VEF AB (publ) (VEFAB) Earnings Call Transcript & Summary

Welcome to the VEF 4Q '21 Earnings Call. [Operator Instructions] Today, I'm pleased to present David Nangle, the CEO. Please begin your meeting.

Thank you very much. Good morning, good afternoon, everybody. I'm Dave Nangle, CEO of VEF, and welcome to our Year-end Q4 Results Call. Thank you for participation. I'll be going through a set of slides that are on the media center, they'll also be on our website. And I'll turn out for usual, maybe 15 minutes going through the slides, just the highlights of the quarter and what's coming at us, and then I'll open up off to Q&A, which is probably the more interesting part. But to kick off on Slide 2, just some of the recent highlights that have kind of been hitting us over the fourth quarter and towards year-end. And I guess our NAV mark is front and center in that. And we ended the year with a $762 million NAV, that's close to doubling year-on-year from year-end 2020. Obviously, part of that is a function of the capital raise, $100 million [ either ] during the summer months. But on a per share basis, U.S. dollar was up 55% year-on-year. So effectively, it's been one of our strongest years since inception of the company and in terms of NAV and NAV per share performance in effect value creation. What's driving that? And a lot of this actually did come in Q4, and a lot of it [ owes ] down to Creditas. It's obviously, our biggest holding, north of 50% of our NAV at this stage. And they had a big funding round of Series [ F ], which is obviously well flagged and a lot of [indiscernible] around it. There were $260 million Series [ F ], and a lot of investors that are currently in the cap table and new ones of the [indiscernible] Fidelity came into that round. So it was good to see and puts our biggest and, arguably, our best company in good stead and for all the 2022 drove that at. It was also a big quarter for our third biggest company just by NAV size, which is Juspay, one of the leading payment companies and the leading one in digital payments, mobile payments in India. They closed their Series C funding round, the Softbank coming into that, ran a lot of cap table to solve right now. And they led that around $60 million Series C. We did our rights. So we still own 10% of that company and also our partners at Wellington came in. All public information, but it was great that Juspay and Creditas funded in the fourth quarter. And I think -- I just jump to one point beyond the things what is good across the top names in our portfolio, especially in the window of volatility like we have right now as we headed in the early part of 2022. Top 5 of our portfolio names from Creditas, Konfio, Juspay, TransferGo, all raised sized capital in the second half of last year. So in many ways, these are well capitalized for growth, which is continuous and pace at all these companies. Also, they're well capitalized to withstand many market storms, and just not to be out there trying to raise money in windows like this, you'd rather avoid them if you all would. And I think another key interesting point this year, which kind of came on through so was the fact that while our investors give us capital to put through work in some of the best private fintech companies in emerging markets, we're seeing a lot of the bigger public institutions following suit and joining us in these companies or even vice versa, names like Wellington and Creditas -- Wellington and Fidelity have come into portfolio holdings across Brazil and in India like Creditas, like Juspay and then after Go, JUMO . So it's a testament to what we're investing in that our investors are willing to put their capital directly to work in some of these bigger, broader names that are moving towards public status. And I guess on the market volatility and backdrop, I'll talk about it a bit more, but it's something that we're very aware of, both the downside risk involved as well as the upside potential and opportunity. It's something that we live and breathe over the last 7 years in emerging markets, private investing, but being a public market investor. And moving on to Slide#3, just some of the headline numbers you would have seen and as the results came out this morning, NAV, $762 million. So we're becoming a sized company at this stage, and dollar per share $0.73, obviously up 55% year-on-year. I think on a SEK basis because we're listed in Sweden, our share price is in SEK, we closed the year at SEK 6.61 per share. And I was going to share price close to SEK 6.05 despite discount, but dip since then has come back as it's been in the market. And from a NAV evolution over time, this chart, it's a bit of a J curve. It's quite nice to see. I'm not going to extrapolate that for at this stage. But up end to the right, has been the mandate and the gold create value for shareholders as we go and some of that NAV, obviously, is part of that NAV increase is capital raise that we've gone to with the support of our shareholders over the past 15 months. And a lot of it's just natural value accretion, true mark-to-model, mark-to-market, and