Investment AB Kinnevik (KINVB: SS) by Joshua Soong, CFA

Long: Investment AB Kinnevik (KINVB: SS) by Joshua Soong, CFA

About our firm Deerwood Capital, LLC is a California-based registered investment adviser with a fundamental value- oriented approach to investing in publicly traded securities. Deerwood selectively invests in undervalued companies across a broad spectrum of industries and market capitalizations. We were founded in 2009 to provide a concentrated, non-leveraged, low-turnover alternative to the typical alternative investment.

Our investment philosophy is based on buying securities at discounts to their intrinsic value and treating share ownership as equivalent to owning the entire business. We invest in businesses with sustainable competitive advantages, purchased at prices yielding significant appreciation potential, and run by skilled management aligned with shareholders.

About the author Before starting Deerwood in April 2009, Mr. Soong was an Equity Analyst at Picoco, LLC, a family office in Newport Beach, where from 2006-2009 he was responsible for investments in the retail and transportation sectors. From 2004-2005, he was a Trader at Citadel, where he managed a portfolio of electricity and natural gas swaps, forwards and options. Mr. Soong graduated with dual B.S. degrees from MIT in EECS and Economics, and earned the CFA designation in 2009. Special acknowledgement goes to Deerwood Analyst Connor Ni for his valuable contributions to this report.

______Disclaimer: This report has been distributed for information purposes only. Neither the information nor any opinions expressed constitute a recommendation to buy or sell the assets or securities mentioned, or to invest in any investment strategy or product related to such assets or securities. It is not intended to provide personal investment advice, and it does not take into account the financial situation, specific investment objectives, or particular needs of any person or entity that may receive this report. Persons reading this report should seek professional financial advice regarding the appropriateness of investing in any assets or securities discussed in this report. As of the publication date of this report, Deerwood Capital, LLC (“Deerwood”), has long positions in and may own option interests on the stock of the Company covered herein (Investment AB Kinnevik), and stand to realize gains in the event that the price of the stock increases. Following publication, Deerwood may transact in the securities of the Company. Deerwood has obtained all information herein from sources believed to be reliable and accurate. However, such information is presented “as is”, without warranty of any kind – whether express or implied – and without any representation as to the results obtained from its use. All expressions of opinion are subject to change without notice, and Deerwood does not undertake to update this report or any information contained herein. Past performance is not necessarily indicative of future results. This report is not a recommendation to buy or sell any securities or assets of companies covered herein. Past performance is not necessarily indicative of future results. Please read our full legal disclaimer at the end of this report.

Investment AB Kinnevik (KINVB: SS)

Executive Summary: Co-invest with Swedish value-oriented owner-operators with a 30-year track record of 16% annual returns while acquiring a unique portfolio of emerging market online, e- commerce, and telecom businesses at a discount to net asset value. Key Figures (as of February 27, 2015) Share Price: SEK 281/share Market Cap: SEK 77.9 billion (USD $9.3 billion) Annual dividend: SEK 7.25 per share (2.58% yield) ADV: 700,000 shares per day 2017 target price: SEK 446/share Estimated 3-year total return: 67% cumulative, or +18.5% annualized

We believe an investment in Kinnevik will produce mid-teens annual returns over a long time horizon for three reasons:

1) The third generation of Kinnevik management, led by Cristina Stenbeck since 2007, has successfully pivoted their capital allocation focus to actively backing online and e-commerce ventures in developing countries. Over the past eight years, the online investment portfolio has generated an average annual growth rate of 34%. Through its network of relationships with world-class institutional investors, Kinnevik has evolved into a leading partner for entrepreneurs building the next generation of internet franchises. 2) Kinnevik’s portfolio will benefit tremendously from rapidly growing demand for internet and e- commerce services in the core markets outside the US and China. The three megatrends behind this tailwind are growth in smartphone and internet penetration, shift in consumer spending from offline to online, and the export of proven business models to new, untapped markets. We believe multiple portfolio companies are well-positioned to become the emerging market equivalents of Amazon, Alibaba, Craigslist, and Zalando. 3) We estimate Kinnevik’s 2017 sum-of-the-parts net asset value of SEK 446 per share, which is an +18.5% annualized total return (including dividends) from the current price of SEK 281 per share. Catalysts for closing the discount between market price and NAV are potential IPOs of Avito and Global Fashion Group, strategic consolidation of telecom and media stakes, and continued development and disclosure of the rapidly growing unlisted online ventures.

Kinnevik at a Glance Investment AB Kinnevik is a publicly traded investment company domiciled and located in Sweden. It has been owner-operated by the original three founding families since 1936, who control the company using super-voting shares. Over the past 30 years the annual total return of Kinnevik Class B shares has been 16%, compared to the S&P 500 annual total return of 11.4%.

Kinnevik invests globally in the telecom, media, and online sectors. At the end of 2014, its portfolio of public and private companies was valued at a total net asset value of USD $10.2 billion. Of the total net asset value, 82% is attributed to publicly traded investments and 18% is attributed to private unlisted investments. Many of the private holdings are only accessible to the public via Kinnevik, such as interests in Quikr, Saltside, Bayport, and Bima.

Millicom and Tele2

3% 3% 5% Zalando 6% Rocket Internet

7% 41% Global Fashion Group

Other e-commerce & 13% marketplaces Entertainment

Financial Services & Other

23% Avito

Source: Kinnevik 2014 4Q Report

As a family-controlled company with permanent capital, Kinnevik has the flexibility to invest across companies in various stages of growth and over multi-decade time horizons. Post-investment, Kinnevik creates additional value as an active owner-partner by seeking to “stimulate operational improvements, provide strategic leadership and bring capital discipline across the portfolio”, as stated in the 2013 Annual Report.

After current management assumed control in 2007 with the appointment of Cristina Stenbeck as Chairman, the total annual return to shareholders from 2007-2014 has been 12.1%, compared to the S&P 500 total annual return of 7.0%. Management’s long-term goal is to increase the share price and NAV at 15% per year.

Under Cristina’s leadership, Kinnevik is best known for being the earliest and largest outside investor that funded Rocket Internet (111% IRR) and Zalando (38% IRR) to their eventual multibillion-dollar IPOs.

Why Kinnevik, Why Now? Kinnevik has several differentiating and favorable characteristics compared to other publicly traded investment holding companies in the emerging markets telecom/media/technology space, such as Naspers, Softbank, and Rocket Internet, which we believe are its closest comparables.

The first difference is that Kinnevik, with a market capitalization of USD $9.3 billion is much smaller than Naspers ($58 billion market cap), and Softbank ($74 billion market cap), and thus has higher return potential. Kinnevik has not (yet) scored a home-run investment that accounts for the majority of its value, as in the cases of Naspers/Tencent and Softbank/Alibaba. Generally, higher returns come from buying before the home-run investment becomes obvious, not after.

“I skate to where the puck is going to be, not to where it has been” -Wayne Gretzky

The second difference is that Kinnevik trades at an 8% discount to its net asset value, with no value ascribed to management or its investing platform. In contrast, Rocket Internet ($9.7 billion market cap), is priced at a 43% premium to its net asset value, implying a "platform value" ascribed to Rocket's management of $2.9 billion. It is ironic that Kinnevik, which is directly co-invested with the majority of Rocket’s portfolio, is priced at a multi-billion dollar discount, despite an excellent track record independently backing Avito, Bayport, Quikr, Saltside, and Konga. As Cristina and her team continue to prove themselves as an effective venture capital platform, the NAV discount could turn into a NAV premium.

"Kinnevik has a very clear vision: to be a best in class, value added investor focused on creating shareholder returns by driving industry consolidation in mature businesses and by supporting new, consumer-focused digital growth companies." -Cristina Stenbeck, 2013 Letter to Shareholders

The third difference is that Kinnevik has no debt at the holding company level and does not own highly leveraged operating businesses. Management has indicated that all capital allocation decisions will be made within the requirements of holding a net cash position. As investors focused on avoiding downside as much as capturing upside, we believe this is the correct and prudent way to own a portfolio of growth equity assets, which require the flexibility and long-term horizon of a non-leveraged investor.

"I've seen more people fail because of liquor and leverage - leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing." -Warren Buffett

Finally, we believe that the market is mispricing Kinnevik shares because the traditional investor base remains skeptical of the unprofitable yet rapidly growing online companies, as seen by the shares' 25-40% discount to NAV during 2009-2013. After Zalando and Rocket Internet were listed publicly, the discount narrowed to 0-15% during 2014. As the smaller unlisted companies grow their NAV contribution and eventually IPO, further shareholder value will be unlocked via higher NAV and a narrower discount.

NAV Growth Forecast, 2015-2017 Based on an individual analysis of each company in Kinnevik’s portfolio, we estimate that Kinnevik’s NAV per share will increase 47% to SEK 446 from 2015-2017. Of the total cumulative growth in NAV, 53% is attributed to unlisted private investments and 47% is attributed to publicly traded investments.

Kinnevik NAV Growth Forecast, 2015-2017 475

450

425

400

375

Private unlisted investments 350 (53% of total gain)

325

300 Publicly listed investments (47% of total gain) 275

250 Qliro Avito Tele2 Quikr Metro Saltside Zalando Millicom commerce - RocketInternet Home and Living 2014NAV ending 2017NAV ending Financial Services Othermarketplaces Generale Modern Times Group Global FashionGlobal Group Source: Deerwood estimates

As most of the unlisted holdings are in the Online portfolio, 70% of the cumulative gain is attributed to Online, 26% to Telecom, and 4% to Financial Services and Entertainment.

The valuation estimates for each individual company are summarized in our NAV model below, and our methodology and rationale are described in the “2017 NAV Valuation Model and Methodology” section on page 23. Our individual company analyses begin on page 26.

Kinnevik Estimated Net Asset Value, 2017 2014 4Q Valuation 2017 Projected Valuation 2015-2017 Change 100% KINV NAV 100% KINV NAV Valuation Change in NAV Valuation Ownership Contribution Valuation Ownership Contribution Growth per share ($ mm, SEK mm) (USD) (SEK) (USD) (SEK) Online Rocket Internet $9,735 14% 10,620 $11,986 13% 12,988 23% 9 Zalando $6,572 32% 19,030 $9,089 32% 23,996 38% 18 Global Fashion Group $2,892 26% 6,092 $6,176 24% 12,249 114% 22 Lamoda $828 26% inc. GFG $1,306 24% inc. GFG 58% inc. GFG Dafiti $895 26% inc. GFG $1,247 23% inc. GFG 39% inc. GFG Namshi $121 26% inc. GFG $565 26% inc. GFG 368% inc. GFG Jabong $446 26% inc. GFG $2,217 25% inc. GFG 397% inc. GFG Zalora $603 26% inc. GFG $842 22% inc. GFG 40% inc. GFG Home and Living Home24 $937 20% 833 $1,086 20% 1,789 16% 3 Westwing $516 13% 379 $923 13% 989 79% 2 Other $107 Mixed 93 $11 Mixed 93 0 Qliro $295 29% 737 $428 29% 1,005 45% 1 Other E-commerce Lazada $1,220 10% 739 $2,829 10% 2,331 132% 7 Linio $326 9% inc. Lazada $809 7% 449 148% inc. Lazada Jumia $543 10% 409 $776 8% 543 43% 0 Konga $92 41% 292 $349 30% 849 280% 2 Other $31 Mixed 257 $31 Mixed 257 0 Marketplaces Avito $957 31% 2,298 $3,290 31% 8,514 244% 22 Quikr $343 16% 425 $1,461 16% 1,926 326% 5 Saltside $23 88% 154 $307 61% 1,543 1260% 5 Wimdu $170 29% 381 $312 29% 745 84% 1 Other $14 Mixed 115 $14 Mixed 115 0% 0 Telecom Millicom $6,916 38% 22,039 $11,236 38% 35,047 62% 47 Tele2 $5,320 30% 12,865 $3,954 30% 9,839 -26% -11 Entertainment Modern Times Group $2,135 20% 3,358 $2,645 20% 4,359 24% 4 Metro $39 100% 321 $0 100% 0 -100% -1 Net cash, Metro $17 100% 140 $17 100% 140 0% 0 Other $13 100% 106 $13 100% 106 0% 0 Financial Services & Other Bayport $430 31% 1,032 $725 31% 1,852 69% 3 Transcom $224 33% 494 $224 33% 609 0% 0 Black Earth Farming $76 25% 151 $76 25% 155 0% 0 Bima $64 39% 206 $140 39% 450 118% 1 Rolnyvik $30 100% 250 $30 100% 250 0% 0 Other $51 100% 424 $51 100% 424 0% 0

Net Cash $16 100% 130 $16 100% 130 0% 0 Debt $0 100% 0 $0 100% 0 0% 0 Total $15,330 84,370 $19,127 123,742 Shares outstanding 277 277 NAV per share 304 446 142 Source: Kinnevik, company data, Deerwood estimates

Risks Disconnect between share price and net asset value Historically, Kinnevik’s shares have traded at an average discount to NAV of 22% from 2005-2014, and the discount has been as wide as 45% in 2008. Although the discount has narrowed considerably in the last year due to the listing of Zalando and Rocket Internet, there is no guarantee that shares will trade at 100% of NAV in 2017. However, based on management’s recent comments in 2014 4Q, if shares traded significantly below internal estimates of intrinsic value Kinnevik would repurchase shares in the open market.

Currency risks Kinnevik’s shares are denominated in Swedish Krona (SEK), and its portfolio companies' revenues and assets are denominated in a variety of global currencies, including the Russian Ruble (RUB). As a result, investors owning Kinnevik will be exposed to currency fluctuations.

Financing and operational risks Many companies in the online portfolio require significant amounts of financing before reaching profitability. By our estimates, in 2014 the unprofitable companies had aggregate EBITDA losses of EUR - 867 million, and over the next three years will require total financing of EUR 1.1 billion. If new financing cannot be raised due to deterioration in fundamental and competitive performance, or a poor capital market environment, Kinnevik will incur losses. Mitigating the financing risk is Rocket’s successful track record of raising capital from private and public sources.

Political and expropriation risks A number of Kinnevik’s companies operate in countries with unfavorable political and economic regimes, such as Avito, Lamoda, and MTG in Russia, and Konga and Jumia in Nigeria. If government authorities in those regions take actions adverse to the interests of private shareholders, then Kinnevik will incur losses.

