Quikr profitable in one category – Kinnevik report

28 Apr 2017

Since selling its holding in Russia’s general classifieds site Avito, Kinnevik has had two major classified investments only: India’s classifieds horizontal Quikr, and Saltside Technologies.

In its report for Q1 of FY2017, released earlier this week, Kinnevik revealed a number of interesting facts about its two classifieds investments – Quikr and Saltside.

For instance, Kinnevik reported that one of Quikr’s five categories was profitable at the end of the quarter. Kinnevik also said Quikr received 11 million responses to ads in March 2017 (52 percent up on a per-listing basis). According to Kinnevik, Quikr continues to focus on deepening its involvement in the transaction process and will launch a platform to connect recruiters with consultants.

So, Quikr seems to be doing well. For Saltside, there were a few warning signs.

Saltside operates three major, horizontal classified platforms in Bangladesh, Ghana, and Sri Lanka (In Nigeria, Efritrin is run without employees, and Efritrin doesn’t appear on the company site anymore.

Going forward, Saltside will focus on the Asian markets, according to the Kinnevik report, which must mean that Toniton in Ghana will stand alone in Africa. The Kinnevik report tells us that Saltside had completed an internal reorganization to largely focus on its Asian markets, and further decentralize decision-making. So, at this time we do not know what that means for the offices in Gothenburg and Dubai.

No new job opportunities have been published on the Saltside site, which must be a sign that the business is contracting further.

Kinnevik also informed that Saltside’s regional platforms generated 3.5 million responses in March 2017, an increase of 20 percent from the same month last year. Small and medium-sized enterprise memberships continue to be a significant driver, and revenue more than doubled year-on-year, Kinnevik said.

The Swedish investment company Kinnevik is still investing in new companies, although the strategy is to get a slimmer portfolio.

With the release of its report for Q1 of FY2017 this week, the company also announced that it had acquired an 18.5-percent stake in a Swedish broadband and TV provider, with more than two million connected households. The company has a solid track record of growth, strong equity, free cash flow and high yield. So, it is not another high-risk investment, but a mature business – some might say, too mature. The investment is worth SEK 3.8 billion ($430 million U.S.).

The company has a solid track record of growth, strong equity, free cash flow and high yield. So, it is not another high-risk investment, but a mature business – some might say, too mature. The investment is worth SEK 3.8 billion ($430 million U.S.).

Q1 was a quarter filled with lots of investment activity, with two other new investments – although small. Firstly, Kinnevik invested SEK 112 million ($12.5 million U.S.) for 3.5 percent in consumer digital healthcare company Livongo, and secondly, it invested SEK 74 million ($6.7 million U.S.) in Babylon, a digital health company with more than 700,000 registered users. Digital health care is a new area for Kinnevik.

Kinnevik divested from two companies in Q1, receiving a total of SEK 2.1 billion. It got SEK 2 billion (€207 million) for half of Kinnevik’s stake in Rocket Internet, and SEK 50 million for its stake in Metro Sweden (including Metrojob). Our report on the Metrojob sale here.

The complete Q1 financial report is here.

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Lars Herlin

Lars Herlin is an AIM Group senior analyst for Europe, and our expert on Schibsted. He had a long career in journalism at Expressen, Svenska Dagbladet and VeckansAffärer, and served as managing editor and later managing director of Gotlands Allehanda.