exits, obviously, over time where we've exited names like Tinkoff and EasyGo with a decent amount of value creation, about 60% IRR in both cases. And from a share price evolution and NAV per share, yes, everything was going well until the year-end. Clearly, market pullback in the tech space specifically and growth stocks, obviously, hit our share. So the NAV now per share has been on the up, and the discount has widened, a bit of a pop in the share in the last few weeks. But we are very much focused on the company, we are focused on the companies we invest in, making sure we continue to value -- create value through the cycle. And what we find is the share price journey takes care of itself and over time as we continue to do that. From a portfolio point of view, the summary at year-end, we're at is where the concentration is the word, but that's always going to be the case with us. I think with the capital we put to work in Q4, we put nearly $37 million in 4 companies with $25 million of that going to Creditas, $5 million into Rupeek, $6 million into [indiscernible] and to Juspay and a small amount to Abhi. But Creditas is 52% of our NAV. And as I've said many times before, concentration is the goal, amount of risk. We strive to find ones in the generation companies at best. And when we do, we try and get as much capital as is possible at a reasonable return. And if you book Creditas and Konfio together, that's 70% of our NAV and the top 5 names are 81%. So there's levels of concentration as names start to break out and become bigger within our portfolio, and we're very comfortable with that trend and actually seek it. At year-end, we had $62 million of cash. I'll talk about pipeline in a second because, I guess, when we raised that $100 million back in August of 2021, we told shareholders we had both internal and external needs for that money, some of those internal needs have come to fruition with the portfolio investments in Q4 and some of the pipeline conversion will be more of a Q1 event as we're taking into. Moving on to the next slide, just a little bit of market volatility and what we're seeing and how we're thinking and, I think, first and foremost is just to let investors know that we're very aware. We don't live in a bubble of private VC land where we don't know what's happening in the public markets. We are public market creatures, and we've always worked in public markets. Our shares are listed, and our people who've backed as our public market investors and unless they're always on our back. So we're very aware of how public markets work and how efficient/inefficient they can be over time and the good times and bad times to come at market. So it looks like this we naturally have a defensive mindset, and we're nothing [indiscernible] in what we do. We're not short term as in nature, but we're very aware. And I think just on our side, we have a strong track record people ask about our NAV, but just on marking our NAV, marking it up, marking it down. We aggressively marked it down in the start of COVID when we've got specific investments wrong, we've marked it down or mid-cycle. And very happy to do that and very comfortable to do that. I think we've always had a conservative bias towards our NAV marks or companies and is no point getting carried away with market euphoria. We look for averages. We put discounts in. We look for logical comps as opposed to trying the best or biggest 1 in the market and putting a fat multiple around the company because it only comes back to bite you. I think we're grounded in public markets through our history. And at the moment, our NAV benefits, our NAV is a function of, obviously, the transactions we did in the last 5 months, but a lot of those transactions were grounded in public markets yet again, with like the Fidelity, Wellington, et cetera, being part of or even meeting some of those rounds and some of them were done in December when the volatility started. And also the 2 holdings that we have mark-to-model, neither when you are accounting SaaS space, the comps there have, actually, held up quite well and the kind of classic name that it's comped against globally in Sweden and in the U.S. And also Revo, on the buy now, pay later fronts, we avoid names like Affirm and AfterPay to trade on double-digit multiples of sales, and we're more in the low single digit when we compare it to small buy now, pay later companies in Australia and U.S. and also single-digit P/E because Revo is 1 of our profitable companies. So I think the key process always fundamental to the portfolio performing. We're very aware of markets and keep an eye on that, and we probably see as much upside from windows of volatility like this, as we do a downside risk. And a couple of portfolio companies just worth touching on. Creditas, there's not a lot to say other new news outside of the and the round itself. They haven't released Q4 numbers yet. And obviously, the last set of numbers were the Q3 numbers, and they show triple -- tripling of originations and revenues year-on-year for the core business. And obviously, the wind is in their sales in terms of