Valuation risks Valuation of securities is challenging and subject to uncertainty, particularly when valuing younger, rapidly growing ventures such as those owned by Kinnevik. Our NAV estimate in 2017 is our best attempt at predicting future values based on current available information. If the underlying portfolio company fundamentals do not develop as we have forecast, then our NAV estimate will be different than future realized NAV.

Corporate governance risks Kinnevik has a dual-class share structure that gives the founding families and executives the majority of voting power with a relatively small amount of equity. Families and senior managers could take actions adverse to shareholder interests, with no recourse available to non-controlling shareholders.

Table of Contents Executive Summary ...... 1 Kinnevik at a Glance ...... 2 Why Kinnevik, Why Now? ...... 3 NAV Growth Forecast, 2015-2017 ...... 4 Risks ...... 6 Management and Share Ownership...... 8 Kinnevik’s Investing Track Record ...... 10 Three Megatrends Driving E-commerce Growth in Emerging Markets ...... 15 2017 NAV Valuation Model and Methodology ...... 23 Rocket Internet ...... 26 Zalando ...... 32 Global Fashion Group ...... 37 Home24 ...... 45 Westwing ...... 49 Qliro ...... 53 Lazada ...... 57 Linio ...... 61 Jumia and Konga ...... 66 Avito ...... 73 Quikr ...... 79 Saltside ...... 82 Wimdu ...... 85 Millicom ...... 88 Tele2 ...... 94 Modern Times Group ...... 97 Bayport ...... 102 Bima ...... 106 Miscellaneous company analyses ...... 110 Full Legal Disclaimer ...... 113

Management and Share Ownership We believe the primary decision makers for Kinnevik are Cristina Stenbeck, Executive Chairman, and Lorenzo Grabau, CEO, who work in close conjunction with the Board of Directors and the Investment Committee on all aspects of running the company.

Cristina Stenbeck, Executive Chairman Cristina’s first role within the Kinnevik group was joining the board of Invik & Co., a financial services spin-off, in 1997 at the age of 21. She was appointed Vice Chairman of Kinnevik in 2003, and Chairman in 2007. She serves on the boards of Qliro, Millicom, Modern Times Group, Tele2, and Zalando. Ms. Stenbeck, through her 50% stake in holding company Verdere, Sarl, owns 14.8 million KINV Class A shares worth USD $502 million, representing 5.3% of capital and 22.4% of total voting power.

Lorenzo Grabau, Chief Executive Officer Lorenzo was appointed CEO in 2014, replacing former CEO Mia Brunell Livfors. Before being appointed CEO, he served on the Board of Kinnevik from 2013-2014. Previously, he worked in investment banking at Goldman Sachs from 1994-2011. He serves on the boards of Modern Times Group, Millicom, Zalando, Avito, Qliro, and Tele2. Mr. Grabau owns 955,000 Class B shares, worth USD $33 million, the majority of which were purchased with his personal funds in May 2013 when he joined Kinnevik’s Board of Directors.

Joakim Andersson, Chief Financial Officer of Kinnevik Joakim has been with Kinnevik since 2007, and was formerly the Treasurer of Kinnevik until February 2015, when he replaced former CFO Mikael Larsson. He owns 10,333 Class B shares.

Other executives of note are Investment Directors Anders Kronborg, Stina Andersson, Christoph Barchewitz and Chris Bischoff, who were mostly hired during 2012-2013. Their role is to source new investments and help manage the existing portfolio of listed and unlisted companies.

Management and Insiders Ownership The Stenbeck, Klingspor, and von Horn founding families control the company with an aggregate 58% of voting power and 14.6% of capital worth USD $1.4 billion. Class A shares have 10 votes per share and Class B shares have 1 vote per share. We believe management’s significant ownership aligns their interests with the rest of the shareholder base.

Kinnevik Beneficial Owners A Shares B Shares Capital Votes Value ($ mm) Cristina Stenbeck 14.8 0.0 5.3% 22.4% $502 Max Stenbeck 14.8 0.0 5.3% 22.4% $502 Klingspor Family 6.5 2.2 3.1% 10.2% $295 von Horn Family 2.0 0.4 0.9% 3.1% $82 JPM Chase 0.0 32.6 11.7% 5.0% $1,111 Other shareholders 4.4 200.2 73.7% 37.0% $6,970 Total 42.4 235.4 100% 100% $9,462 Source: Kinnevik 2013 Annual Report

Management Compensation Executive compensation at Kinnevik is reasonable and modest, especially compared to US companies of comparable size. In 2013 the CEO received total remuneration of SEK 15 million (USD $2 million), and 7 other Senior Executives received total remuneration of SEK 37 million ($700,000 each).

The long-term incentive plan awarding KINV shares to management is derived from a formula based on the total return to Class B shares, growth in net asset value, and average return of portfolio company groups, over a rolling three-year period. There is a maximum number of incentive shares awarded with caps on dilution and profit per share, and is approved by a 90% vote of the Board of Directors.

In 2013, the total cost of running Kinnevik’s holding company investment operation, which includes compensation for 30 employees, was SEK 218 million ($31 million), or 0.30% of net asset value, a good value for shareholders when compared to a venture capital fund’s fees of "2 and 20", or active asset managers' fees of 1.0-2.0%.

Key Events in Kinnevik History, 1936-2014 Kinnevik’s history can be divided into three periods, corresponding to the three generations of Stenbecks that have guided the company through three investment paradigms. From 1936-1976, Hugo Stenbeck invested primarily in industrials in the Scandinavian region. From 1976-2006, Jan Stenbeck, son of Hugo Stenbeck, invested primarily in European and emerging markets telecom and media sectors. From 2006 and onwards, Cristina Stenbeck, daughter of Jan Stenbeck, shifted focus to the internet, online, and e-commerce sectors.

Below is a timeline of key events in Kinnevik’s history from inception to today:

1936 – Kinnevik is founded by 3 friends, Robert von Horn, Wilhelm Klingspor, and Hugo Stenbeck (their attorney), after selling their sugar company and were left with a farming company and cash. The first investment was buying shares of Korsnas, a Swedish forestry and sawmill group. 1954 – Kinnevik listed publicly. 1971 – Jan Stenbeck, son of Hugo Stenbeck, joins the Kinnevik Board at the age of 30. 1976 – Jan Stenbeck assumes management of the company after the passing of Hugo Stenbeck, and is appointed Chairman 17 years later in 1993. 1979 - Kinnevik begins investing in mobile telecom and media businesses, which eventually become Millicom, Tele2, and Modern Times Group. 1985 – Invik & Co., the finance and asset management segment, is spun-out and listed publicly. 1997 – Cristina Stenbeck, daughter of Jan Stenbeck, joins the board of Invik & Co. at age 21. 2002 – Jan Stenbeck passes away. 2003 - Cristina Stenbeck is appointed Vice Chairman of Kinnevik. 2004 – Invik & Co. is merged into Kinnevik. 1 year later, Invik & Co. is spun-off, listed publicly, and acquired by a third party in 2007. 2006 – Mia Brunell Livfors is appointed CEO, replacing Vigo Carlund. Kinnevik begins investing in online ventures, starting with Kontakt East, the predecessor of Avito. 2007 – Cristina Stenbeck appointed Chairman of Kinnevik. 2009 – Kinnevik acquires Emesco AB, eliminating a cross-shareholding corporate structure. Begins partnership with Rocket Internet and ramping up investments in internet and e-commerce. 2013 – Divested remaining interests in Korsnas. Net cash position achieved at the Kinnevik holding company level. 2014 – Lorenzo Grabau is appointed CEO. Zalando and Rocket Internet listed publicly. Source: Kinnevik website, filings, data

Kinnevik’s Investing Track Record In the tables below, we present the results of our independent analysis of Kinnevik’s investment performance during 2007-2014, split between Online and Non-Online portfolios. We chose the period starting in 2007 because that was the year current management assumed full control.

Since our calculations are derived from publicly available information, our calculated IRRs are mostly lower compared to management’s IRR numbers in the 2014 4Q Presentation, due to undisclosed timing of specific company financing rounds within a calendar year and treatment of dividends from Rocket Internet. However we are confident that our results are very close to actual economic performance, because our multiple-on-invested capital (MOIC) numbers are almost identical to management’s MOIC numbers, with the only differences coming from our inclusion of the Kontakt East investments from 2006-2008 in Avito’s accumulated investment, and our assumption of an initial investment of SEK 747 million in Rocket Internet, compared to Kinnevik’s estimated assumption of SEK 974 million. Online investments track record, 2007-2014 Accumulated Accumulated Investment Date of initial Date of IRR MOIC (SEK mm) return investment period (yrs) investment valuation Rocket Internet 10,620 (3,077) 4 2010 2014/12 111% 14.2x Saltside 563 195 2 2013 2015/1 51% 2.9x Zalando 19,030 7,916 4 2010 2014/12 38% 2.4x Avito 2,298 617 8 2006 2014/12 26% 3.7x Konga 292 209 1 2013 2014/12 24% 1.4x Westwing 379 175 3 2011 2014/12 21% 2.2x GFG 6,092 3,620 3 2011 2014/12 19% 1.7x BigCommerce + Lazada 739 680 2 2012 2014/12 4% 1.1x Home24 833 794 3 2011 2014/12 1% 1.0x Wimdu/Airizu 381 429 3 2012 2014/12 -3% 0.9x Other E-commerce 666 807 8 2006 2014/12 -5% 0.8x CDON 737 887 4 2010 2014/12 -6% 0.8x Quikr 425 362 0.75 2014 2014/12 n/m n/m Non-online investments track record, 2007-2014 Accumulated Accumulated Investment Date of initial Date of IRR MOIC (SEK mm) return investment period (yrs) Investment valuation Milvik/Bima 206 84 1 2013 2014/12 99% 2.5x Bayport 1,032 573 7 2007 2014/12 12% 1.8x Tele2 24,819 12,548 8 2006 2014/12 11% 2.0x Millicom 27,997 16,326 8 2006 2014/12 8% 1.7x Korsnas 13,635 11,559 7 2006 2013/12 3% 1.2x MTG 3,936 4,471 8 2006 2014/12 -2% 0.9x Transcom 494 1,148 8 2006 2014/12 -11% 0.4x Metro 461 2,661 8 2006 2014/12 -21% 0.2x Black Earth Farming 151 791 8 2006 2014/12 -23% 0.2x Source: Kinnevik reports, company data, Deerwood estimates *IRRs differ from management’s IRR data in 2014 4Q, due to undisclosed timing of specific financing rounds. *Avito accumulated investment includes 2006-2008 Kontakt East investment totaling SEK 222 million. *Saltside accumulated return based on 1/2015 financing round at estimated USD $112 million valuation. *Non-Online IRRs assumes initial investment at Kinnevik's fair value mark at 12/31/06, includes dividends received, and adjusted for 2009 Emesco acquisitions.

83% of the total accumulated return in the online portfolio comes from just 3 investments - Rocket Internet, Zalando, and Global Fashion Group (GFG). The smaller, non-Rocket investments have high IRRs

but lower dollar gains – Saltside Technologies generated a 51% IRR, Avito 26%, and Konga 24%. Low performers are the Airbnb clone Wimdu/Airizu, Qliro, and other undisclosed e-commerce and marketplace investments (we believe this consist of stakes in IROKOtv, Fab Furnish, Yell.ru, Dealdey, Foodpanda, and other undisclosed investments).

The non-online investment track record is mixed, with solid results from the newer financial ventures in Milvik/Bima and Bayport, average returns from Tele2, Millicom, and MTG, and poor results from Transcom, Metro, and Black Earth Farming.

On an aggregate basis, the online portfolio produced a weighted average annual return of 34%, compared to the non-online portfolio weighted average annual return of 5%, for a total blended annual return of 10% from 2007-2014. The remaining 2% per year total return on KINV shares during that period came from dividends and a narrowing of the NAV discount from 30% in 2007 to 8% in 2014.

Aggregate investment performance, 2007-2014 Total investment Total return Weighted MOIC CAGR (SEK mm) (SEK mm) average years Online Portfolio Performance 13,614 43,055 4.0 3.2x 34% Non-online Portfolio Performance 50,161 72,730 7.8 1.4x 5% Total Portfolio Performance 63,775 115,785 6.4 1.8x 10% Source: Kinnevik reports, company data and filings, press releases, Deerwood estimates

Management’s strategy of shifting capital allocation from the non-online “legacy” portfolio to the online portfolio appears correct, assuming that the high returns from online investing continue in the future. The long-term goal of 15% total return to shareholders should consist of 10% returns from the legacy holdings (primarily Millicom and Tele2) combined with 20-30% returns from the e-commerce and marketplace ventures.

Capital Allocation, 2007-2014 For the same period of 2007-2014, we also categorized Kinnevik's cumulative cash flows from operations, investing, and financing to see how management allocated capital. The “cash + financial assets” amounts in 2007 and 2014 are very close proxies to net asset value, so the table below also shows the drivers of net asset value growth over the past 8 years.

Kinnevik cumulative cash flows by category, 2007-2014 Cash Flow % of Total % of Total NAV (SEK mm) Inflows Gain 2007 starting cash + financial assets 37,624 39,168 Dividend and interest income 22,465 48% Cash flows from operations 4,582 10% Sale of financial assets 5,734 12% Sale of subsidiaries 322 1% Investment in financial assets (16,464) 50% -35% Dividends paid (8,879) 27% -19% Net debt reduction (3,893) 12% -8% CAPEX (2,905) 9% -6% Interest (2,068) 6% -4% Acquisitions (1,170) 4% -2% Share repurchase (279) 1% -1% Unrealized gains on financial assets 49,784 n/m 105% 2014 ending cash + financial assets 84,853 84,370

Total cash inflows 33,103 Total cash outflows (35,658) Unrealized gains on financial assets 49,784 Total gain, 2007-2014 47,229 45,202 Source: Kinnevik annual reports

From 2007-2014, total cash inflow from dividends, cash flows from operations (primarily Korsnas), and sales of existing financial assets was SEK 33.1 billion. Of this total cash inflow, 50% was invested in financial assets, 27% was paid out as dividends, 12% was used to pay down debt, and the remaining 19% was used for CAPEX, interest expense, acquisitions of subsidiaries and a small amount of share repurchase in 2008.

During the 8 year period, the total gain in cash + financial assets was SEK 47.2 billion, closely matching the gain in NAV of SEK 45.2 billion. During that time, a total of SEK 16.5 billion was invested into financial assets, producing unrealized gains on financial assets of SEK 49.8 billion, which was the primary driver of the increase in NAV during the time period.

