IFC Venture Capital Group Presentation for Beijing Energy Network / Beijing Energy & Environment Roundtable March 5, 2014 Contents IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies 2 IFC: Part of the World Bank Group IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment and Guarantee Agency International Center for Settlement of Investment Disputes Loans to middle-income and creditworthy lowincome country governments Interest-free loans and grants to governments of poorest countries Solutions in private sector development 3 Guarantees of private sector investment’s noncommercial risks Conciliation and arbitration of investment disputes IFC Overview • 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 - Manufacturing Service - Infrastructure - Telecoms, Media & Technology - Financial Markets - Health & Education - Oil, Gas and Mining • Holds $77.5 Billion in total assets on the balance sheet 4 IFC’s Three Businesses Investment Services IFC Asset Management Company Advisory Services Loans Access to finance Equity Syndicated loans Environmental and Social sustainability Wholly-owned subsidiary of IFC founded in 2009 Trade finance Investment Climate Structured finance and securitized products Public-Private Partnerships Invests third-party capital alongside IFC in a private equity format Infrastructure advise Allows equity investors to benefit from IFC’s expertise in achieving strong equity returns as well as development impact Risk management products Local currency financing $18.3 billion invested in FY13, $49.6 billion committed portfolio Over $200 million in fee income annually (FY13) In USD as of 30 June 2013 5 $5.5 billion under management (FY13) IFC Invests across all Regions and Sectors $18.3 billion invested in FY13 South Asia 9% Financial Markets 20% Middle East & North Africa 11% Trade Finance 35% Global 1% Latin America & the Caribbean 26% Infrastructure 12% Oil, Gas, & Mining 2% Telecom & IT 3% East Asia & the Pacific 16% Funds 5% Agribusiness & Forestry 7% Consumer & Social Services 9% Manufacturing Europe & Central Asia 18% 7% 6 SubSaharan Africa 19% IFC’s Priorities Long-term client relationships in emerging markets Local financial markets Frontier markets Strategic Focus Areas Climate change and environmental & social sustainability Constraints to private sector growth in infrastructure, health, education, & the food supply chain 7 IFC’s Global Reach • 100+ country and regional offices worldwide, AAA credit rating • 4,000+ staff (57% are based outside Washington DC) Moscow Almaty Washington Istanbul New Dehli Cairo Mexico City Hong Kong Dakar Port-of-Spain Bogota Nairobi Sao Paulo Johannesburg Beunos Aires IFC HQ/Hub Offices IFC Operational Centers IFC Country Offices 8 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case studies 9 IFC 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. 10 IFC Track Record in Venture Capital Accelerate High Impact Early Stage Innovation for Emerging Markets Expanded Cleantech Cleantech -Dedicated cleantech VC platform established. IT Services - Selective VC investing in IT services with - focus on tech transfer and Asia - Expanded into Agribusiness and Water - Regional Expansion into Africa, MENA, LAC ESIP Corporate Venture Platform - Expanded VC mandate beyond cleantech to priority sectors: ITenabled businesses, education, smart systems, health care - Investing worldwide with a focus on Emerging Markets. - Focus on China and India TIMELINE (FY) 2004-08 2009-10 2011-12 2013/14 and onward Cumulative # of investments 18 32 49 62 (FY14 to date) Total $ invested $110M $193M $491M $582M 11 Strategic Sectors of Focus Energy Renewables and Generation Energy Storage and efficiency LED E-commerce Business2Business, Business2Consumer Consumer2Consumer Industrial Biotech Environmentally friendly Bioderived Chemicals/Fuels/Materials for various applications Agri-tech Land management Natural pesticides natural fertilizers Cold chain logistics Telemedicine, healthcare IT, cost efficient innovative devices for human Med-tech health Edu-tech Smart Systems Smart grid, Smart buildings Embedded IT Water-tech Filtration & purification Water conservation Wastewater treatment Waste Recycling Waste to Energy Telemedicine Healthcare IT Innovative devices for human health Online education Remote learning Innovative learning models 12 Recycling services Waste treatment Waste to fuel How do we define Early-Stage? Post Technology Risk <-> Pre Mainstream Industry Departments Small deals (albeit not always) Weak Financial Sponsor Disruptive market change Multiple short term capital raisings Technology or business model innovation Complex and multilayered capital structure Incubation Growth Early-stage Mid/Large Cap Mature Investor profile Friends/family, noninstitutional Venture Capital PE, some late stage VCs, some debt Risk profile Speculative – conceptual plays, incubation High Risk – Post product development, some revenues, high growth Medium – Likely