core growth, the capital they've raised now and puts them in a strong position from what to do next. The plan was to be IPO-ready this year. That plan is still very much there, and it's public information. Whether one pulled the trigger on an IPO is always a function of -- more function of markets and readiness because we will be ready. And -- but as position sits, it sits at $394 million and as -- within our NAV, 52% of our NAV. We were with the team on the ground back in November. That was our last trip and it's very strong across the board in terms of the teams, the people they've hired, the expansion to new lines of business, the growth that we're seeing and all is coming out of that. So we're very comfortable putting additional capital to work in that name in Q4. And then Juspay, obviously, our third biggest holding. And this is one that's really come through nicely for us where we backed it. It was kind of under the radar when we backed it back in, I think it was 2018, 2019. And we took a 10% position in that company, brought our partners Wellington into that. We invested $13 million at the time. But here we are a couple of years later with them raising $60 million at a significantly higher valuation. We're keeping our stake in that company. It's one of the fastest-growing payments companies we've seen in the very exciting India digital payment space. They've got a number of different functionalities within the business. Obviously, it's mobile payments first and they sit within the apps of the big e-commerce and marketplace giants in India so they've grown with their partners, whether it's Uber and all the e-commerce players there and the other mobility players. But at the same time, they've got a full product suite within there as well of payments processing. They do a lot on the UPI side, two-factor authentication. So a number of solutions, the real suite of solutions in the payment space and for the big Indian players. And I guess a final slide, we're touching on 15 before I kind of wrap up. And this is just something that's kind of crept up on us over time. Initially, we were working with some of the bigger investors globally to access their capital to put to work in the private fintech space. And that's been a trend and a theme that's been working very well for us over time, and the relationships have grown, and we've been showing these assets to our bigger backers. What's happened over the last 12 to 18 months, it was nice to see it's kind of been organic in nature. Some of these big investors have been investing directly in the companies in our portfolio as they move closer to a public market status. And I think Creditas is the best example of that, but Juspay, BlackBuck and JUMO are also in that. And it tends to be the bigger markets like Brazil and India that attracts this capital. So it's been a nice evolution of trend and theme, and we're very happy to see it continue. And final slide before I open up to Q&A is just a summary of the investment case and outlook. Not too much of a change here besides the backdrop that we have. But the NAV has been good. We've been delivering there and the base is strong for continued growth. Obviously, 2021 was a very strong year for the company and markets in that. Obviously, the year has started a bit more volatile from a market point of view, and -- but we're still very comfortable with what we see in our portfolio for value creation as we look into the year. And, I think, Creditas has to be key for us going forward. I think that's just obvious, 52% of our NAV, so we will live and die with their success, and we're very comfortable with that trend. I think, upside, downside -- downside risk is covered by the fact, at least in the short term, that our top companies will all raise capital and raise it in size from strong shareholders. So we're okay with market headwinds, we're okay with volatility. It doesn't mean we're complacent. We've got a defensive mindset and we are also open to the opportunity that volatility brings, knowing that we invested in EasyGo in the [indiscernible] on the streets. We invested in Creditas and Tinkoff when Brazil and Russia macro on a low ebb and no one wanted to know. So when a lot of the hot money disappears, we will be there, and we're well positioned, and we're very happy to put more capital to work. And then on the pipeline front, I haven't talked too much about this, and I'm sure there will be questions, but -- and I can't get too far ahead of myself, but we have got pipeline to a [indiscernible] pipeline that we are converting deals to be done in Brazil and in Pakistan. Brazil more of size, Pakistan more early stage because of the nature of the market. It was a busy year last year. We take time to convert. We're in no rush to convert. Very happy to do nothing if nothing hits our -- kicks all our boxes. But I would expect in the Q1 of this year, to be able to close or announce 2, maybe 3 deals, but then somehow even creep into Q2. So that's where we are on the deal front. And -- but I think I'll stop there. And operator, I'm very happy to open the floor to questions at this point.

