiple short term capital raisingsComplex and multilayered capital structureIncubationEarly-stageGrowthMid/Large Cap MatureInvestor profileFriends/family, non-institutionalPE, some late stage VCs, some debtIFC, PE, debt investors, public marketsVenture CapitalSpeculative –conceptual plays, incubationHigh Risk – Post product development, some revenues, high growthMedium – Likely profitableRisk profileLowDeal size< US$ 1 mmUS$ [1- 15] mmUS $5-25 mm> US$ 30 mmInvestment riskTechnology risk, very limited exitsMarket, execution and exit risks, some technology riskLate stage execution riskPricing, M&A, marginsIFC DepartmentInfoDevVenture Capital teamIndustry DepartmentsIndustry Departments
14Work with Us IFC at a Glance IFC’s Venture Capital (VC) Expertise VC PortfolioVC Investment TeamVC Case studies
15IFC’s Venture Capital Team: A Valuable Partner Core competence in emerging marketsDecades of experience as largest multilateral source of equity financing in emerging marketsüüPatient capitalFull cycle capital accessCan seamlessly deliver financial products according to company maturityüDeep domain expertiseDeep knowledge across sectors, with technology expertiseüBreadth of global networkNetwork at local level, across stakeholdersüConvening powerAbility to catalyze co-investorsüActive portfolio managementExpert investment team can add significant value with hands on involvementü
16IFC Venture Capital has developed a strong network of co-investors…
17Investment Products and Returns Late Venture & Early Growth CompaniesCleantech Innovation FacilityLate venture and early growth companies with some revenue tractionModerate technology and commercial riskSelect transfer of technology plays5-7 year exits$5-15 MM per investmentFor moderate to high risk early stage companies in new technologies or sectors with high development and climate impact, with particular focus on the poorest countries (IDA) (< $5M investments).High risk in early stage companies with high potential growth impactHigh technology riskTypically transfer of technology plays and new business models7-10 year exits$3-10 MM per investment
18VC Portfolio IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with UsVC PortfolioVC Investment TeamVC Case Studies
19Snapshot of Portfolio Companies Attero Recycling Private Limited (India) is a pioneer in the nascent domestic e-waste recycling market that operations across the full spectrum of the e-waste recycling activities.Organica Water (Hungary) has developed and is deploying a next-generation wastewater treatment solution, using plant roots, that treat and recycle wastewater in significantly less space, using less energy, and generating less sludge than conventional treatment plants.Microvast, Inc (China) is a growing research and technology driven company offering advanced power solutions for applications including electric vehicles, electric bikes, and power tools, as well as patented battery materials.Fluidic Energy (USA) is a provider of energy storage solutions with significant operations in Southeast Asia. The company supplies zinc-air batteries to support critical loads and backup power applications worldwide. The company’s products include remote site management, multi-year performance warranties and innovative financing terms.Attero, $5mmOrganica, $4mmMicrovast, $25mm ($15mm)Fluidic, $7mmKaiima, $10mmKaiima (Israel) is a plant breeding technology company that has developed an innovative non-GMO technology platform. which promises to deliver yield improvements across a variety of crops that reduce production costs, energy requirements and land use.19
20IFC VC – Overview of Committed Investments to date Fluidic Energy$7 MM EquityCVentures$8 MM EquityKaiima$10 MM Equity…QD Jason$6 MM EquityTPG ART$25 MM Equity ……Tianren Ecology$8.5 MM Equity ……Organica$4 MM EquityWorld, 2014Brazil, 2013World, 2013China, 2013China, 2013World, 2013World, 2012SINOGREEN FUNDNereus Capital$20 MM EquityEcolibrium$1 MM EquityKalkitech$1.35 MM Equity…Sinogreen Fund$20 MM EquityRenewGen Ventures$2.2 MM Project equityHaitai$9 MM EquityInfuse Capital$5 MMIndia, 2012India, 2012China, 2012India, 2012India, 2012Sri Lanka, 2012China, 2011Attero Recycling$5 MM Equity & ConvertibleAzure Power$4.5 MM Equity, $5.5 MM Convertible, $1.84 MM Rights IssuanceMicrovast$25 MM EquitySunpreme Silicon$25 MM EquityApplied Solar$10 MM debt, $5MM Equity, $3.3 MM EquityHusk Power Systems$0.4 MM ConvertibleShuoren Energy$8 MM Equity ……China, 2011China, 2011India, 2010India,India,India, 2010China, 200920
21VC Investment Team IFC at a Glance IFC’s Venture Capital (VC) ExpertiseWork with UsVC PortfolioVC Investment TeamVC Case Studies
