Presentation on theme: "March 5, 2014 IFC Venture Capital Group Presentation for Beijing Energy Network / Beijing Energy & Environment Roundtable."— Presentation transcript:
March 5, 2014 IFC Venture Capital Group Presentation for Beijing Energy Network / Beijing Energy & Environment Roundtable
2 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies Contents
IFC: Part of the World Bank Group 3 Conciliation and arbitration of investment disputes Guarantees of private sector investment’s non- commercial risks Interest-free loans and grants to governments of poorest countries Loans to middle-income and credit- worthy low- income country governments Solutions in private sector development IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency ICSID International Center for Settlement of Investment Disputes
IFC is the member of the World Bank Group focused on the private sector Founded in 1956 with 184 member countries Largest multilateral source of loan/equity financing in Emerging Markets Over $97 Billion Invested Since 1956 AAA-rated by S&P and Moody’s Equity, quasi-equity, loans, risk management and local currency products Takes market risk with no sovereign guarantees Promoter of environmental, social, and corporate governance standards Resources and know-how of a global development bank with the flexibility of a merchant bank Holds equity in over 756 companies worldwide across the following sectors: - Agriculture- Financial Markets - Manufacturing Service- Health & Education - Infrastructure- Oil, Gas and Mining - Telecoms, Media & Technology Holds $77.5 Billion in total assets on the balance sheet 4 IFC Overview
IFC’s Three Businesses IFC Asset Management Company Wholly-owned subsidiary of IFC founded in 2009 Invests third-party capital alongside IFC in a private equity format Allows 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 Services Loans Equity Syndicated loans Trade finance Structured finance and securitized products Risk management products Local currency financing $18.3 billion invested in FY13, $49.6 billion committed portfolio Advisory Services Access to finance Environmental and Social sustainability Investment Climate Public-Private Partnerships Infrastructure advise Over $200 million in fee income annually (FY13) 5 In USD as of 30 June 2013
IFC Invests across all Regions and Sectors 6 $18.3 billion invested in FY13
7 IFC’s Priorities Frontier markets Climate change and environmental & social sustainability Local financial markets Long-term client relationships in emerging markets Strategic Focus Areas Constraints to private sector growth in infrastructure, health, education, & the food supply chain
8 IFC’s Global Reach Dakar Nairobi Johannesburg Cairo Washington Mexico City Bogota Beunos Aires Sao Paulo Port-of-Spain Moscow IFC HQ/Hub Offices IFC Operational Centers IFC Country Offices Hong Kong New Dehli Almaty Istanbul 100+ country and regional offices worldwide, AAA credit rating 4,000+ staff (57% are based outside Washington DC)
9 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case studies
IFC Venture Capital Mission 10 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.
IFC Track Record in Venture Capital 11 IT Services - Selective VC investing in IT services with - focus on tech transfer and Asia Cleantech -Dedicated cleantech VC platform established. - Focus on China and India Expanded Cleantech - Expanded into Agribusiness and Water - Regional Expansion into Africa, MENA, LAC ESIP 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 Markets TIMELINE (FY) /14 and onward Cumulative # of investments (FY14 to date) Total $ invested$110M$193M$491M$582M
Strategic Sectors of Focus 12 Telemedicine, healthcare IT, cost efficient innovative devices for human health Renewables and Generation Energy Storage and efficiency LED Smart Systems Water-tech Med-techEdu-tech Agri-tech Waste Recycling Waste to Energy Industrial Biotech E-commerceEnergy Recycling services Waste treatment Waste to fuel Environmentally friendly Bioderived Chemicals/Fuels/Materials for various applications Telemedicine Healthcare IT Innovative devices for human health Land management Natural pesticides natural fertilizers Cold chain logistics Business2Business, Business2Consumer Consumer2Consumer Filtration & purification Water conservation Wastewater treatment Online education Remote learning Innovative learning models Smart grid, Smart buildings Embedded IT
How do we define Early-Stage? Investor profile Risk profile Deal size Investment risk Friends/family, non- institutional Speculative – conceptual plays, incubation < US$ 1 mm Technology risk, very limited exits Venture Capital High Risk – Post product development, some revenues, high growth US$ [1- 15] mm Market, execution and exit risks, some technology risk PE, some late stage VCs, some debt Medium – Likely profitable US $5-25 mm Late stage execution risk IFC, PE, debt investors, public markets Low > US$ 30 mm Pricing, M&A, margins IFC Department IncubationEarly-stage GrowthMid/Large Cap Mature Venture Capital team Industry Departments InfoDev Industry Departments Post Technology Risk Pre Mainstream Industry Departments Small deals (albeit not always) Disruptive market change Technology or business model innovation Weak Financial Sponsor Multiple short term capital raisings Complex and multilayered capital structure 13