[Operator Instructions] Our first question comes from the line of Joachim Gunell of DNB Markets.

So obviously, we've seen a lot of activity here throughout this quite healthy funding window. So as in your planning or strategy for the coming year or years, how do you think about that balance? I mean, we've seen how Latin America and these investments tripled in 2021. How -- I mean what is your view about how potentially rising interest rates in these regions could potentially decelerate the money flows, et cetera? And -- yes, basically, with this backdrop, would you expect a step back in activity throughout 2022? And have you started seeing any signs of that, call it funding is drying up in any of your emerging markets?

Yes. Okay. It's all a very fair questions, then we could probably spend an afternoon talking about it. But what I'd say is, from invest point of view, I guess we've invested through the cycle. So there's an element of your -- you don't get caught in any kind of duration risk, so you're not all in 1 window or not. I know you're kind of constantly investing and all of you are going to be aware of the market environment that you're in and the price that you're paying. But -- so I'd like to think that we and anybody who speak to in the market would still be investing, and there is a lot of dry powder out there on the private side. That said, when public markets do what they do, I guess the crossover money stops, some of the more recent fund raises will be difficult on the private side. I'm just talking to other VCs, everybody takes a step back, everybody takes a breath. And at the start of COVID, everybody did the same thing. It's like a knee-jerk reaction, it's logical risk management. So everybody is -- I'd say just one step back as opposed to on the front foot. And the interesting thing is we've seen market volatility like this before, where markets that could turn down. Obviously, from a macro point of view, globally, interest rates are on the way up, but it's not like a knee-jerk reaction. It's been well flagged for a long time, it's moving and everybody knows about it so not like a shock in any way. But I would expect a little bit of an ease back on either volume or pricing, at least initially, this part of the year, I'd like to think that brings a bit more sense into pockets in the market where there was no sense. Are we seeing it really impact players yet, not really. Deals are being announced, but a lot of those are from last year or closed last year. It just takes time to do the legal in all the details. We have 1 company out there raising at the moment. They have 2 term sheets. So it's happening. I think it's more market for quality than the lack of quality where everybody is getting funded now, the better names get funded or be a bit more price sensitivity. But I'll tell you again next quarter and see how the private side reacts to the public moves. And I guess, as a hybrid fund, where we invest in private where we're publicly listed, I guess I'd like to hope we're more in tune and more sensitive to that. But we talked to the soft banks of this world and they're very in tune as well. And they are more of the price setters and the trend setters and these things. So yes, I think we will see some kind of pullback on volumes, pricing, how deep or dramatic it is, I think it will be a function of how the public markets go from here, which has been, obviously, dark in January, but a bit of a kick back in February. So I hope that answers your question, but feel free to follow up.

Yes. No, I think that answers it. But I mean, we are also seeing a shift to the VC ecosystem here. I think you alluded to this in the report that I mean potentially led by Sequoia here where venture capital funds no longer sell down at IPOs, so they more suit themselves as another, call it, funding event as opposed to an exit developed. Can you say anything about your, call it, strategy if you are seeing any? Or should we expect any new ones shift to that when we approach now potential listings on core holdings?

Yes. No, I think it's a great move by Sequoia. Obviously, it helps in somebody big, that's something that you've already done or are doing in terms of the permanency of capital aspect. I think the ideology around -- you find ones in a generation assets as we have as many other VCs have and then you flipped them at IPO and then they still go in other 10x because the hard part of the journey is getting from 0 to 1, then go from 1 to 100 might be easier. So that ideology does make sense to me. And arguably, if you were in early in a company, you should know it better than the market, albeit you got to be careful of internal biases and inertia. So I think we're very comfortable. We think we always have been because we started this offer Tinkoff of holding a public fintech and albeit we inherited that. I think this was Creditas to the first time we take it from the private side to the public side. And I guess we would make a decision. -- at IPO, whether the IPO was successful, failure, right pricing and where we sit in our position. And I think we're very comfortable holding that position for longer. And I think then as you move into a broader debate of and we did at the lot. We think a lot of our strategy is always fluid. But we are -- I think we are EM fintech experts. And with -- when we started it 7 years ago, there was only private fintechs, 1 or 2 public fintechs in EM, but there's been a lot of listings in Brazil, India and across the emerging world. So there's a real range from the private side to the public side, where we could potentially put our capital to work, especially when you get distortions in the public side where the public may be cheaper or better value, but a long-term value than the privates in that window, and we could take side positons and sit on them for a longer period than maybe the classic asset managers are because we've got permanent capital. So a lot of the things going on in their head, but on a very simple basis, we could hold the publics for longer that we bring public. And we got that ideology with Creditas, and we're just thinking about that. But that can happen, for sure.