profitable Deal size < US$ 1 mm US$ [1- 15] mm US $5-25 mm > US$ 30 mm Investment risk Technology risk, very limited exits Market, execution and exit risks, some technology risk Late stage execution risk Pricing, M&A, margins IFC Department InfoDev Venture Capital team Industry Departments Industry Departments 13 IFC, PE, debt investors, public markets Low IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case studies 14 IFC’s Venture Capital Team: A Valuable Partner Core competence in emerging markets • Decades of experience as largest multilateral source of equity financing in emerging markets Patient capital Full cycle capital access • Can seamlessly deliver financial products according to company maturity Deep domain expertise • Deep knowledge across sectors, with technology expertise Breadth of global network • Network at local level, across stakeholders Convening power • Ability to catalyze co-investors Active portfolio management • Expert investment team can add significant value with hands on involvement 15 IFC Venture Capital has developed a strong network of coinvestors… 16 Investment Products and Returns Late Venture & Early Growth Companies Cleantech Innovation Facility 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 17 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 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies 18 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. 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. 19 IFC VC – Overview of Committed Investments to date Fluidic Energy $7 MM Equity CVentures $8 MM Equity Kaiima $10 MM Equity… World, 2014 Brazil, 2013 World, 2013 Tianren Ecology $8.5 MM Equity …… China, 2013 QD Jason $6 MM Equity TPG ART $25 MM Equity …… Organica $4 MM Equity China, 2013 World, 2013 World, 2012 RenewGen Ventures $2.2 MM Project equity Sri Lanka, 2012 SINOGREEN FUND Ecolibrium $1 MM Equity Infuse Capital $5 MM Sinogreen Fund $20 MM Equity Nereus Capital $20 MM Equity Kalkitech $1.35 MM Equity… India, 2012 India, 2012 China, 2012 India, 2012 India, 2012 Microvast $25 MM Equity Sunpreme Silicon $25 MM Equity Attero Recycling $5 MM Equity & Convertible Azure Power $4.5 MM Equity, $5.5 MM Convertible, $1.84 MM Rights Issuance China, 2011 China, 2011 India, 2010 India, 2010-2012 20 Applied Solar $10 MM debt, $5MM Equity, $3.3 MM Equity India, 2010-2012 Husk Power Systems $0.4 MM Convertible India, 2010 Haitai $9 MM Equity China, 2011 Shuoren Energy $8 MM Equity …… China, 2009 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies 21 VC Team (DC, Beijing and Mumbai) - Decades of Experience Nikunj Jinsi, Global Head Washington, DC Hoi Ying So, Investment Officer., Washington, DC Ruzgar Barisik, Senior Investment Officer Washington, DC Sobhi Mahmassani, Assoc. Investment Officer, Washington, DC Pravan Malhotra, Principal Investment Officer Mumbai, India Qinglong Meng, Investment Analyst Beijing, China Sean Petersen, Senior Investment Officer Washington, DC Isabel Ramberg, Investment Analyst Washington, DC Peter Cook, Senior Investment Officer, Beijing, China Nikhil Tambolkar, Investment Analyst Mumbai, India Xiaomin Mou, Investment Officer Beijing, China 22 IFC at a Glance IFC’s Venture Capital (VC) Expertise Work with Us VC Portfolio VC Investment Team VC Case Studies 23 Case 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 Treatment 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. 24 Case Study – Kaiima 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; Bio Agri-Tech Israel Kaiima IFC Total US$10 million Equity 2013 Kaiima's non-GMO technology is also targeted at no-till applications for smallholder farmers. Kaiima was named as a Global Cleantech 100 company. 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. 25 Contact International Finance Corporation Venture Capital (CTTVC) 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA Nikunj Jinsi Global Head, Venture Capital Media Inquiries: Tel: 1 202-473-6978 / Josef Skoldeberg Email: [email protected] Communications Officer 26 Appendix 27 IFC’s VC is uniquely positioned to accelerate early stage innovation in the developing world Success factors Venture funds Investment banks IFC Venture Capital Relevant domain expertise (tech + sector) Deep technology expertise, building sector knowledge General knowledge in sectors, lack of technology expertise Deep knowledge across sectors, gaining technology expertise Global network of local expertise Limited in many developing geographies, especially IDAs Limited in many developing geographies, especially IDAs Breadth of global network, at local level, across stake-holders Deploys only early stage capital Limited ability to fund across capital structure due to incentives Can seamlessly deliver financial products according to company maturity Core competency Extremely limited Full cycle capital access Company building expertise 28 Experience from a decade in IT VC
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