Historical Discount to NAV Similar to other investment holding companies, Kinnevik shares have historically traded at an average ratio of market price to net asset value of 78% (discount of 22%), from 2005-2014.

KINVB price to NAV ratio, 2005-2014 120%

100%

80%

60%

40%

20%

0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Kinnevik annual reports, Nasdaq OMX Stockholm

The NAV discount was widest during 2008-2013, when the rapidly growing fair value marks of the online portfolio were not given full credit by the market until 2014, when shares traded near or even above 100% of NAV.

We think the question of what the “correct” discount to NAV, whether it is 20% or 0%, is less important than determining how much NAV will grow in the future. It would be a mistake for an investor to lose out on even a single year of 15% NAV growth, much less multiple years of compounding at 15%, just to wait for a one-time 10% discount on the entry price. Furthermore, management indicated in the most recent 2014 4Q earnings conference call that the company would repurchase shares in the future if the discount was sufficiently large, signaling to the market that the company would take action to drive its shares closer to intrinsic value, which was hinted to be at least 100% of NAV.

Growing the Co-investors Network, 2006-2014 Due to the expansion into new regions and sectors after 2006, Kinnevik's investment opportunity set has never been as favorable and large as it is today, which bodes well for future value-creating partnerships and co-investments with a wide swath of world-class investors.

In 2006, excluding Millicom, less than 1% of the portfolio was invested outside Europe, consisting of a small stake in Kontakt East with a handful of private company co-investors. In 2014, 28% of the portfolio is now invested outside Europe, and Kinnevik has co-invested with over 53 world-class institutions in at least 1 deal.

Kinnevik co-investors, 2006-2014 Co-Investor Investments Co-Investor Investments Co-Investor Investments Rocket/Global Founders 15 DST 1 Norwest Venture 1 Access Industries 11 eBay 1 Odey 1 Holtzbrinck Ventures 7 Falcon Edge Captal 1 Omidyar Network 1 Summit Partners 7 Fidelity Investments 1 Ontario Teachers’ Pension Plan 1 Tengelmann 6 Helios 1 Pelham Associates 1 JPMorgan 5 Hillhouse Capital 1 Phenomen Ventures 1 Blakeney Management 2 iMENA Group 1 Philippine Long Distance 1 Naspers 2 International Finance 1 Quadrant Capital Advisors 1 Tiger Global 2 Latin Idea 1 REWE Group 1 Verlinvest 2 Leapfrog Investments 1 Rise Capital 1 Vostok Nafta 2 Leon Group 1 Scopia Capital Management 1 Accel Partners 1 Matrix Partners 1 Temasek 1 Anders Holch Povlsen 1 Millicom 1 Tesco Overseas 1 Baring Vostok 1 MTN Group 1 United Internet Ventures AG 1 Brummer & Partners 1 New Enterprise Assoc. 1 Valorem 1 CDC Group 1 Nokia Growth Partners 1 Warburg Pincus 1 Cohen Capital Advisors 1 Northgate 1 Zimmermann Investment 1 Digicel 1 Northzone Ventures 1 Source: Kinnevik, Rocket Internet data, Crunchbase, news articles, company press releases

Because Kinnevik is not just a passive financial investor, but an active and strategic manager, it is able to create additional value by bringing in new partners and driving strategic mergers for their companies.

For example, Kinnevik's evolving relationship with Naspers illustrates the potential synergies and network effects within the portfolio. In March 2013, Avito was merged with Naspers-owned Slando/OLX in Russia to create the dominant online classifieds site. At the same time, Naspers participated in an equity raise for Konga in Nigeria. We see other potential benefits for consolidation between Kinnevik and Naspers - Quikr and OLX could merge in India, and Saltside and OLX could merge in Bangladesh and Ghana.

Further expansion of Kinnevik’s sphere of co-investors may also lead to investments in new regions such as China. The most recent financing round for Saltside was led by Kinnevik as the majority shareholder, when they brought in partners Hillhouse Capital and Brummer & Partners, which previously had no formal relationship with Kinnevik. Hillhouse has successfully invested in many Chinese ventures (Tencent, JD.com), and future investments in China may be possible via the Saltside relationship.

A Long Runway for Growth Kinnevik has done well investing in the online sector – from 2007-2014 it achieved an average annual return of 34% per year. We believe the primary architect of the shift into the online space was Cristina Stenbeck, which is very positive for long-term Kinnevik shareholders, as she is just shy of forty years old and has multiple decades ahead of her to create value.

Likewise, the internet ecosystems of developing countries also have many decades of growth ahead of them, as they benefit from increasing mobile, smartphone, and internet penetration, a shift to e- commerce, and the proliferation of proven online business models to new markets. In the following section, we present the argument for why these three megatrends will be beneficial for Kinnevik's portfolio companies in the coming years.

Three Megatrends Driving E-commerce Growth in Emerging Markets The 2006 paradigm shift in Kinnevik’s investment focus to the online/e-commerce sector was not by accident, but a deliberate, calculated strategy to benefit from three megatrends that are profoundly changing how emerging market consumers buy, sell, and trade goods and services online:

1. Developing countries’ mobile penetration rates are approaching 100%, which leads to smartphone penetration of 100% and internet penetration of 100%. 2. Higher internet penetration enables consumers to shift spending from offline to online. E- commerce (both B2C and C2C) will grow much faster than offline retail, particularly in emerging markets that lack the infrastructure necessary for a brick-and-mortar store network. 3. The proliferation and export of proven business models enables investors (like Kinnevik and Rocket Internet) to build multi-billion-dollar companies without technological, product, or market risk (only competition risk remains). “What works in the West works in the East”.

Over the next 10 years, we believe Kinnevik’s portfolio of companies are well-positioned to become the regional equivalents of Amazon, Alibaba, Craigslist, and Zalando, and are confident in our forecasts of high double digit revenue growth for these companies because of the tailwinds from these trends.

Megatrend #1 – Mobile, smartphone, and internet penetration will rise to 100% everywhere It is a given that that the internet is universally useful, its utility increases as more people use it, and all people want access to the internet. In developing countries without adequate fixed broadband infrastructure, mobile phones are the primary way to get online. The good news is that mobile phone penetration in all regions is forecast to reach 100% by 2017, and is already over 100% in CIS, Latin America, and the Middle East.

Source: A.T. Kearny, The Mobile Economy 2013 Presentation

After people get basic access to the internet using a feature phone, they then use apps and rich media, which require a smartphone. Global smartphone penetration has increased from 10% in 2010 to over 30% in 2014, and will continue to rise in the coming years.

Source: KPCB, Mary Meeker Internet Trends 2014 Presentation

In contrast with the US and Western Europe, the top 15 developing countries’ smartphone penetration at 23% is significantly lower than the global average, with smartphone subscribers forecast to grow 28% in 2014.

Source: KPCB Mary Meeker Internet Trends 2014 Presentation

There is strong, material upside for growth in smartphone adoption, which implies high upside in internet usage and penetration.

Source: KPCB Mary Meeker Internet Trends 2014 Presentation

The top 15 developing markets with large potential internet populations have an average internet penetration of 22%, with a total population of 2.5 billion, in contrast to the global average of 37% internet penetration.

Because of the smaller base, the percentage growth of internet users in non-US, non-European countries is an order of magnitude higher compared to Western countries, with 33% to 205% growth in number of internet users from 2009-2013 in the “BRIICS” countries.

Source: Naspers, 2014 1Q Earnings Presentation

If internet penetration will eventually reach 100% everywhere, and currently the average developing country’s internet penetration is under 22%, the implication for investors and entrepreneurs is that it is

better to start a business in an untapped market with low competition. Additionally, the business will benefit from the dual rising tides of internet user growth and economic growth.

When people get on the internet, they first thing they do is access new information (Google) and communicate (Facebook). The second thing they do is buy and trade goods and services online. Since Google and Facebook are already available in emerging markets, but Amazon and Craigslist are not, there is a tremendous opportunity to capture the unmet, growing demand for e-commerce.

Megatrend #2 – The oncoming tsunami of e-commerce The internet allows people to discover, access, and obtain new products they were not able to get access to previously, by purchasing a new or used item from an online retailer or online classifieds site. The growth in e-commerce is a global phenomenon, and total B2C e-commerce spending is increasing at 15% per year from a level of $1.5 trillion, handily outpacing GDP growth.

Source: OEX Divante Presentation

Not all countries are growing at the global average, however. Because of the smaller base of people buying goods online, e-commerce growth in developing markets is much higher with CAGRs of 22-77% from 2009-2013 (vs. 3-10% for Japan, Western Europe, and US).

Source: Naspers 2014 1Q Earnings Presentation

In Rocket Internet and Kinnevik’s target markets, e-commerce penetration is currently averaging 2.1%, compared to China at 5.6% and the US at 7.4%, so there is material upside to capturing a growing proportion of online spend from a potential population of 5.4 billion people representing $57 trillion in GDP.

Source: Rocket Internet 2014 1H Results Presentation

We believe the potential for e-commerce share of total commerce in developing countries is actually much higher than in developed countries, because of significantly lower brick-and-mortar retail space per capita. In the US there is 46 square feet of retail space per capita, compared to China at 6.4 sqft, India at 2.0 sqft, Russia at 1.0 sqft, and Nigeria at 0.02 sqft.

Retail Space per Capita (sqft) 50 45 40 35 30 25 20 15 10 5 0

Source: Alibaba 2014 IPO Prospectus, globaleconomicanalysis, ventures-africa.com, Cushman & Wakefield

As retail spending per capita grows, the leading online retailers will capture the vast majority of incremental spend in countries lacking a retail store infrastructure, and thus can grow faster than the overall online market. Even Amazon, which competes intensely with brick and mortar stores in developed countries, grew faster than the total e-commerce and retail industry during 2013-2014.

Source: Internetretailer.com

So how does one build the leading e-commerce company in a new, untapped market? Perhaps investors and entrepreneurs can learn a thing or two from studying Amazon, Alibaba, JD and Flipkart…

Megatrend #3 – Export of proven business models to new markets There is tremendous demand for e-commerce in countries where western companies, like Amazon, have not yet entered. Kinnevik and Rocket Internet, despite being wrongly disparaged as a “clone factory”, fill a valuable role in building a country’s nascent online ecosystem. Someone, whether it is Rocket, Amazon, Alibaba, or a venture capital fund, will invest capital wherever it is needed to provide the online services consumers desperately desire.

The entrepreneurial strategy of “creative imitation” of internet businesses is an effective and proven strategy that has a long history of success in many different regions of the world.

Original and imitator company comparison, by region ($ bn) Original (valuation) Imitator (valuation) Russia Yahoo ($41 bn) Mail.ru ($3.6 bn) Facebook ($219 bn) VK (owned by Mail.ru) Amazon ($176 bn) Ozon.ru ($0.7 bn)

China eBay/Amazon ($246 bn) Alibaba ($212 bn) Amazon ($176 bn) JD ($37 bn) ICQ/Facebook/Twitter ($250 bn) Tencent ($163 bn)

Latin America eBay ($70 bn) MercadoLibre ($6 bn) Amazon ($176 bn) B2W Digital ($2 bn)

Europe Zappos ($1 bn) Zalando ($6 bn)

India Amazon ($176 bn) Flipkart ($11 bn) Craigslist ($1 bn) OLX (owned by Naspers) Source: Company data, market data

Investors should seriously consider owning those companies that are implementing this strategy in emerging markets, because they can produce very high returns for long periods of time. If you missed the first internet wave in 1997 by passing on Amazon and eBay (average annual return 30%+ for 17 years) and also missed the second internet wave in 2001 by passing on Softbank/Alibaba, and Naspers/Tencent (average annual return 20%+ for 14 years), it may be a mistake to pass on investing in the third internet wave in 2015 with Kinnevik and Rocket Internet, who are building the next generation of internet franchises all over the world.

Kinnevik’s online portfolio original vs. imitator comparison Kinnevik Imitators Operates in Valuation ($ bn) Resembles Valuation ($ bn) Growth Potential Zalando Europe 6.6 Zappos Acquired by Amazon n/a Linio Latin America 0.3 Amazon 176.5 593x Jumia Africa 0.5 Amazon 176.5 325x Lazada Southeast Asia 1.2 Amazon 176.5 145x Jabong India 0.4 Zalando 6.6 15x Zalora Southeast Asia 0.6 Zalando 6.6 11x Lamoda Russia & CIS 0.8 Zalando 6.6 8x Dafiti Latin America 0.9 Zalando 6.6 7x Quikr India 0.3 Schibsted 4.8 14x Avito Russia & CIS 1.0 Schibsted 4.8 5x Westwing Europe 0.5 Wayfair 1.9 4x Home24 Europe 0.9 Wayfair 1.9 2x Source: Company data, Deerwood estimates

The success of the Kinnevik sphere of companies is far from guaranteed, however, with many years of intense competition before reaching positive cash flow – if the companies fall short, shareholders will suffer. The prices paid for the companies in the portfolio, either directly by Kinnevik or indirectly by shareholders, will also be a large driver of future returns going forward – if the valuations as implied by the reported net asset value are too optimistic compared to future revenues and cash flows, shareholders will suffer. Thus, any forecast of KINV’s share price must incorporate an analysis and valuation estimate of the companies comprising the NAV.

In the next section, we present the methodology and rationale behind our 2017 NAV estimate of 446/share, as well as individual analyses of each of the core companies in Kinnevik’s portfolio.

2017 NAV Valuation Model and Methodology The forecast for Kinnevik's 2017 NAV of SEK 446 per share is derived from our individual company valuation estimates for each of the companies currently in the portfolio.

Net Cash $16 100% 130 $16 100% 130 0% 0 Debt $0 100% 0 $0 100% 0 0% 0 Total $15,330 84,370 $19,127 123,742 Shares outstanding 277 277 NAV per share 304 446 142 Source: Kinnevik, Rocket Internet, company data, Deerwood estimates

Valuation Methodology Currency translation - Historical and estimated financial information is presented using the same reporting currency as used by each individual company. When comparing companies and calculating each individual company’s contribution to Kinnevik’s NAV, valuations were translated to USD at the appropriate historical exchange rate. For dates in the future, such as our 2017 valuation estimates, we used the exchange rate as of February 2, 2015. For example, Jabong reports revenues and EBITDA in Indian Rupees (INR). Our estimate of Jabong’s 2017 revenue is INR 39.1 billion, which implies a valuation at 3.5x sales multiple of USD $2.2 billion at an exchange rate of 61.75 USD-INR (rate as of February 2, 2015).