22VC Team (DC, Beijing and Mumbai) - Decades of Experience Nikunj Jinsi, Global HeadWashington, DCHoi Ying So, Investment Officer., Washington, DCRuzgar Barisik, Senior Investment OfficerWashington, DCSobhi Mahmassani, Assoc. Investment Officer,Washington, DCPravan Malhotra, Principal Investment Officer Mumbai, IndiaQinglong Meng, Investment Analyst Beijing, ChinaSean Petersen, Senior Investment Officer Washington, DCIsabel Ramberg, Investment Analyst Washington, DCPeter Cook, Senior Investment Officer,Beijing, ChinaNikhil Tambolkar, Investment Analyst Mumbai, IndiaXiaomin Mou, Investment OfficerBeijing, China
23VC Case Studies IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with UsVC PortfolioVC Investment TeamVC Case Studies
24Case Study – Organica Water Organica Water is a Budapest based technology company that has developed and is deploying a next-generation wastewater treatment solution. Organica's technology creates engineered ecosystems, using plant roots, that treat and recycle wastewater in significantly less space, using less energy, and generating less sludge than conventional treatment plants, and thanks to much better odor control integrate well in urban environments. The technology was conceived in 1998 and the Company has since completed 28+ installations operating worldwide, including in Hungary, France, China and Poland, some for as long as 10 years. In December 2012, IFC led the $10M Series B equity round and invested $4 M.More recently Organica has focused its sales in IFC markets, primarily China, Turkey, Indonesia, India as well as Russia, Ukraine, Eastern Europe and the UK. IFC's investment will support the Company's growth in emerging markets with a focus on Asia and ECA.Wastewater TreatmentHungaryOrganica WaterIFC TotalUS$4 millionEquityDec 2012IFC Value Add:IFC local network and knowledge: Organica has access to IFC’s regional and local staff in China, India, Turkey, Russia, Ukraine and Indonesia, where IFC has active investment, advisory and PPP programs in water infrastructure and utilities. IFC is able to provide knowledge and support to the Company as it navigates through local regulatory framework for municipal wastewater management.Introduction to clients: Through IFC’s existing client base and partners network, IFC has introduced Organica to new sale opportunities:Private water and sanitation utility in Brazil;Listed water and wastewater treatment solutions provider in China;Listed water service utility company in the Philippines;Industrial clients in the textile sector in Bangladesh.
25Case Study – KaiimaKaiima is an Israel based plant breeding technology company, which promises to deliver strong yield improvements across a variety of crops that reduce production costs, energy requirements and land use. The technology has the potential to create a transformational change in the seed industry. Kaiima’s seed technology improves cultivation in areas that are experiencing changing climates, especially in China (wheat in the South), Kazakhstan, South Africa, etc.The company operates under three segments:High-impact food crops, such as wheat, rice and corn, which are critical for basic global nutrition;Industrial crops, such as castor, canola and sugarcane, supporting renewable energies;Vegetables, which the Company is now selling in multiple markets around the world;Kaiima's non-GMO technology is also targeted at no-till applications for smallholder farmers.Kaiima was named as a Global Cleantech 100 company.Bio Agri-TechIsraelKaiimaIFC TotalUS$10 millionEquity2013IFC Value Add:IFC local network and knowledge: IFC is able to provide knowledge and support to the Company as it seeks to expand into new markets. IFC focuses on ensuring E&S best practices, improving corporate governance and guiding the Company's emerging markets strategy.IFC catalyzed other investors in participating in the Company’s investment round.
28IFC’s VC is uniquely positioned to accelerate early stage innovation in the developing world Relevant domain expertise (tech + sector)Venture fundsIFC Venture CapitalInvestment banksGlobal network of local expertiseLimited in many dev-eloping geographies, especially IDAsûBreadth of global net-work, at local level, across stake-holdersüFull cycle capital accessCompany building expertiseDeploys only early stage capitalLimited ability to fund across capital structure due to incentivesCan seamlessly deliver financial products according to company maturityDeep technology expertise, building sector knowledgeGeneral knowledge in sectors, lack of technology expertiseDeep knowledge across sectors, gaining technology expertiseCore competencyExtremely limitedExperience from a decade in IT VCSuccess factorsWe asked McKinsey to conduct an independent review of IFC’s strengths vis a vis supporting cleantech innovation and this is what they heard from venture investors across the globe.IFC is in a powerful position to fill a funding and knowledge gap for Cleantech companies because of a combination of global sector expertise, local knowledge, a full range of financial instruments and it’s track record in VC/growth capital.28