1. finance
2. investing
3. venture capital

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: jskoldeberg@ifc.org
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