14 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case studies
15 IFC’s Venture Capital Team: A Valuable Partner Patient capital Full cycle capital access Can seamlessly deliver financial products according to company maturity Full cycle capital access Can seamlessly deliver financial products according to company maturity Deep domain expertise Deep knowledge across sectors, with technology expertise Deep domain expertise Deep knowledge across sectors, with technology expertise Breadth of global network Network at local level, across stakeholders Breadth of global network Network at local level, across stakeholders Convening power Ability to catalyze co-investors Convening power Ability to catalyze co-investors Active portfolio management Expert investment team can add significant value with hands on involvement Active portfolio management Expert investment team can add significant value with hands on involvement Core competence in emerging markets Decades of experience as largest multilateral source of equity financing in emerging markets Core competence in emerging markets Decades of experience as largest multilateral source of equity financing in emerging markets
IFC Venture Capital has developed a strong network of co- investors… 16
Investment Products and Returns For 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 impact High technology risk Typically transfer of technology plays and new business models 7-10 year exits $3-10 MM per investment Late venture and early growth companies with some revenue traction Moderate technology and commercial risk Select transfer of technology plays 5-7 year exits $5-15 MM per investment Cleantech Innovation Facility Late Venture & Early Growth Companies 17
18 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies
Snapshot 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. 19 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. Kaiima (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.
IFC VC – Overview of Committed Investments to date Fluidic Energy $7 MM Equity CVentures $8 MM Equity Kaiima $10 MM Equity … Organica $4 MM Equity QD Jason $6 MM Equity Ecolibrium $1 MM Equity Infuse Capital $5 MM Haitai $9 MM Equity Microvast $25 MM Equity Sunpreme Silicon $25 MM Equity Attero Recycling $5 MM Equity & Convertible Shuoren Energy $8 MM Equity …… Husk Power Systems $0.4 MM Convertible Applied Solar $10 MM debt, $5MM Equity, $3.3 MM Equity Azure Power $4.5 MM Equity, $5.5 MM Convertible, $1.84 MM Rights Issuance Brazil, 2013 World, 2014 World, 2013World, 2012 Sri Lanka, 2012 China, 2013 India, 2012 China, 2011 India, 2010 India, India, 2010 China, TPG ART $25 MM Equity …… World, 2013 Nereus Capital $20 MM Equity Sinogreen Fund $20 MM Equity SINOGREEN FUND Kalkitech $1.35 MM Equity … RenewGen Ventures $2.2 MM Project equity China, 2012 India, 2012 Tianren Ecology $8.5 MM Equity …… China, 2013
21 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies
VC Team (DC, Beijing and Mumbai) - Decades of Experience 22 Nikunj Jinsi, Global Head Washington, DC Pravan Malhotra, Principal Investment Officer Mumbai, India Hoi Ying So, Investment Officer., Washington, DC Ruzgar Barisik, Senior Investment Officer Washington, DC Sean Petersen, Senior Investment Officer Washington, DC Xiaomin Mou, Investment Officer Beijing, China Sobhi Mahmassani, Assoc. Investment Officer, Washington, DC Peter Cook, Senior Investment Officer, Beijing, China Qinglong Meng, Investment Analyst Beijing, China Isabel Ramberg, Investment Analyst Washington, DC Nikhil Tambolkar, Investment Analyst Mumbai, India
23 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies
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 Treatment 24 Case Study – Organica Water Hungary Organica Water IFC Total US$4 million Equity Dec 2012 IFC 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.
Kaiima 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-Tech 25 Case Study – Kaiima Israel Kaiima IFC Total US$10 million Equity 2013 IFC 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.
Contact International Finance Corporation Venture Capital (CTTVC) 2121 Pennsylvania Avenue, NW Washington, DC USA 26 Media Inquiries: Josef Skoldeberg Communications Officer Nikunj Jinsi Global Head, Venture Capital Tel: /
IFC’s VC is uniquely positioned to accelerate early stage innovation in the developing world Relevant domain expertise (tech + sector) Venture fundsIFC Venture CapitalInvestment banks Global network of local expertise Limited in many dev- eloping geographies, especially IDAs Breadth of global net- work, at local level, across stake-holders Full cycle capital access Company building expertise Deploys only early stage capital Limited ability to fund across capital structure due to incentives Can seamlessly deliver financial products according to company maturity Deep technology expertise, building sector knowledge General knowledge in sectors, lack of technology expertise Deep knowledge across sectors, gaining technology expertise Core competencyExtremely limitedExperience from a decade in IT VC Success factors 28