Amadeus. Private Equity and Venture Capital Forum Argentina. Venture Capital in Emerging markets 1 July 2016

Transcription

1 Amadeus Private Equity and Venture Capital Forum Argentina Venture Capital in Emerging markets 1 July 2016

2 The Digital Prosperity Opportunity Three Converging Megatrends THE EMERGING MIDDLE CLASS A DIGITAL TRANSFORMATION THE CLOUDIFICATION OF IT 100% 80% 60% 40% 20% 0% World GDP Developed Emerging % 38% 43% 46% 50% 52% Smartphone users (Billions) % of mobile phone users Cost to store 1GB for 1 month $19.00 $0.16 $ Billions of people rising out of poverty in EMs Disproportionate growth in consumer spending as incomes rise SIM penetration >1 per capita in most EMs 2+ billion smartphones by 2016 Much cheaper to start a tech company than 10 years ago Can be done from anywhere Large new opportunities for digital entrepreneurs in emerging markets Sources: Cloudification : NESTA 2011, Emerging Middle Class: E&Y, Skolkovo, EIU, IEMS; A Digital Transformation: emarketer Dec

3 Emerging Markets Maturing Notable Technology Exits AMERICAS EMEA ASIA 15

4 Sectors: Deals E-commerce vs. Search&Booking vs. Delivery&Supply Chain Search&Booking Other Financial Delivery&Supply Chain Social Platform Media&Content Internet Services Advertising/Marketing Software Financial Services E-commerce Data Analytics Games&Apps Security Other Business/Management Hardware Medtech Cleantech Education Communications&Networks 4

5 Amadeus

6 Countries Deal Heatmap The global hotspot is India with 160 deals Countries Deal Heatmap The global hotspot is India with 160 deals 6

7 No of Deals Amadeus Private Equity & Venture Capital Forum Argentina 1 July 2016 Quarterly Trend Growth in general every quarter Modi Elected as PM +123% India Rest Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 7

8 Emerging Markets Tech Clusters There are 10 significant tech clusters in the emerging markets: Buenos Aires, Sao Paolo-Rio, Lagos, Nairobi, Istanbul, the 3 Indian clusters (Mumbai, Delhi, Bangalore), Singapore and Hong Kong 8

9 Argentina is the third largest VC market in Latin America (Capital Raised US$ ) No of Funds 9 Source: Latin America Private Equity & Venture Capital Association

10 Latin American VC Investment by Country (US$) ( ) Peru 2% Colombia 3% Chile 4% Other 7% Argentina 7% Brazil 64% Mexico 13% Source: Latin America Private Equity & Venture Capital Association 10

11 Emerging Markets Tech Clusters Our coverage Emerging Markets Tech Clusters 11

12 Amadeus dealflow mirrors the market Amadeus saw 20% of deals done Deals Equity 100% 90% 80% 70% 60% 50% 40% 30% 100+ ($m) ($m) ($m) ($m) 5-10 ($m) 3-5 ($m) 20% 10% 0% All 12

13 The Digital Prosperity Opportunity A Global Perspective Latin America EMEA South Asia Southeast Asia Depth Unique understanding of local ecosystems Access local dealflow Financial Services Digital commerce/content Breadth Marketplaces/Network Svcs Unique ability to compare key sectors across markets B2B/SMB SaaS & Svcs Pick global best of breed 13

14 Target Company Key Characteristics Product relevance for emerging markets and demonstrated traction in those markets Strong and (nearly) complete team Series B+ financings Leverage Amadeus experience and partner relationships Strong local syndicate partners Strategic relevance for potential acquirers 14

15 The Digital Prosperity Opportunity A Global Perspective Amadeus DPF Current Portfolio Latin America EMEA South Asia Southeast Asia Depth Unique understanding of local ecosystems Access local dealflow Financial Services Digital commerce/content Breadth Marketplaces/Network Svcs Unique ability to compare key sectors across markets B2B/SMB SaaS & Svcs Pick global best of breed 15

16 Bidu Online B2C insurance broker and price comparison 16

17 Bidu (1) Online B2C insurance broker and price comparison ACTION Deal Generation Company Profile DETAILS Company contacted Amadeus motivated by Amadeus track record of insurance-related investments and reputation in the venture capital community. Leading online broker and price comparison site for consumer motor insurance. Draws traffic through sophisticated marketing strategy, and generates price quotes though deep integration with insurers quote engines. Will eventually add other financial services products such as home insurance, loans and credit cards. São Paulo, Brazil headquartered. 17

18 Bidu (2) Deal profile and investment thesis ACTION Deal Profile Investment Thesis DETAILS Amadeus led R$20m (US$8.9m) Series B round with R$10m (US$4.5m) 14.3% stake after Series B $ bn brokerage pool exclusively in auto insurance Online insurance penetration <1% and should go to 20 30% in 5 7 years. Scalable business model Strategic industry and channel good M&A prospects if they achieve scale Strengthening management team Currently recruiting 18

19 Descomplica Online education and test preparation 19

20 Descomplica (1) Online education and test preparation ACTION Deal Generation Company Profile DETAILS Two existing investors approached us separately about Descomplica s Series C Descomplica is the largest online classroom in Brazil. Their initial market is Brazilian High School students preparing for ENEM (Brazil s largest university entrance exam). Their curriculum consists of 15,000+ proprietary videos and live lessons every day on web and mobile. Reaching a huge audience: 6+ million uniques/month; 800k+ registered users; 25m+ YouTube views Monetization through direct B2C freemium subscription of USD $3-$5 per month On track to achieve ~$6m in revenue 2015 (3X growth vs 2014) 20

21 Descomplica (2) Deal profile and investment thesis ACTION Deal Profile Investment Thesis DETAILS Amadeus led $7m Series C with insiders (The Social+Capital Partnership, Valor Capital Group and Valar Ventures) participating alongside. Seeded by 500 Startups and local angels Market entry point is test prep for ENEM (Brazilian university entrance exam). 6 million students sat for ENEM in 2014 Affordable pricing (enabled by digital channel) fills gap between high-end private tutorial and mass-market printed materials Opportunities to expand up- and down-stream in education chain, accessing new markets and boosting LTV: Degree equivalence and job readiness products for the ~50 million workers in Brazil who lack a high school degree Remedial tuition to alleviate 20%+ drop-out rates for 1 st year uni students 21

22 Summary Venture Capital in Emerging markets Long term macro trends are extremely favourable Significant exits are beginning to happen Internet services are the dominant opportunity but: E-commerce is very capital intensive Digital business models are more suited to smaller funds Digital goods (payments, insurance, travel, music, video etc) Marketplaces which do not hold inventory (classifieds etc) Argentina now number three in Latin America but ready to grow Political climate can make all the difference (viz: India) Amadeus has a clear focus on key clusters, and a clear target focus We are already active in Brazil and would love to engage in Argentina 22