That's clear. And final one for me. I know you obviously love your portfolio with the shares trading up as much as the discount to NAV currently to what I perhaps think and in your view, I guess, if not conservative, at least justify that. Is there a reason here why you wouldn't buy back shares starting today? .

There is a technical -- like you fundamentally know because some of the easiest value you can create for shareholders and everybody involved is to buy back our own shares at a discount that gives us our 30% IRR threshold, especially if you believe in our companies that are today, if not a higher one tomorrow. Technically, I think at this point, I will come back to in the details but we can't buy back our shares. And it's around the ideology of us moving from Nasdaq First North to the main board, which is a fluid process. More details to come on that, but we're not in a position to be active in the market because of that, our hands are a bit tied -- and I'll come back to you on detail properly on [indiscernible]. But fundamentally, yes; technically, no. .

Next question comes from Patrik Brattelius of ABG.

A few questions from my part. First one, just a clarification there regarding the mark-to-model valuation. Are the multiples used for the market-to-model companies based on multiples as of last December? Or are they based on multiples more closely connected to your reporting date?

We would value the portfolio at year-end. So it would be a valuation comp set as of year-end '21 as opposed to, I guess, today or last week. So it's, I guess, there's a 4-week gap between year-end and when we reported. So yes, and the 2 names within that, that we've done on a mark-to-mark basis that are Nibo and REVO. I guess the ideology is share prices would fall, would mark-to-model fall. We'll reprice again, obviously, those 2 assets, which make up a 3% linger for NAV at the end of Q1, but Nibo in the accounting SaaS space with the likes of [ Intuit ], et cetera. Zero have held up quite well. We've been tracking that. There's a little bit of sell-off in the buy now, pay later and some of the consumer lenders across East Europe, but we've had REVO in quite a low valuation. So we're quite comfortable there, too, I think. But we'll review that again at the end of the quarter. So sorry, to answer your question, Patrik, year-end.

Yes. Okay. Great. Yes. Some color on that, too. Perfect. Then as you highlighted on the first slide there, you -- we can see that your 5 largest holdings are well funded. But do see any other holdings now being able to drive any material NAV growth the coming 1, 2 quarters? Or do you expect the NAV to be rather stable around this level?

Yes, it's fair. I've put a bit of a defensive bias in the presentation just because I've been getting a lot of questions around downside, it's both the upside. And just to get one more on the downside coverage. The top 5 companies all raise capital. Number 6, REVO is profitable. Number 7, Rupeek just raised capital. So I think with defensive nature just to answer the defense more fully where we feel like we're in a good position. But we're all interested in the upside from here. So I guess if you look at something like Creditas, and that's 52% of your NAV, is that going to do anything in Q1 or Q2. If they got the IPO at the door in Q2, I think that would be super early, and that would be a potential event. But -- that's not my -- I wouldn't say that's plan #1 given everything that's going on. And so I wouldn't expect anything from our side in Creditas up or down in the first half. So let's see where markets go. Konfio, once again at the second half, NAV mark-to-model move, and that's been growing in line with [indiscernible], just paid us rate. So I guess reading between the lines, the bigger names -- the predictable nature of the bigger names doesn't show those big 3 names doing too much in the first half besides obviously been growing well, must be very happy with them. Those NAV moves are probably not a first half event.

Okay. Yes. So no, that's a little bit what I expected, but I just wanted to get some clarifications and your view about that. And as a last question for me then is if you could highlight where you currently see the better IRR potential in your view?