For companies with a negative EBITDA estimate in 2017, we chose to value the loss-generating companies using revenue multiples comparable to publicly traded peers and recent financing rounds of unlisted peers. In addition, we assumed that Kinnevik's stake would be diluted by the amount of equity that needs to be raised at the 2017 estimated valuation to offset the cumulative cash deficit incurred by the end of 2017. Because the companies do not generate cash, the enterprise value was not adjusted by positive cash balances for purposes of calculating revenue multiples.

For example, in 2017 we forecast that Linio will generate revenue of EUR 352 million, EBITDA loss of - 106 million, and incur a cumulative cash deficit of -278 million. Using a 2.0x revenue multiple, our 2017 valuation estimate for Linio is EUR 704 million. Our dilution adjustment assumes that Linio raises EUR 278 million in new equity at a 704 million pre-money valuation, which dilutes Kinnevik's original stake of 9.4% down to 6.7%. Thus, Linio’s contribution to Kinnevik's NAV in 2017 is 6.7% of EUR 704 million.

For companies with positive EBITDA forecast in 2017, we chose an EV/EBITDA multiple based on an average of publicly traded peers and EV/EBITDA multiples implied by recent financing rounds of private peers. For these cash generative companies, we also adjusted enterprise value for net debt/cash and non-controlling interests.

Telecoms - We chose to value these companies at an EV/EBITDA multiple of 6.5x, slightly higher than publicly traded peer averages, but below typical acquisition multiples for telecoms at 7.0-8.5x.

Rocket Internet - we valued Rocket Internet with a sum-of-the-parts NAV methodology similar for our valuation of Kinnevik, but assumed the current market implied premium to NAV for Rocket’s "platform value" of USD $2.9 billion remained constant from 2014-2017.

Online classifieds - For EV/EBITDA multiple comparisons, we chose multiples based on a blend of the mature Schibsted classifieds segment and the faster-growing publicly traded Chinese classifieds companies.

Online fashion retailers - We determined future EBITDA margin improvement based on Zalando's historical EBITDA margin experience. Our assumption was that these companies would reach -10% EBITDA margin at USD $500 million in revenue, and breakeven EBITDA margin at USD $1 billion in revenue. Certain companies, such as Jabong, were assigned higher revenue multiples than the others to account for faster growth and larger addressable markets.

Online general merchandise retailers - Similar to the online fashion retailers, we assumed the companies would reach -10% EBITDA at $500 million revenue and breakeven EBITDA at $1 billion revenue. We chose a 2.0x revenue multiple based on Amazon and JD.com current multiples.

Online home and living retailers - Compared to fashion and general merchandise, home and living retailers have higher gross margins and higher basket sizes per order, so we assumed these companies would reach -10% EBITDA at $300 million revenue and breakeven at $500 million in revenue. We chose a 1.5x sales multiple based on an average of publicly traded peers.

A Final Caveat on Valuation Valuation is more art than science, particularly so when valuing young, rapidly growing, cash flow negative companies in the Kinnevik online portfolio. We intended our forecasts and valuation multiples not to be overly conservative nor overly optimistic, but a best attempt at accurately predicting what will actually happen in the next three years.

Some (hopefully very few) of Kinnevik's investments will do worse than forecast, and some will do better than forecast. Even a start-up currently too small to break out separately may end up accounting for the majority of Kinnevik's NAV. Such is the “power law” in venture capital investing.

Buying Kinnevik is similar to owning a non-leveraged portfolio of potentially very valuable options funded by stable, cash-generative businesses. We believe this situation represents low downside and high upside, and that significant value will be created for shareholders over time.

In the following section, we present our individual company analyses and 2017 valuation estimates to help readers gain a deeper understanding of Kinnevik’s underlying portfolio.

Rocket Internet

Overview Rocket Internet (“Rocket”, or “RKET”) is a German-based internet platform founded in 2007 by the Samwer brothers. The company has incubated and maintained interests in a number of international start-ups (many also owned by Kinnevik) such as HelloFresh, Lazada, Home24 and the Global Fashion Group. Rocket Internet has been listed on the Frankfurt Stock Exchange since its IPO in October 2014.

Source: Kinnevik Capital Markets Day, September 2014

Management and Ownership Structure The Samwer brothers, Oliver, Alexander, and Marc, are successful serial entrepreneurs. They founded a German version of eBay, Alando.de, and sold it to eBay for $43 million in 1999. Then they sold another start-up, Jamba!, to VeriSign for $273 million in 2004. Later the brothers started their own venture capital company, European Founders Fund (predecessor to Global Founders Capital), which seeded Rocket Internet and now owns 38% of shares outstanding.

CEO Oliver Samwer is the architect behind Rocket. In an email he sent out to his global team in 2011, he described himself as “the most aggressive guy on internet on the planet” and that he will “die to win”. While some might consider Mr. Samwer a controversial figure, we consider his ambition and commitment favorable to shareholders and a necessity in the fiercely competitive and fast-moving start- up environment.

The following chart demonstrates Rocket’s track record under Oliver's leadership in mass-producing e- commerce start-ups and raising financing. These ventures have generated 22x- 264x money-on-money multiples all within 2-5 years.

Rocket Internet selected money-on-money multiples, 2010-2014 Year Total funding Total funding Stake-weighted Money-on-money Founded by Rocket (€ mm) received (€ mm) valuation (€ mm) multiple Jumia 2012 0.2 62 57 264x Hellofresh 2011 0.5 39 49 71x Linio 2011 1.4 120 91 63x Zalora 2011 2.6 292 131 60x Lazada 2011 2.5 319 135 54x Namshi 2012 0.8 47 36 44x Dafiti 2010 5 218 177 40x Westwing 2011 3.3 155 119 30x Lamoda 2010 6.6 219 169 29x Home24 2009 9.7 205 247 23x Jabong 2010 4.3 189 83 22x Source: Rocket Internet 2014 IPO Prospectus *Money-on-money multiple includes distributions but excludes Holtzbrinck contribution in-kind

We anticipate the Samwer brothers’ passion for winning and intense focus on execution will continue to drive the creation of new successful ventures going forward.

Rocket Internet ownership structure

Source: Rocket Internet data

Kinnevik is the second largest shareholder of Rocket after Global Founders (the Samwers' private investment vehicle). The significant stake and close relationship with Rocket allow Kinnevik access to ventures backed by the Rocket platform and selective participation in deals in which the prospects and valuation makes sense. In addition, Kinnevik contributes expertise in corporate governance, strategy and public company management that we think complements Rocket Internet's core skills. The rest of the shareholder base consists of several other long-term partners Rocket has worked with over the years. Its diverse source of capital provides a solid foundation for Rocket’s expansion to new areas and geographies.

Competitive Position Rocket Internet’s strategy is to export proven business models to new, untapped markets. The vast majority of Rocket’s companies are clones of other successful internet businesses. Linio and Lazada are Amazon clones in Latin America and Southeast Asia, the Global Fashion Group businesses are cloned from Zalando which is cloned from Zappos, Westwing is a One Kings Lane clone, Wimdu is similar to Airbnb, etc. The advantage of this strategy is that Rocket avoids technological risk - it does not have to develop any new technology for its start-ups to succeed. It also eliminates business model risk because the chosen business models have already proven their potential for scalability and profitability in mature markets. Rocket’s superiority in execution is what sets it apart from competitors.

We believe Rocket has developed over the years the following key competitive advantages compared to a typical venture capital fund.

Sufficient capital base Due to its track record, Rocket is able to raise funds from many different world-class investors at premium valuations. In addition to strategic partners such as Kinnevik, Millicom and Access Industries, notable names include J.P. Morgan, Tengelmann, and Summit Partners. Unlike a typical venture capital fund which has mandates on stage and exit timing, Rocket has the flexibility to invest across companies in various stages of growth and over time horizons much longer than 10 years. As a publicly listed company, Rocket has additional access to permanent sources of capital for funding its ventures. Being well-capitalized allows Rocket to spend big marketing dollars and invest in infrastructure quickly in order to gain market share.

Industrialized start-up production process The graphic below outlines the highly structured process Rocket uses to expedite global execution of its many start-ups across the world.

Source: Kinnevik Rocket Capital Markets Day, May 2014

On average, Rocket founds 10 new companies per year. Rocket’s highly data-driven new venture production process enables product development, data analysis, and even marketing to be handled in a centralized location and quickly rolled out to all of the regions. Rocket constantly recruits “founders” from consulting firms, banks and top business schools and sends them to the local country level to build the business, and build it fast. The end result is Rocket can launch a new venture in less than 100 days with full functional support and quickly become the first-mover in any new market it sees fit.

Network and synergies Rocket’s ownership in a global network of businesses gives it a distinct competitive advantage. There are four dimensions for Rocket to leverage synergies: 1. Sourcing. By combining the five regional online fashion retailers into Global Fashion Group, Rocket will benefit from economies of scale in sourcing products from global and private-label brands. The recently restructured Global Online Takeaway Group can attract more restaurant partners for each of its individual group members due to scale. More choices for diners reinforce the network effects which drives more orders from even more customers. 2. Knowledge sharing. Rocket is a self-learning, self-replicating machine that has accumulated invaluable experiences and best practices that are shared among its portfolio companies. For example, Zalando’s success in building fulfillment infrastructure and creating compelling customer experiences can be fully integrated into the Global Fashion Group companies. In furniture and home accessories, Rocket has the capacity to quickly build sisters companies to Home24 and Westwing in other regions by exporting the infrastructure and knowledge already learned. 3. Customer acquisition. Companies across multiple product categories can take advantages of cross-selling and co-marketing opportunities that exist within the network to acquire new customers and higher share of spend. 4. Talent attraction. A large internet platform such as Rocket can more easily attract top talent than smaller standalone start-ups, and shift personnel between regions and companies.

As the number of companies within Rocket's sphere grows each year, we anticipate more opportunities to benefit from such synergies and scale advantages.

Strategic partnerships Rocket has developed strategic partnerships with a number of telecommunications service providers such as Millicom, MTN Group, and Philippine Long Distance Telephone Company. These strategic partners are co-investors in the Regional Internet Groups and add significant value in developing and distributing Rocket’s e-commerce apps and mobile payment services in their respective markets. Retailers Tesco and Rewe Group are co-invested in Rocket’s e-commerce businesses and help broaden Rocket’s merchandise selection and establish its credibility in new markets. By sharing ownership with variety of other strategic partners/institutions, Rocket gains benefits in distribution, marketing, and access to capital for its companies.

Valuation Rocket’s value comes from two sources: the Net Asset Value of its portfolio and its platform/management value. To project Rocket’s future portfolio NAV, we combined all future individual company values and added the net cash position, which was assumed to remain constant from 2014-2017. Most of the “Proven Winners” have co-ownership with Kinnevik; therefore we used our internal 2017 valuation estimates for these investments. For the rest of the venture portfolio without disclosed financials, we assumed a 30% total increase in value over 3 years.

Rocket Internet Estimated Value, 2017 2014 4Q Valuations 2017 Projected Valuations 2015-2017 Comparison 100% Rocket Value 100% Rocket Value Valuation Growth Valuation Ownership Contribution Valuation Ownership Contribution ($ mm) (USD) (USD) (USD) (USD) Proven Winners Global Fashion Group Dafiti $895 23% $203 $1,247 20% $251 39% Lamoda $828 24% $195 $1,306 22% $285 58% Zalora $603 25% $151 $842 21% $174 40% Namshi $121 34% $42 $565 34% $194 368% Jabong $446 21% $95 $2,217 20% $453 397% Home and Living Home24 $937 50% $468 $1,086 50% $542 16% Westwing $516 34% $176 $923 34% $314 79% Other E-commerce Lazada $1,220 24% $290 $2,829 24% $673 132% Linio $326 35% $115 $809 25% $204 148% Jumia $543 29% $156 $776 25% $194 43% Hellofresh $717 52% $371 $933 52% $482 30% Delivery Hero $1,901 30% $570 $2,472 30% $742 30% Emerging Stars FabFurnish n/a 26% n/a n/a 26% n/a n/a Zanui n/a 31% n/a n/a 31% n/a n/a foodpanda $287 50% $143 $373 50% $185 30% Wimdu $170 52% $89 $312 52% $163 84% CupoNation $45 40% $18 $58 40% $24 30% Helpling $106 40% $42 $138 40% $55 30% Lendico $138 56% $77 $179 56% $100 30% PAYMILL $39 50% $19 $51 50% $25 30% Zencap $99 74% $73 $129 74% $95 30% TravelBird $161 16% $26 $209 16% $34 30% Concepts EatFirst $23 78% $18 $30 78% $23 30% ZipJet $24 95% $23 $31 95% $30 30% Bonalivo $21 86% $18 $27 86% $23 30% SpaceWays $19 91% $17 $25 91% $22 30% tripda $17 66% $11 $22 66% $14 30% Shopwings $23 90% $21 $30 90% $27 30% Others n/m n/m $9 n/m n/m $11 n/m Regional Internet Groups Africa Internet Group $580 33% $193 $753 33% $251 30% Asia Internet Group $414 50% $207 $538 50% $269 30% LATAM Internet Group $307 65% $200 $399 65% $259 30% Mid.East Internet Group $138 50% $69 $179 50% $90 30% Strategic participations $208 $271 30% Other investments $274 $356 30% Cash in hand $2,313 $2,313 0% Liabilities ($110) ($110) 0%

Net Asset Value $6,788 $9,039 33%

NAV Premium/Discount 43% 33% Implied Platform Value $2,947 $2,947 Market Cap $9,735 $11,986 KINV % interest 13.15% 13.15% KINV interest value ($ mm) $1,280 $1,576 Source: Rocket and Kinnevik Data, Deerwood estimates *KINV % interest and RKET cash and shares outstanding adjusted for 2/2015 RKET share issuance of 12 mm shares and acquisition of 30% of Delivery Hero

Based on the difference between Rocket’s current market cap and our estimate of the current NAV, the market-implied value for Rocket’s business-building platform is approximately USD $2.9 billion. It is difficult to pinpoint an exact value for the platform. However, we think the $2.9 billion implied value for the platform is justified by Rocket’s future value of high quality business creation (10+ per year), unique set of competitive advantages from global synergies and scale, and a passionate and committed leadership team to drive performance in the underpenetrated emerging markets that have huge potential. Therefore we consider Rocket to be trading within the reasonable range of fair value at current share price.