Yes. Look, we never see short term. It's amazing that the big 3 assets, Creditas, Konfio and Juspay are growing at some of the fastest paces within the portfolio. They're all going 2 to 3x year-on-year. So it's great to see that. It's not into perpetuity, but we get that again in 2022 into '23. We're sitting pretty with a nice compounding top end of the portfolio, no offense to the rest. And I guess from an outside the portfolio, we spend a lot of time in India and Brazil. It continues. We were in Brazil, as I said, in November last year. We came back once again, super excited. It is the land of kind of scale, high-margin niches. We keep on finding new areas we hope to invest in, in related fintech spaces. So putting more capital to work there. India keeps on stocking us in. We're building out a nice early ecosystem portfolio in Pakistan. And I guess, regionally, we're doing the work now in Indonesia. We've kind of picked up from a Southeast Asia perspective with the market that deserves our time and efforts, it's overdue, and that's what we're focusing. And then from a segment point of view, just more on Web3, crypto, digital assets where that's going. A lot of our companies are moving in that direction, at least as part of their product suite. A lot of capital has gone in. It's not going anywhere. It will be some part of the future of finance, and we don't know what percentage, but I think the risk on us of not being involved in some shape or form, given our mandate is growing by the day. So we're doing more and more work there.

Our next question comes from the line of Herman Wartoft of Pareto Securities.

Alright, perfect. Dave, just a couple of questions from me. So starting off, I would like to just dive a bit deeper into this broad sector derating as you're right here on Slide 7 also that you see a lot of micro level performance issues in emerging market public fintech. So I would just wonder if you could elaborate a little bit on this and what you're seeing in the market at the moment?

Yes. Look, a few things on this. So I'll pick an example that suits me, but you take someone like TransferGo in the remittance space. And obviously, it's last -- marked the last investment round, but even that round and when we are marking it to model, we had comps like Wise, and we had comps like Remitly trading on 10 to 20x forward revenues, and we had TransferGo in the single-digit territory. So now that they'd be rated at a single-digit comp multiple, and there are in line with TransferGo and TransferGo is growing faster. So that's the kind of how we think about things. What you're looking for logical multiples and logical valuations. But we try and be ahead of these things and just trying to stay comfortable with our marks so that we can never get caught too much on the downside. And then there's a lot of upside as and when we IPO or exit those. But obviously, the derate in comps, those tend to make the portfolio look a bit more fully valued when at the end of Q3, I would have argued aggressively that, and this was a portfolio that was aggressively undervalued. And specifically to your point, though, I want to say, yes, there has been a market derating. But then you move into EM fintech. And what we found, this is -- you are not grabbing excuses, but just like looking at facts. We looked at something like Tinkoff's deratings, which has always been a benchmark for us, and that's a function as much of Russia, and it moves at it's markets. We look at Kaspi in Kazakhstan and other fintech benchmark, it's derating is much from, I guess, the volatility you've had from a Kazakhstan perspective as geopolitical and political. And in Brazil, some of those LatAm fintech benchmarks and names like Stone and [ pegs ] in the payment space around their own micro level performance issues and make derated aggressively on the kind of on top of the sector derating. So there's a bunch of micro level that performance issues that we've seen in a company, it's not that we track them intimately, but I've seen those names double derate as opposed to just market derating, and then some of the better names are holding up better. So these are the things that we are aware when we look at our multiples and our comp sets, we're talking to auditors. We're looking at our own companies and seeing what they're worth and what they think they're worth in relative to market. And I always trying to look at the change or comp groups all the time, but you're looking to constantly evolve and find the right comp group. And for something like Nibo [indiscernible] easy because there's 3 or 4 listed global accounting SaaS plays out there. For something like Creditas it's a minefield because they keep on changing their business model and growing and broadening and it's a little bit local and then you take some international comps as well. So all that in there is what I'd say.

Yes, I see. Perfect. And just if you could also just kind of flip it a little bit. Has this derating led you to kind of reconsider some deals? Or can you see some other opportunities opening up for you to be maybe a bit more aggressive here with adding new portfolio companies, et cetera, in this window? .

Yes. No. it's fair. We did announce at our Board actually as well because we had 2 deals in Brazil specifically that we're closing, and we would have done the dance with them in terms of valuation and deal structure. And actually late December, mid-to-late December, so we're already in this window and Creditas round as well in this window. And no, we haven't needed to change the price that we're paying for these deals, there -- the January performance evolved and we are just compounded what we want to do here. So -- and we're looking at them -- there is always a short-term multiple analysis. But realistically, we're putting capital to work. We're looking at 5 years. We're looking at true cycle multiples. We're looking for those IRRs and it generally suits us well. I think from opportunities right now, the penny hasn't dropped really as the same came on the private market side yet. It really depends how deep and protracted any kind of sell-off and public markets go to. And -- but no, we're still shopping. We're still out there, and we still have capital to put to work. We're in no rush, I think, the rates on the private side, all good for us. So maybe it will be market specific or segment specific, but it's a bit early to say.