Rocket’s market cap in 2017 is then estimated by adding its projected Net Asset Value in 3 years to the platform value, which was kept constant at the current market implied value. As a result, the estimated increase in Rocket’s valuation only reflects the increase in value of the portfolio companies.

Zalando

Overview Zalando is a pure-play online fashion retailer in Europe that attracts 100 million website visits per month and 14 million active customers. The company was founded by Rocket in Germany in 2008 and currently operates in 15 European countries.

Source: Zalando Company Presentation, October 2014

Zalando managed to become the largest online fashion retailer in Europe only 6 years after inception. On the surface, Zalando’s success is due to its unashamed imitation of the US retailer Zappos’ business model. Just like Zappos, Zalando started the site as an online shoe store and expanded quickly into other fashion categories. Management is as focused as Zappos’ to offer the best possible customer service by building an efficient fulfillment and delivery infrastructure. However, Rocket's superior execution capabilities certainly played a big part in Zalando's success. For example, Zalando offers a highly customized shopping experience for each of the 15 European countries in terms of local language assistance, local brand offerings, and payment methods. The company also spent an astounding EUR 850 million on marketing from 2011-2014 that pushed Zalando’s brand awareness to 88% in key markets.

In 2014, Zalando grew revenues 26% year-over-year to EUR 2.2 billion and produced its first positive adjusted operating profit of EUR 82 million and an EBIT margin of 3.7%. Based on the market cap as of the valuation date, Zalando is valued at USD $6,572 million, at an EV/Sales multiple of 1.9x.

Competitive Position Zalando faces intense competition not only from online retailers but also traditional brick-and-mortar retailers that have increasingly stronger online presence, such as Nike, H&M, and Zara.

Source: Zalando Company Presentation, October 2014

The closest European pure-play online fashion retailer peers are Asos and Yoox. Yoox runs multiple e- commerce sites in addition to providing the IT and logistical infrastructure to multiple luxury brands such as Armani and Diesel. Asos is a global online fashion retailer primarily aimed at young adults in their 20s. Asos enjoys higher gross margins than Zalando because of its own private-label brand that makes up half of its revenue. It has an established market-leading position in the UK and is expanding further into key European markets Zalando is currently serving.

European online fashion competitors Zalando Asos Yoox Group Year Founded 2008 2000 2000 Monthly Unique Visitors (mm) 14.4 9.0 1.3 Facebook Likes (mm) 2.9 3.6 0.7 LTM Revenue ($ mm) 2,895 1,525 603 Gross Margin 43% 50% 41% Source: Company data

We do not see Asos as particularly threatening to Zalando’s revenue growth because 1) Asos has a much more narrower demographic focus 2) Zalando has built a much stronger distribution infrastructure in the DACH (Germany, Austria, Switzerland) region and 3) the expected conversion from physical store to online channels offers ample growth prospects that allows multiple winners to co-exist in the European online fashion space.

Valuation Zalando management provided guidance of 20-25% revenue growth in 2015, which we think is achievable. We believe the increase in active customers in the next few years will likely lag historical levels, resulting in deceleration of growth. On the bright side, we think the huge scale of the business will continue to drive further cost efficiencies resulting in lower selling and distribution costs as a percentage of revenues.

Source: Zalando Company Presentation, October 2014

Our financial projection below reflects the expected growth in both customers and online fashion shopping adoption, slightly lower gross margins and improving EBIT margins.

Zalando financial projection (EUR mm, except per customer) 2010 2011 2012 2013 2014 2015 E 2016 E 2017 E Active Customers (millions) 2.5 4.8 9.2 13.1 14.7 15.7 16.7 17.5 % growth 92% 92% 42% 12% 7% 6% 5% Revenue/Active Customer (EUR) 62 106 126 135 151 169 184 197 % growth 73% 19% 7% 12% 12% 9% 7% Revenue 154 510 1,159 1,762 2,214 2,653 3,066 3,442 % growth 2466% 231% 127% 52% 26% 20% 16% 12%

Gross profit 73 234 535 715 959 1,109 1,300 1,449 Gross margin 47% 46% 46% 41% 43% 42% 42% 42% Selling and distribution costs -87 -272 -561 -734 -794 -925 -1,038 -1,131 as % of revenue -57% -53% -48% -42% -36% -35% -34% -33% Administrative expenses -10 -24 -63 -105 -109 -145 -162 -187 as % of revenue -6% -5% -5% -6% -5% -5% -5% -5% Other operating income & expenses 1 2 6 10 6 8 9 10 Total OpEx -96 -293 -618 -829 -897 -1,063 -1,191 -1,308 as % of revenue -63% -58% -53% -47% -40% -40% -39% -38%

EBIT -23 -59 -84 -114 62 46 108 141 EBIT Margin -15.1% -11.6% -7.2% -6.5% 2.8% 1.7% 3.5% 4.1% Valuation ($ mm) $6,572 $9,089

2017 Revenue Multiple 2.0x Exchange Rate (EUR-USD) 1.15 2017 Zalando EV ($ mm) $7,916 + net cash $1,173 2017 Zalando Equity Valuation $9,089

Kinnevik % interest 32.0% 2017 KINV interest value ($ mm) $2,912 Source: Zalando data, Deerwood estimates

Zalando is currently trading at a slightly lower EV/Sales multiple compared to its peers.

Online fashion retailers comparison Enterprise LTM % YOY EBITDA Active Revenue/ EV/S ($ mm) Value Revenue Growth Margin Customers Customer Vipshop $12,570 $3,065 113% 3.8% 4.1x 9.5 $323 ASOS plc $3,863 $1,525 27% 5.1% 2.5x 9.0 $169 Yoox Group $1,277 $603 15% 8.0% 2.1x 1.3 $464 Boohoo.com $392 $193 27% 10.0% 2.0x 2.9 $67 Zulily $1,990 $1,066 84% 2.5% 1.9x 4.5 $237 Average 53% 5.9% 2.5x $237

Zalando $5,446 $2,895 25.7% 4.9% 1.9x 14.4 $201 Source: Morningstar, Yahoo, Company filings, Deerwood estimates Active customers in millions, Revenue/Customer in $

We can think of several reasons why Zalando deserves a premium relative to peers, such as its market- leading position in Europe and the scale of its infrastructure. However, for our 2017 valuation of Zalando we assigned a conservative 2.0x sales multiple which is supported by the company’s growth expectations. We forecast Kinnevik’s stake in Zalando to be worth USD $2.9 billion in 2017.

Management and Ownership Structure Co-founders Robert Gentz and David Schneider are both graduates of WHU Otto Beisheim School of Management in Germany. Oliver Samwer, who is also an alumnus of the school, offered them positions at Rocket Internet after the duo’s failed attempt to start a Facebook clone in Latin America. From within Rocket, Gentz, Schneider, and Rubin Ritter co-founded an online shoe retailer, which eventually became Zalando.

Zalando ownership structure

10.0%

Kinnevik 11.2% 32.0% Global Founders Gmbh Anders Holch Povlsen Yuri Milner 3.2% Holtzbrinck Ventures 5.1% Tengelmann Len Blavatnik 6.9% Other Shareholders Public Free Float 7.1% 15.0%

9.4%

Source: Zalando data

Timeline 2008 Zalando founded as an online shoe retailer in Germany within Rocket Internet. 2009 Kinnevik partnered with Rocket Internet. 2011 Kinnevik invested SEK 828 million in Zalando. 2012 Kinnevik acquired shares in Zalando from Rocket Internet and Zalando management for a total purchase price of EUR 206 mm. 2013 Kinnevik invested SEK 855 million in Zalando. In August, Kinnevik signed an agreement with Rocket Internet to become the largest owner in Zalando, with 36% of the capital and votes. 2014 Zalando IPO priced at EUR 5.3 billion in Sep 2014. Kinnevik’s ownership stake in Zalando becomes 32.0% after the IPO, excluding dilution from potential over-allotment.

Global Fashion Group

Global Fashion Group (GFG) Overview Global Fashion Group consists of five leading fashion e-commerce businesses, Dafiti (Latin America), Jabong (India), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia). The group operates across five continents with a focus on growth markets, covering 23 countries with a EUR 330 billion fashion market and population of over 2.5 billion people. We estimate GFG has a total of 5.7 million active customers and USD $845 million annual revenue in 2014.

Source: Kinnevik Capital Markets Day Presentation, September 2014

Similar to Zalando, the five regional businesses were incubated individually within Rocket Internet from 2011 to 2012. They were combined into GFG in September 2014 (pending final closing) and are expected to deliver synergies by leveraging economies of scale in sourcing and consolidating operating resources. We believe the GFG companies have strong potential to grow into Zalando-size businesses in their respective regions and create significant value for both Kinnevik and Rocket Internet shareholders.

Global Fashion E-commerce Market According to a recent McKinsey report, the online channels of the global clothing and footwear market have been growing 3 to 4 times faster than offline channels.

Source: McKinsey Consumer and Shopper Insights, September 2014

Fashion is an attractive sector of the e-commerce market because of its relatively early adoption, high gross margins and logistical efficiencies. We believe the online fashion e-commerce market will continue its rapid growth, especially in the GFG emerging markets as growth in internet penetration and online shopping accelerates.

Source: Kinnevik Capital Markets Day, September 2014

Competitive Positions With most competitors arriving earlier in the game, the GFG businesses were able to disrupt into top 3 market positions in their respective regions without first-mover advantage.

Global Fashion Group competitive landscape Monthly Facebook Alexa Traffic SimilarWeb Year Unique Private Label Merchants on Likes Rank in Key Traffic Rank in Launched Visitors Offering platform (millions) Country Key Country (millions) Brazil Dafiti 2011 25 6.6 134 122 Yes 2000+ Netshoes 2000 17 9.4 26 38 Yes 100+ India Jabong 2012 24 3.6 14 10 Yes 1700+ Myntra 2007 12 2.7 39 28 Yes 650+ Russia Lamoda 2011 n/a n/m 111 149 Yes 1000+ Wildberries 2005 n/a n/m 71 64 n/a 1000+ Kupivip.ru 2008 n/a n/m 282 445 No 1500+ Indonesia Zalora 2012 20 5.9 56 98 Yes 500+ qoo10 2010 n/a 0.3 146 210 No n/a Berrybenka 2011 n/a 0.5 319 466 Yes 800+ United Arab Emirates Namshi 2011 n/a 0.7 146 150 Yes 500+ Markavip 2010 n/a 1.4 212 422 No n/a Source: Kinnevik and Rocket data, Alexa, SimilarWeb, Facebook, news articles

We believe this success is due to Rocket Internet’s operational expertise in scaling e-commerce businesses in a speedy fashion. In addition to executing all of the best practices borrowed from Zalando in terms of building fulfillment infrastructure and creating compelling customer experiences, the GFG businesses really pushed above and beyond in their local markets to fight for market share. For example, most products on Jabong.com are delivered for free in India except for a convenience fee of Rs. 49 (USD $0.80) charged for cash-on-delivery orders, whereas Jabong’s rival Myntra would charge Rs. 99 (USD $1.60) shipping fee unless the total order amount is Rs. 999 (USD $16.20) or more. Another example - Namshi is trying to gain a competitive edge by offering same and next day delivery in Saudi Arabia. In comparison, delivery generally takes 3 – 6 working days for Zalando in the UK.

The Global Fashion Group faces many unique challenges in the e-commerce markets that they serve - poor logistics infrastructure, low credit card penetration, cash on delivery payment preference, and fragmented markets. However, we believe the group can weather through these challenges and fend off competition with the advantages built upon scale, experience and a large capital base.

Valuation Currently, the GFG companies are all booking losses as they fight for market share. We expect the losses to continue as they continue growing transaction volume and active customers until revenue reaches USD $1 billion or more. Therefore we value them on a sales multiple basis.

Online fashion retailer comparison Enterprise LTM % YOY EBITDA Active Revenue/ 2017 LTM EV/S 2017 EV/S ($ mm) Value Revenue Growth Margin Customers Customer Valuation Vipshop $12,570 $3,065 113% 3.8% 9.5 $323 4.1x n/a n/a ASOS plc $3,863 $1,525 27% 5.1% 9.0 $169 2.5x n/a n/a Yoox Group $1,277 $603 15% 8.0% 1.3 $464 2.1x n/a n/a Boohoo.com $392 $193 27% 10.0% 2.9 $67 2.0x n/a n/a Zalando $5,446 $2,895 26% 4.9% 14.4 $201 1.9x 2.0x $9,089 Zulily $1,990 $1,066 84% 2.5% 4.5 $237 1.9x n/a n/a Average 48.7% 5.7% $225 2.4x

Dafiti $895 $238 36% -40.0% 2.1 $114 3.8x 3.0x $1,247 Jabong $446 $193 169% -37.1% n/a n/a 2.3x 3.5x $2,217 Lamoda $828 $238 68% -35.3% 1.8 $131 3.5x 3.0x $1,306 Zalora $603 $129 44% -76.2% 1.6 $83 4.7x 3.0x $842 Namshi $121 $47 224% -9.0% 0.2 $229 2.6x 3.5x $565 Group Total $2,892 $845 5.7 $115 3.4x $6,177 Source: Morningstar, Yahoo, Company filings, Deerwood estimates *Estimated figures if 2014 4Q financials unavailable *Active customers in millions, Revenue/Customer in $

Comparable companies in relatively more mature markets such as ASOS and Zalando trade at 1.9-2.5x sales, whereas the Chinese flash sales site Vipshop trades at 4.1x sales, although with a much higher revenue growth rate. Given the GFG companies’ better growth prospects compared to its more mature peers, as well as the group’s scale advantages after global integration, we consider 2017 sales multiples of 3.0x – 3.5x reasonable. We forecast Kinnevik’s stake in Global Fashion Group to be worth USD $1.6 billion in 2017.

Dafiti financial projection (BRL mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E Active Customers (000s) 1,039 1,632 2,095 2,619 3,143 3,615 % growth 57% 28% 25% 20% 15% Revenue/Active Customer (BRL) 215 257 272 286 300 315 % growth 19% 6% 5% 5% 5% Revenue (BRL mm) 224 419 570 748 943 1,139 % growth 88% 36% 31% 26% 21%

EBITDA -169 -205 -228 -225 -189 -114 EBITDA Margin -75% -49% -40% -30% -20% -10% Cash (Deficit) 194 85 -140 -328 -442 2014 Valuation (mm USD) $895 $1,247

2017 Revenue Multiple 3.0x Exchange Rate (USD-BRL) 2.74

2017 Dafiti Valuation ($ mm) $1,247 KINV % interest 26.1% KINV % interest post-dilution 23.1% 2017 KINV interest value ($ mm) $288 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Jabong financial projection (INR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E Total orders (mm) 3.4 9.4 16.0 24.1 31.3 % growth 180% 70% 50% 30% Revenue/Order (INR) 1,301 1,250 1,250 1,250 1,250 % growth -4% 0% 0% 0% Revenue (INR mm) 1,433 4,385.7 11,798 20,056 30,084 39,109 % growth 206% 169% 70% 50% 30%

EBITDA -2,876 -2,492 -4,381 -5,442 -5,154 -2,790 EBITDA Margin -201% -57% -37% -27% -17% -7% Cash (Deficit) 7,775 7,028 1,587 -3,568 -6,358 Valuation ($ mm) $446 $2,217

2017 Revenue Multiple 3.5x Exchange Rate (USD-INR) 61.75

2017 Jabong Valuation ($ mm) $2,217 KINV % interest 26% KINV % interest post-dilution 24.9% 2017 KINV interest value ($ mm) $579 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Lamoda financial projection (RUB mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E Active Customers (000s) 419 1,088 1,823 2,462 3,200 4,000 % growth 160% 68% 35% 30% 25% Revenue/Active Customer (RUB) 3,522 4,733 5,479 6,027 6,630 7,293 % growth 34% 16% 10% 10% 10% Revenue (RUB mm) 1,476 5,150 9,991 14,837 21,216 29,173 % growth 249% 94% 49% 43% 38%

EBITDA -1,604 -1,921 -3,525 -3,751 -3,243 -1,542 EBITDA Margin -109% -37% -35% -25% -15% -5% Cash (Deficit) 2,608 1,696 -2,056 -5,299 -6,840 2014 Valuation ($ mm) $828 $1,306

2017 Revenue Multiple 3.0x Exchange Rate (USD-RUB) 67.00

2017 Lamoda Valuation ($ mm) $1,306 KINV % interest 26% KINV % interest post-dilution 24.2% 2017 KINV interest value ($ mm) $316 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Zalora financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E Active Customers (000s) 450 1,023 1,564 2,190 2,956 3,843 % growth 127.3% 52.9% 40.0% 35.0% 30.0% Revenue/Active Customer (EUR) 79 67 63 63 63 63 % growth -15% -6% 0% 0% 0% Revenue (EUR mm) 36 69 99 139 188 244 % growth 93% 44% 40% 35% 30%

EBITDA -69 -68 -76 -85 -87 -76 EBITDA Margin -194% -99% -76% -61% -46% -31% Cash (Deficit) 91 96 11 -76 -152 2014 Valuation ($ mm) $603 $842

2017 Revenue Multiple 3.0x Exchange Rate (EUR-USD) 1.15

2017 Zalora Valuation ($ mm) $842 KINV % interest 26.1% KINV % interest post-dilution 21.6% 2017 KINV interest value ($ mm) $182 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Namshi financial projection (AED mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E Active Customers (000s) 36 76 205 307 430 559 % growth 170% 50% 40% 30% Revenue/Active Customer (AED) 453 700 841 925 999 1,059 % growth 55% 20% 10% 8% 6% Revenue (AED mm) 16 53.2 172 284 430 593 % growth 226% 224% 65% 51% 38%

EBITDA -59 -49 -16 -14 -4 18 EBITDA Margin -360% -93% -9% -5% -1% 3% Cash (Deficit) 18 27 12 8 26 2014 Valuation ($ mm) $121 $565 Source: Kinnevik and Rocket Internet filings, Deerwood estimates

Revenue Multiple 3.5x Exchange Rate (USD-AED) 3.67

2017 Namshi Valuation ($ mm) $565 KINV % interest 26% 2017 KINV interest value ($ mm) $147 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Management and Ownership Structure GFG businesses are led by high quality management teams with relevant experience.

Co-Founders Experience Dafiti Philipp Povel Founder of MyBrands – sold to Zalando Malte Huffmann Founder of MyBrands – sold to Zalando Thibaud Lecuyer JP Morgan, INSEAD Malte Horeyseck Siemens, Harvard Business School

Jabong Arun C Mohan IDC, INSEAD Praveen Sinha Founder of AquaBrim, McKinsey, Microsoft

Lamoda Niels Tonsen Rocket Internet, EBS Business School Dominik Picker Aalto-yliopisto Florian Jansen McKinsey, London School of Economics Burkhard Binder Rocket Internet

Zalora Harry Markl McKinsey, Siemens Cooper McGuire Goldman Sachs, Viet Thai International Magnus Grimeland McKinsey, Rocket Internet

Namshi Hosam Arab Harvard Business School, Waha Capital, GE Faraz Khalid Microsoft, The Wharton School Hisham Zarka McKinsey, Google Source: Kinnevik Rocket Capital Markets Day, May 2014

GFG ownership structure

26.10% Kinnevik 43.0% Rocket Internet AG Access Industries

23.5% Other Shareholders

7.4%

Source: Kinnevik and Rocket data

Since launch in 2011 and 2012, the five GFG companies have attracted funding in excess of EUR 1 billion from Kinnevik, Access Industries, Summit Partners, Verlinvest, Ontario Teachers' Pension Plan, Tengelmann and a number of other well-known investors. Notably, the companies even attracted funding from government entities such as CDC Group, a Development Finance Institution owned by the UK Government and International Finance Corporation, a member of the World Bank Group. The

financial backing from these blue chip investors demonstrates a healthy vote of confidence in the future of the GFG businesses.

Timeline GFG 2014 The five businesses were combined to create Global Fashion Group. All rulings by fiscal authorities and all antitrust approvals have been received late 2014. 2015 Completion of the remaining roll-up transactions is expected in Q1 2015.

Dafiti 2011 Dafiti first opened in Brazil and later expanded to four other Latin American countries. The company’s initial $50 mm in funding was provided by Rocket Internet. 2012 J.P. Morgan Asset Management invested $45 million (BRL $90 million). 2012 Closed a new round of financing worth $65 million funded by Quadrant Capital Advisors ($32 million), Kinnevik, Summit Partners and other investors. 2013 Received $10 million from Mexico’s Leon Group, a shoe brand consortium. 2013 New investment of $70 million from the Ontario Teachers’ Pension Plan. 2014 Received investment of €15 million from International Finance Corporation.

Jabong 2012 Jabong started operations in early 2012 in India. 2014 Raised $100 million in funding, $27.5 mm of the funding from CDC Group.

Lamoda 2011 Lamoda.ru founded in early 2011 in Russia and the CIS. 2012 Raised an estimated $60mn (€46.6mn) from JP Morgan.

2013 Secured $130 mm from Access Industries, Summit Partners and Tengelmann.

2013 Further ramped up own delivery fleet LamodaExpress.

2014 Secured a $10 mm investment from the International Finance Corporation.

Zalora 2012 Zalora launched its various localized sites. 2012 JP Morgan invested in Sep 2012.

2013 Received US $26 million investment from German retail company Tengelmann.

2013 Raised $100 million from Summit Partners, Kinnevik, Verlinvest, and Tengelmann.

2013 Raised $112 million from investors including Access Industries and Scopia Capital.

Namshi 2011 Namshi founded in October 2011. 2012 Announced US $20 million funding from J.P. Morgan and Blakeney Management.

2013 Raised $13 million led by Summit Partners to sustain growth in Middle East.

Source: Kinnevik data, news articles

Home24

Overview Home24, founded in 2010, is an online retailer of furniture and home products. As of 2014 4Q, the company operates in 7 core countries in Western Europe, and is expanding internationally to Brazil, Uruguay and Paraguay under the Mobly brand. The company operates an inventory-based business model, with proprietary logistics infrastructure and sourcing relationships.

Source: Kinnevik Capital Markets Day, September 2014

In 2014, we estimate Home24 will grow revenues 90% year-over-year to EUR 176 million and produce EBITDA losses of EUR -48 million, at an EBITDA margin of -27%. Based on the latest funding round in December 2014, Home24 is valued at USD $937M, a sales multiple of 4.1x.

Competitive Position The online furniture space in Western Europe is highly fragmented, with numerous start-ups carving out niches across the premium/discount spectrum and flash sales/non-flash sales formats. Incumbent IKEA is also ramping up its omni-channel sales. Home24 takes a middle-of-the-road approach with everyday, affordable, yet fashionable furniture marketed without using flash sales or curated promotions.

Source: Kinnevik Capital Markets Day, September 2014

In its core country Germany, Home24's website traffic ranking is in a leading position compared to Roller and Monoqi (Ikea.com German website not ranked on Similarweb).

Similarweb country rank Home24 Roller Westwing Monoqi Fashionforhome Avandeo Livingo Germany 475 801 1,245 1,566 3,702 60,839 67,992 Source: Similarweb, 2015 February

Valuation Investors are quite optimistic about Home24's prospects, as demonstrated by the December 2014 financing round of EUR 16 million at a sales multiple of 4.1x. The 2014 3Q customer and financial data also supports a bullish view as active customers grew 58% and GMV was up 77%.

Home24 customer data, 2014 T9M vs. 2013 T9M (000s, except GMV) 2013 T9M 2014 T9M Total Customers 580 1,160 % growth 100% Orders 388 637 % growth 64% Active Customers 400 630 % growth 58% GMV (€ mm) 71 125 % growth 77% Source: Rocket Internet data

Our financial projection for Home24 assumes high double digit customer growth and flat revenue per customer. We forecast Home24’s EBITDA margin to reach breakeven in 2017, at a lower revenue level than our breakeven revenue estimates for general merchandise B2C companies, because of the higher revenue per order and gross margin for home furnishing retailers. We estimate fair value for Home24 in 2017 to be USD $1.1 billion, based on a 1.5x sales multiple.

Home24 financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Active Customers (000s) 287 435 761 1,294 1,941 2,718 3,533 4,593 % growth 52% 75% 70% 50% 40% 30% 30% Revenue/customer (€) 216 213 232 232 232 232 232 232 % growth -1% 9% 0% 0% 0% 0% 0% Revenue 62 93 176 300 450 629 818 1,064 % growth 49% 90% 70% 50% 40% 30% 30%

EBITDA -81 -38 -48 -30 -22 0 41 53 EBITDA Margin -130% -41% -27% -10% -5% 0% 5% 5% Cash (Deficit) 21 34 55 25 3 3 44 97 Valuation ($ mm) $937 $1,086

2017 Revenue Multiple 1.5x Exchange Rate (EUR-USD) 1.15

2017 Home24 Valuation ($ mm) $1,086 KINV % interest 20.0% 2017 KINV interest value ($ mm) $217 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Based on our 2017 revenue forecast of EUR 629 million, a sales multiple of 1.5x seems reasonable, given that Wayfair, the closest comparable to Home24, is currently priced at a 1.5x sales multiple with 2014 revenue of $1.3 billion.

Online home furnishings retailer comparison Market 2014 % YOY 2014 EBITDA EV/S EV/EBITDA Active Revenue / Cap Revenue Growth EBITDA Margin Customers Customer ($ mm) Wayfair 2,393 1,319 44% -63 -5% 1.5x n/m 3.2 $412 One Kings Lane 912 450 50% n/a n/a 1.6x n/a n/a n/a Overstock.com 547 1,497 15% 34 2% 0.5x 21.1x 7.3 $205 Williams-Sonoma 7,839 4,700 7% 644 14% 1.6x 12.0x n/a n/a Restoration Hardware 3,470 1,865 20% 485 26% 1.9x 7.1x n/a n/a Average 27% 9% 1.4x 13.4x $309

Home24 937 231 90% -62 -27% 4.1x n/m 0.76 $303 Westwing 516 256 75% -77 -30% 2.0x n/m 0.76 $337 Source: Company filings, Deerwood estimates *Estimated figures if official financials unavailable *Active customers in millions, Revenue/Customer in $

It is interesting to note that the two US brick-and-mortar companies, Williams-Sonoma (51% of total sales online) and Restoration Hardware (47% of total sales online) garner higher sales multiples than the faster-growing purely online furniture retailers Wayfair and Overstock.com. In the home and furnishing space, it seems that the market values profitability over sales growth, in contrast with how the market prices general merchandise B2C online retailers such as Amazon and JD.com.

Management and Ownership Structure Dr. Phillip Kreibohm, Co-Founder and Managing Director. Responsible for Assortment, Product Development & Sourcing. Previous experience with The Boston Consulting Group and Freshfields.

Domenico Cipolla, CEO. Responsible for Overall Strategy & Operations. Previous experience with The Boston Consulting Group, L'Oreal, and Cinven Private Equity.

Constantin Eis, Managing Director. Responsible for Marketing & Finance. Previous experience with Roland Berger Strategy Consultants, Credit Suisse, Bertelsmann.

Home24 ownership structure

30.50% Rocket 49.50% Kinnevik Other investors

20%

Source: Kinnevik, Rocket Internet data

Timeline 2009 Home24 founded by Dr. Philipp Kreibohm. 2014 Valued at EUR 498M in July. 2014 Raised EUR 16M at EUR 815M valuation in December. Source: Kinnevik, Rocket Internet data

Westwing

Overview Westwing Home and Living, founded in 2011, is an online "shoppable magazine" and curator of higher- end furniture and home accessories. The company's target demographic and positioning is similar to One Kings Lane and Wayfair's premium brands. Westwing operates in 15 countries across Europe, Russia and Brazil, and has a zero-inventory business model, sourcing products from over 3,000 suppliers with proprietary logistics assets and supply chains.

Source: Westwing.de website

In 2014, we estimate Westwing will increase revenues 75% year-over-year to EUR 196 million and produce EBITDA loss of EUR -59 million at an EBITDA margin of -20%. Based on the latest funding round in December 2014, Westwing is valued at USD $516M, a sales multiple of 2.0x.

Competitive Position On the premium/discount, impulse-buying/need-based buying spectrum, Westwing is grouped in the same category as Fab, Monoqi, Fashion for HOME, and One Kings Lane.

Source: Kinnevik Rocket Capital Markets Day 2014

In its core German market, Westwing is ahead of other flash-sale, curated online furnishing sites in terms of traffic ranking, but behind Roller and Home24.