Yes. Fair enough. And then maybe just a last one for me. I mean if you can just talk a little bit more specifically about Creditas. I mean, we've seen inflation running quite hot in Brazil and also the Central Bank raising rates a lot during 2021. I'm just wondering if you can just elaborate a little bit on what and if Creditas has done something to mitigate this in their raising rates towards the consumer? And has it affected the kind of loan demand and growth, anyway, as you can see it recently?

Yes. No, that's fair. Look, the bigger companies get, the closer they get to be macro proxy. So as a good financial analyst, you have known a lot of financial services companies and banks are just macro proxies. So you can do all the micro level or not if you want, but GDP, inflation, interest rates will derisk when it comes to their broader share price movement. So Creditas is getting bigger. It does have some macro tenancies, both tailwinds and headwinds. What I'd say is they're running about 2% market share in secured lending. So they're very small in the overall secured lending pot in Brazil across payroll, home and auto. There's a lot of recycling to them on the better products. So the recycling out of the unsecured part towards the secured part because it's better rate, lower rate products. So even as rates are higher, they're higher again in unsecured, but they're lower in secured. So the structural bias to our Creditas does. They have been up in rates, they have to and they're funding themselves on floating with just the 3-month cycles of fixing those floating rates. So on the asset side, they have been upping their rates but so has market. With GDP growth in Brazil where it is with rates up and inflation up, it will be a -- definitely from a market point of view, it will be a slower growth year. And that's -- I would like to think that from a sector level across the board. Creditas grew at an [indiscernible] 3x in 2021. We'll see the final numbers. I doubt we're going to see a 3x year this year. I think in our models we're closer to 2x, but then we were closer to 2x again in '21, and they kind of blasted through that with their own delivery. So a slowdown year-on-year, but still a fast growth here.

We currently have one further person in the queue. [Operator Instructions] And the last person in the queue so far is Bryan Satterly from Robeco.

A lot of my questions have already been answered already. But just one regarding the deals in the pipeline. I know you said they might get delayed a little bit to look at some of the recent deals [ Beth ] has done, you've taken generally a lower ownership percentage than what you had done historically. I'm referencing specifically like a BlackBuck or Rupeek. And I know India is its own market with its own rules and own valuations accordingly. But for the deals upcoming, how do you think about the percentage of ownership? Has anything changed? Or is the strategy still the same, I imagine?

Yes. Look, it's a mix, actually. So we've got more comfortable with the fact that if we find a great fintech company, why should we box ourselves in, we need to own at least 10% or need to have a Board seat or as we've done in the early stage of kind of our strategy and ideology. So we stretched our wings a bit with, and you mentioned BlackBuck as one. So of the 3 deals that we're looking at doing, and once again, I don't want to get ahead of myself because things can change, but one is super early stage. And we'll lead that on a nice double-digit percentage if it comes to roost. One is Series A, I believe, and we will lead that and so classic VEF and own 10% plus minus in that one. I have more in a little bit later stage, and we're part of a consortium of friends, and we'll take a smaller stack. I'm sorry, smaller stakes [indiscernible] BlackBuck. So a mix. And I think we're very comfortable with that mix. And if we're in with the right people, with the right story, we're very comfortable to have a 1% to 5% stake and not a Board representation, but full information rights once the legals are sound and the partners are good.

There are no further questions in the queue. So I'll hand back to Dave for the closing comments.

Yes. Look, thank you. Thank you, everybody, for your time and for following our story, for supporting us. It's always appreciated. And thanks for the interaction, I'm at the end of the call. I'm always better than me talking at everybody. And we're here to answer questions as we go in good markets and in bad, myself and Henrik Stenlund in our Stockholm office, always available to speak. So feel free to reach out. But thank you, and have a great end of your day.