Similarweb country rank Home24 Roller Westwing Monoqi Fashionforhome Avandeo Livingo Germany 475 801 1,245 1,566 3,702 60,839 67,992 Source: Similarweb, 2015 February

Valuation Our valuation approach to Westwing is similar to Home24, given that both companies’ growth trajectories are similar. In the first 9 months of 2014, Westwing orders were up 85%, active customers were up 74%, and GMV was up 63%.

Westwing Customer Data, 2014 T9M vs. 2013 T9M (000s, except GMV) 2013 T9M 2014 T9M Total Customers 480 980 % growth 104% Orders 800 1,482 % growth 85% Active Customers 390 680 % growth 74% GMV (€ mm) 83 135 % growth 63% Source: Rocket Internet, Kinnevik data

Because 2014 3Q financials were not released for Westwing, but were released for Home24, our near- term forecast for Westwing is subject to a higher degree of uncertainty, particularly for 2014 estimates. We forecast that Westwing revenues will grow between 30-50% per year from 2015-2017, at which point EBITDA margins will reach breakeven at revenue of EUR 535 million. At 1.5x sales, Westwing would be valued at USD $923 million in 2017.

Westwing financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Active Customers (000s) 226 447 760 1,140 1,596 2,075 2,489 2,987 % change 98% 70% 50% 40% 30% 20% 20% Revenue/customer (€) 203 251 258 258 258 258 258 258 % change 24% 3% 0% 0% 0% 0% 0% Revenue 46 112 196 294 412 535 642 771 % change 145% 75% 50% 40% 30% 20% 20%

EBITDA -62 -40 -59 -29 -21 0 32 39 EBITDA Margin -135% -35% -30% -10% -5% 0% 5% 5% Cash (Deficit) 9 30 42 12 -8 -8 24 62 Valuation ($ mm) $516 $923

2017 Revenue Multiple 1.5x Exchange Rate (EUR-USD) 1.15

2017 Westwing Valuation ($ mm) $923 KINV % interest 13.0% 2017 KINV interest value ($ mm) $120 Source: Kinnevik, Rocket Internet, Deerwood estimates

It is interesting to compare Home24 and Westwing’s latest financing valuations. Despite having similar growth and revenue levels, in December 2014 Home24 was able to raise financing at twice the sales multiple of Westwing, (4.1x compared to 2.0x), albeit both rounds were relatively small amounts of EUR 16 million and EUR 25 million, respectively.

Management and Ownership Structure Stefan Smaller, CEO and co-founder. Previous experience with Bain & Co., dooyoo, Friendity, and Daimler.

Delia Fischer, co-founder & Style Director. Previous experience with ELLE, and ELLE Decoration.

Westwing ownership structure

30.50% Rocket 49.50% Kinnevik Other investors

20%

Source: Kinnevik, Rocket Internet

Timeline 2011 Westwing founded by Stefan Smaller and Delia Fischer. 2012 Raised USD $50 million from Rocket, Kinnevik, Access Industries, Summit Partners, and Holtzbrinck. 2013 Tengelmann Ventures invested an undisclosed amount. 2014 Raised EUR 72 million from Odey, Fidelity, and Tengelmann in April. 2014 Valued at EUR 353 million in May. 2014 Raised EUR 25 million and valued at EUR 449 million in December. Source: Kinnevik, Rocket Internet data

Qliro

Overview Qliro Group (formerly CDON Group) is a Swedish company that owns a portfolio of e-commerce operators in the Nordic region with 4.2 million active customers. Qliro Group divides its operations into four segments: Entertainment, Fashion, Sports & Health and Home & Garden.

Source: Kinnevik Capital Markets Day, September 2014

In 2014, the Group grew revenues 13% year-over-year to SEK 5.0 billion and generated operating profit (EBIT) of SEK 33 million at an EBIT margin of 0.7%. Qliro is valued at USD $295 million, at an EV/Sales multiple of 0.4x.

Competitive Position Qliro Group has the #1 position in the fashion (Nelly), sports nutrition (Gymgrossisten), and general merchandise/marketplace (CDON) segments in the Nordic region.

Facebook Likes Alexa Rank in SimilarWeb (thousands) Sweden Rank in Sweden CDON.com 583 81 137 Webhallen.se 69 63 326 Adlibris.se 22 168 211 Ginza.se 21 511 825

GYMGROSSISTEN.COM 137 449 363 MM Sports.se 35 2,118 921 Gymvaruhuset.com 4 5,474 5880

Nelly.com 785 397 226 Stylepit.se 208 1294 931 Bubbleroom.se 63 1774 923 Source: Alexa, SimilarWeb, Facebook

In 2014, the group launched the new online payment system Qliro Payment Solution. Management considers payments to be an important strategic investment and expects it to reach profitability in 2016 and contributes SEK 100mm in pretax profit in 2018. Assuming 50% utilization in the group member websites, Qliro will handle transactions for over SEK 3 billion in 2017. We believe management’s goal is achievable and a successful execution can provide potential upside to earnings.

Valuation Qliro currently trades at a significantly discount to its global peers based on an EV/Sales multiple due to deterioration in operating margins over the past four years.

Online retailer comparison

Enterprise LTM % YOY EBITDA Active Revenue/ EV/S Value Revenue Growth Margin Customers Customer ($ mm) Amazon 165,212 88,988 20% 7% 1.9x 270 $330 JD.com 30,700 18,000 57% 4% 1.7x 46 $391 Vipshop 12,570 3,065 113% 4% 4.1x 9.5 $323 ASOS plc 3,863 1,525 27% 5% 2.5x 9.0 $169 Yoox Group 1,277 603 15% 8% 2.1x 1.3 $464 Boohoo.com 392 193 27% 10% 2.0x 2.9 $67 Zulily 1,990 1,066 84% 3% 1.9x 4.5 $237 Average 49.1% 6% 2.3x $283

Qliro 261 609 13% 1% 0.4x 4.2 $145 Source: Company data, Deerwood estimates *Active customers in millions, Revenue/Customer in $

Our financial projection assumes that Qliro Group will continue to grow active customers 5% per year with increasing margins due to logistical efficiency improvement initiatives. We think the group is undervalued on a sum-of-the-parts basis due to multiple brands’ leading market position and Qliro Payment Solution’s earning potential. We believe a conservative 0.5x EV/Sales multiple in 2017 is justified considering the expected EBIT margin improvement and low growth prospects in the markets that Qliro Group members serve.

Qliro financial projection (SEK mm, except per customer) 2009 2010 2011 2012 2013 2014 2015 E 2016 E 2017 E Active Customers (millions) 3.8 4.2 4.4 4.6 4.8 % growth 11% 5% 5% 5% Revenue/Active Customer 1,184 1,200 1,212 1,224 1,236 % growth 1% 1% 1% 1% Revenue 1,746 2,210 3,404 4,462 4,441 5,015 5,318 5,640 5,981 % growth 27% 54% 31% 0% 13% 6% 6% 6%

Gross profit 348 420 587 471 594 711 781 856 938 Gross Margin 19% 17% 11% 13% 14% 15% 15% 16%

Operating profit/loss (EBIT) 125 135 129 -174 -48 33 9 19 30 EBIT Margin 6.1% 3.8% -3.9% -1.1% 0.7% 1.2% 2.2% 3.2%

2017 EV/Sales Multiple 0.5x Exchange Rate (EUR-USD) 8.24 2017 Qliro EV ($ mm) $363 + net cash $65 2017 Qliro Valuation ($ mm) $428

KINV % interest 28.5% 2017 KINV interest value ($ mm) $122 Source: Qliro data, Deerwood estimates

Management and Ownership Structure Paul Fischbein, CEO, joined Qliro Group in 2011 when Tretti AB, the company that he founded and served as CEO of since 2004, was acquired by the group. Nicolas Adlercreutz, CFO, previously served as CFO at PA Resources AB, a public company in Stockholm, Sweden. Three Kinnevik management team members currently serve on the board of directors.

Qliro ownership structure

Kinnevik 28.5% Swedbank Robur Funds

47.8% Oppenheimer Funds Invesco Funds 7.9% Henderson Funds Other shareholders 5.6% 5.0% 5.2%

Source: Qliro Group data

Timeline 1999 Online record-store CDON.com was launched. 2007 Acquired Nelly.com and Linuslotta.com, both online fashion stores. 2008 Acquired Gymgrossisten.com and its Finnish equivalent, Fitnesstukku.fi. 2008 Bodystore.com was included in the acquisition of Gymgrossisten in 2008. 2010 CDON Group founded Heppo.com, an online shoe retailer. 2010 CDON Group was demerged from Modern Times Group and listed on Nasdaq OMX. 2011 Acquired brand furniture and interior decoration retailer RUM21.se. 2012 CDON Group acquired the logistics operations of Business Linc BL AB. 2013 Launched Milebreaker.com in the Sports & Health segment. 2013 Divested Heppo AB to Footway Group AB for SEK 43 million. 2014 Kinnevik invested SEK 241 mm to support the launch of the Qliro payment service solution. 2014 The payment solution Qliro was launched in Sweden Q4 2014. 2015 CDON Group changed its name to Qliro Group. Source: Qliro data

Lazada

Overview Lazada, founded in 2012, is an online general merchandise retailer in Southeast Asia. As of 2014 4Q, the company operates in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, with 559 million addressable customers. The goal of the company is to “control the Southeast Asian eCommerce ecosystem as Alibaba does in China”, by offering multiple operating models in B2C, Marketplace, C2C, Payment, and Fulfillment.

Source: Kinnevik Rocket Capital Markets Day, May 2014

For 2014, we forecast Lazada to grow revenues 175% year-over-year to EUR 156 million and generate EBITDA loss of EUR -125 million at an EBITDA margin of -80%. Based on the latest funding round in November 2014, Lazada is valued at USD $1.22 billion, at a sales multiple of 6.0x.

Competitive Position There is a high level of competition for e-commerce in Southeast Asia, with established players and new entrants fighting for market share via B2C and C2C models, both across the region and within individual countries. A number of e-commerce start-ups (Multiply.com, 123.vn, Project Lana) have already folded.

On the B2C side, Lazada competes with Bhinneka, Rakuten, Tokopedia (backed by Softbank), and Blibli. On the C2C/classifieds side, Lazada competes with Kaskus, OLX (backed by Naspers), and ChoDienTu (backed by eBay) in Vietnam. There are also rumors Alibaba will enter the region, after acquiring a 10% stake in logistics provider Singapore Post in March 2014.

In general, the three factors of success for building the #1 e-commerce retailer are being the first mover, scale/capital, and execution. Although Lazada is a relatively new entrant, we believe it has ample capital and operational experience (with the help of Rocket) to become the B2C leader in Southeast Asia.

Lazada engagement metrics, 2014 March

Source: Kinnevik Rocket Capital Markets Day, May 2014

Even compared to C2C classified sites with much longer history of operation, Lazada is among the highest trafficked websites for e-commerce, and is the only company with prominent positions in all 6 countries.

Similarweb country rank Lazada OLX Kaskus Tokopedia Rakuten BliBli Bhinneka Indonesia 12 15 7 27 199 123 101 Malaysia 13 157 Philippines 11 9 239 Singapore 61 Thailand 21 9 Vietnam 25 Source: Similarweb, 2015 February

Valuation The last financing round for Lazada was in November 2014, when Rocket Internet, Verlinvest, Kinnevik, and Temasek contributed a total of EUR 200 million at EUR 1.0 billion valuation. The previous financing round in 2014 February valued the company at EUR 504 million, which implies that Lazada’s value is growing faster than 100% per year.

Lazada’s customer metrics for the first six months of 2014 support a growth rate of well over 100%, as transactions were up 313% and active customers were up 251% year-over-year.

Lazada customer data, 2014 1H vs. 2013 1H (000s, except GMV) 2013 1H 2014 1H Total Customers 441 1,760 % YOY growth 299% Transactions 446 1,840 % YOY growth 313% Active Customers 402 1,410 % YOY growth 251% GMV (€ mm) 24 73 % YOY growth 204% Source: Rocket Internet data

Our financial projection for Lazada assumes that the company will continue to grow rapidly until it reaches revenue of EUR 1.2 billion in 2018, at which point EBITDA turns breakeven.

Lazada financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Active Customers (000s) 132 774 2,516 6,289 14,150 24,762 37,143 48,286 % growth 486% 225% 150% 125% 75% 50% 30% Revenue/customer (€) 73 62 56 50 50 50 50 % growth -15% -10% -11% 0% 0% 0% Revenue 57 156 351 703 1,230 1,845 2,399 % growth 175% 125% 100% 75% 50% 30%

EBITDA -51 -125 -141 -70 -62 -92 0 EBITDA Margin -89% -80% -40% -10% -5% 0% 0% Cash (Deficit) 183 365 224 154 93 93 93 Valuation ($ mm) $1,220 $2,829

2017 Revenue Multiple 2.0x Exchange Rate (EUR-USD) 1.15

2017 Lazada Valuation ($ mm) $2,829 KINV % interest 10.0% 2017 KINV interest value ($ mm) $283 Source: Kinnevik, Rocket Internet, Deerwood estimates

Our choice of 2.0x revenue multiple in 2017, which is equivalent to Amazon’s current valuation, is on the conservative side, given that Flipkart (India) and Souq (Middle East) have reportedly raised financing at an estimated 5.0-7.0x revenues.

Asia B2C online retailer comparison Market 2014 % YOY 2014 EBITDA EV/S EV/EBITDA Active Revenue / ($ mm) Cap Revenue Growth EBITDA Margin Customers Customer Amazon 174,363 88,988 20% 6,421 7% 1.9x 25.7x 270 $330 JD.com 36,600 18,000 57% 800 4% 1.7x 38.4x 46 $391 Flipkart 11,000 2,200 120% n/a n/a 5.0x n/a n/a n/a Souq 700 100 90% n/a n/a 7.0x n/a n/a n/a Average 72% 6% 3.9x $360

Lazada 1,220 204 175% -163 -80% 6.0x n/m 2.5 $81 Source: Company data, Deerwood estimates *Estimated figures if official financials unavailable *Active customers in millions, Revenue/Customer in $

Management and Ownership Structure Maximilian Bittner, CEO. Joined Lazada in 2012 after experience at McKinsey & Company, Morgan Stanley, and an MBA at Kellogg Business School.

Pierre Poignant, COO. Previous experience with McKinsey & Company.

Lazada ownership structure

4% 7% Rocket Internet 27% 10% Others Tesco Overseas Kinnevik 25% Access Industries 27% Summit Partners

Source: Rocket Internet, Kinnevik data, news articles

Timeline 2012 Lazada founded in March. 2012 Raised $40 million from Kinnevik at $365 million valuation in November. 2013 During 2013 raised a total of $370 million from various investors. 2014 Valued at EUR 504 million in February. 2014 Raised EUR 200 million at a EUR 1.0 billion valuation in November. Source: Kinnevik, Rocket Internet data

Linio

Overview Linio, founded in 2012, is a B2C/marketplace online retailer in Spanish-speaking Latin America. As of 2014 4Q, it operates in Colombia, Mexico, Peru, Venezuela, Chile, Panama, Argentina and Ecuador, with 225 million addressable customers.

Source: Kinnevik Rocket Capital Markets Day, May 2014

In 2014, we expect Linio to grow revenues 80% year-over-year to EUR 86 million and produce EBITDA losses of EUR -73 million at EBITDA margin of -85%. Based on the last financing round in July 2014, Linio is currently valued at $326 million, a sales multiple of 2.9x.

Competitive position Among B2C e-commerce companies in Latin America ex-Brazil, Linio is the market leader for website visits, getting 54% of traffic market share and 2 times the visits of #2 Netshoes. When offline retailers’ websites are included in the traffic comparisons, Linio remains the leader with 23% traffic market share.

Linio website visits vs. B2C competitors, 2014 March

Source: Kinnevik Rocket Capital Markets Day, May 2014

Linio’s popularity is approaching the traffic levels of MercadoLibre, the online C2C leader in Latin America.

Similarweb country rank Linio MercadoLibre Netshoes Falabella Colombia 20 10 48 Mexico 24 8 467 Peru 27 13 51 Venezuela 276 6 Chile 78 13 Panama 27 289 Brazil 32 Source: Similarweb, 2015 February

By avoiding Brazil and focusing on less competitive and penetrated markets, we believe Linio has a good chance at becoming the #1 B2C and marketplace e-commerce retailer in its countries of operation.

Valuation Growing an online B2C e-commerce company into a market leader requires 5-8 years of EBITDA losses and hundreds of millions of invested capital. Even for the most successful precedents, positive operating margins usually are not achieved until a company reaches $1 billion in revenues. For example, Amazon required 7 years and $2 billion dollars of financing before achieving positive operating margin of 1.6% on $3.9 billion in sales in 2002.

Linio, generating only EUR 86 million revenue in 2014 while spending higher amounts on marketing, logistics, and pricing, will likely generate losses until 2019. Based on our financial projection, we estimate the company will require an additional EUR 362 million in financing to get to that point, significantly diluting existing investors.

Because EBITDA is negative, we use a sales ratio of 2.0x to value Linio. In 2017, we estimate fair value of USD $809 million, with Kinnevik’s post-dilution ownership of 6.7% worth $55 million.

Linio financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Active Customers (000s) 38 320 704 1,408 2,534 4,055 6,083 8,516 % growth 742% 120% 100% 80% 60% 50% 40% Revenue/customer (€) 171 150 122 104 93 87 81 81 % growth -12% -18% -15% -11% -6% -7% 0% Revenue 7 48 86 147 235 352 492 689 % growth 637% 80% 70% 60% 50% 40% 40%

EBITDA -15 -34 -73 -110 -117 -106 -49 -34 EBITDA Margin -223% -71% -85% -75% -50% -30% -10% -5% Cash (Deficit) 4 21 55 -55 -173 -278 -327 -362 Valuation ($ mm) $326 $809

2017 Revenue Multiple 2.0x Exchange Rate (EUR-USD) 1.15

2017 Linio Valuation ($ mm) $809 KINV % interest 9.4% KINV % interest post-dilution 6.7% 2017 KINV interest value ($ mm) $55 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Customer metrics for Linio support a high double digit growth rate forecast, as 2014 T9M orders were up 140% and active customers were up 164%.

Linio customer data, 2014 T9M vs. 2013 T9M (000s, except GMV) 2013 T9M 2014 T9M Total Customers 220 730 % growth 232% Total Orders 316 759 % growth 140% Active Customers 220 580 % growth 164% GMV (€ mm) 31 57 % growth 85% Source: Rocket Internet data

The range of sales multiples for e-commerce peers is wide, ranging from 0.6x EV/Sales for the larger Brazil-based online retailers B2W Digital and Cnova, to over 5.0x EV/Sales for Linio sister companies Lazada and Jumia.

Latin America online retailer comparison Market 2014 % YOY 2014 EBITDA EV/S EV/EBITDA Active Revenue / ($ mm) Cap Revenue Growth EBITDA Margin Customers Customer B2W Digital 1,956 3,335 31% 237 7% 0.6x 8.2x n/a n/a Cnova 2,827 3,995 20% 75 2% 0.6x 29.6x 13.6 $294 Lazada 1,150 204 175% -163 -80% 5.6x n/m 2.5 $81 Jumia 512 76 100% -81 -106% 6.7x n/m 0.39 $194 MercadoLibre 5,450 579 22% 183 32% 9.4x 29.8x 114.0 $5 Average (ex-MELI) 81% -44% 3.4x 18.9x

Linio 326 113 80% -96 -85% 2.9x n/m 0.70 $160 Source: Company data, Deerwood Estimates *Estimated figures if official financials unavailable *Active customers in millions, Revenue/Customer in $

With more established comps Amazon and B2W Digital trading at 0.9-1.9x sales, and younger, faster growing peers issuing equity at 5.9-6.7x sales, we think a 2.0x sales multiple for our 2017 Linio valuation estimate is reasonable, given the forecast of high double digit revenue growth.

Management and Ownership Structure Andreas Mjelde, CEO. Previous experience with McKinsey & Company and 3i.

Luca Ranaldi, Chief Commercial Officer. Previous experience with McKinsey & Company and Ferrari.

Linio ownership structure

Rocket Internet 35% 35% Access Industries Kinnevik Summit Partners

6% Others 9% 15%

Source: Rocket Internet, Kinnevik data, news articles

Timeline 2012 Linio founded as a B2C general merchandise online retailer.

2013 Raised $95 million from Tengelmann, Santo Domingo Group, Latin Idea, JPMorgan, and Kinnevik. 2013 Began offering marketplace and C2C services in June. 2014 Raised $79 million from Northgate Capital, Access Industries. Valued at $298 million in July. 2014 Expanded operations to Chile, Panama and Ecuador. Source: Kinnevik, Rocket Internet data

Jumia and Konga

Overview In this section, we combine our analyses of Jumia and Konga because they are virtually identical companies competing to build the leading B2C online retailer and marketplace in Nigeria and greater Africa.

Jumia, founded in 2012, is backed by the Rocket Internet sphere of investors, including Kinnevik. In 2014 we forecast Jumia to grow revenues 100% year-over-year to EUR 58 million and produce EBITDA loss of EUR -62 million, at an EBITDA margin of -106%. Based on the latest funding round in November 2014, Jumia is valued at USD $543 million, at a sales multiple of 7.2x.

Source: Kinnevik Rocket Capital Markets Day, May 2014

Konga, also founded in 2012, is backed by Kinnevik and Naspers. Although no official financial data has been released yet, the company has stated that Konga’s 2014 Black Friday (Yakata) sales were USD $3.5 million in a single day, which CEO Sim Shagaya implied could be equal to an entire month’s worth of revenue. Based on this data point, we estimate Konga’s 2014 sales to be USD $30 million, with an EBITDA loss of -$32 million at -106% EBITDA margin (assuming the same EBITDA margin as Jumia). Based on the latest financing transaction as of 2014 4Q, Konga is valued at USD $92M, a sales multiple of 3.1x. Currently, Konga only operates in Nigeria, but may expand to other countries in Africa just as Jumia has done.

Source: Konga.com website, 2014 March

Competitive Position As Jumia and Konga fight fiercely for market share, we believe that only one company will eventually emerge victorious as the #1 e-commerce retailer in Africa. The space has already claimed casualties of lesser-capitalized, smaller e-commerce retailers, as Kalahari.com.ng, Mocality.com.ng (both backed by Naspers), Sunglass.com, and Glamour.com have shut down.

Although Jumia is currently in the lead, with twice the revenue of Konga in 2014, it is still too early to pick a winner, as both companies are financed by deep-pocketed, committed, and experienced investors. Jumia has cumulatively raised USD $200 million, and Konga has cumulatively raised USD $38 million. Both companies will likely be cash flow negative for 5 years or longer as they build up scale, and will require hundreds of millions more of capital to get to breakeven EBITDA.

The competitive dynamics leaves Kinnevik in the awkward position of owning significant stakes in both Jumia (9.6%) and Konga (41%) while contributing capital to both companies, but knowing that half of the total investment will likely be lost in the end. Unless Jumia and Konga merge, which would be the most efficient and beneficial solution for all parties, backers of Jumia and Konga are in aggregate allocating capital sub-optimally as the two companies invest heavily into duplicative marketing, logistics, and promotions.

Based on social media metrics, online reviews and discussion boards, both Jumia and Konga’s brands are well regarded in Nigeria (aside from normal complaints about shipping and customer service). As of February 2015, Jumia’s Facebook page had 1.20 million “likes” and 60,965 visits, and Konga’s Facebook page had 1.25 million “likes” and 5,344 visits.

Website traffic data from Similarweb shows that Konga and Jumia are ranked very closely with high traffic ranks in Nigeria, beating out smaller competitors by a wide margin. Jumia has high ranks in a number of other African countries as well.

Similarweb country rank Jumia Konga Dealdey SmartBuy Taafoo Kamdora WebMallNG Nigeria 11 7 40 2,575 410 1,537 10,184 Ivory Coast 13 Kenya 18 Egypt 48 Uganda 56 Morocco 58 Cameroon 63 Tanzania 269 Ghana 367 Source: Similarweb, 2015 February

Jumia Valuation The most recent financing round for Jumia was in November 2014, when Rocket Internet and other investors contributed a total of EUR 120 million at an EUR 445 million valuation, or 7.2x sales multiple. In February 2014, the previous financing round valued Jumia at EUR 212 million, which implies that the company's value is growing at a rate of more than 100% per year.

Customer data for the first six months of 2014 corroborate a growth rate over 100%, as transactions were up 149% and active customers up 130%.

Jumia customer data, 2014 1H vs. 2013 1H (000s, except GMV) 2013 1H 2014 1H Total Customers 123 361 % growth 193% Transactions 172 429 % growth 149% Active Customers 119 274 % growth 130% GMV (€ mm) 13 27 % growth 108% Source: Rocket Internet

Our financial projection for Jumia assumes that the company will continue to grow at high double digits until it reaches revenue of EUR 809 million in 2019, at which point it will be at -5% EBITDA margin. We estimate Jumia will require at least EUR 192 million in additional financing to get to that point.

Jumia financial projection (EUR mm, except per customer) 2012 2013 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Active Customers (000s) 50 195 390 741 1,334 2,267 3,628 5,442 % growth 290% 100% 90% 80% 70% 60% 50% Revenue/customer (€) 149 149 149 149 149 149 149 % growth 0% 0% 0% 0% 0% 0% Revenue 29 58 110 198 337 540 809 % growth 100% 90% 80% 70% 60% 50%

EBITDA -34 -62 -72 -60 -67 -54 -40 EBITDA Margin -116% -106% -65% -30% -20% -10% -5% Cash (Deficit) 11 101 29 -31 -98 -152 -192 Valuation ($ mm) $543 $776

2017 Revenue Multiple 2.0x Exchange Rate (EUR-USD) 1.15

2017 Jumia Valuation ($ mm) $776 KINV % interest 9.7% KINV % interest post-dilution 8.5% 2017 KINV interest value ($ mm) $66 Source: Kinnevik, Rocket Internet data, Deerwood estimates

Our choice of 2.0x revenue multiple, which is equivalent to Amazon’s current valuation, is likely conservative, given that Flipkart and Souq have completed recent financing rounds at an estimated 5.0- 7.0x revenues.

Konga Valuation Our Konga valuation model is subject to higher uncertainty compared to Jumia, as no official financial or operating metrics have been released. The starting point for our financial projection is an estimated USD $30 million revenue in 2014, and is derived from the single data point of $3.5 million USD sales on Black Friday (Yakata), which was hinted to be equivalent to an entire month’s worth of sales. Assuming monthly revenue of $1.5 million USD in 2014 January and increasing sales month-over-month by +6% (equivalent to growth of 100% per year), we estimate Konga’s 2014 revenue to be USD $30 million.

Konga financial projection ($ mm) 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Revenue 30 57 103 174 279 419 % growth 100% 90% 80% 70% 60% 50% EBITDA -32 -54 -72 -113 -56 -42 EBITDA Margin -106% -95% -70% -65% -20% -10% Cash (Deficit) 25 -18 -74 -135 -191 -233 Valuation ($ mm) $92 $349 Source: Kinnevik, Rocket Internet, Deerwood estimates

2017 Revenue Multiple 2.0x

2017 Konga Valuation ($ mm) $349 KINV % interest 41.0% KINV % interest post-dilution 29.5% 2017 KINV interest value ($ mm) $103 Source: Forbes news article, @ShopKonga twitter, Deerwood estimates

For Konga’s EBITDA margin forecast, we used the same growth rate assumptions for Konga as Jumia, and forecast EBITDA losses until it reaches $1 billion in sales, possibly in 2022. We estimate Konga needs at least USD $233 million in additional financing to reach revenue of $419 million in 2019.

Using the same sales multiple of 2.0x as we did for Jumia’s valuation, we forecast Konga value of $349 million in 2017.

Peer Comparisons There are no publicly traded general B2C e-commerce companies in Africa, so for comparison we use a mix of established online retailers Amazon and JD.com (China), and private emerging market B2C online retailers Flipkart (India) and Souq (Middle East).

Africa and Asia B2C online retailer comparison Market 2014 % YOY 2014 EBITDA EV/S EV/EBITDA Active Revenue / ($ mm) Cap Revenue Growth EBITDA Margin Customers Customer Amazon 174,363 88,988 20% 6,421 7% 1.9x 25.7x 270 $330 JD.com 36,600 18,000 57% 800 4% 1.7x 38.4x 46 $391 Flipkart 11,000 2,200 120% n/a n/a 5.0x n/a n/a n/a Souq 700 100 90% n/a n/a 7.0x n/a n/a n/a Average 72% 6% 3.9x 32.1x $360

Jumia 543 76 100% -81 -106% 7.2x n/m 0.39 $194 Konga 92 30 100% -32 -106% 3.1x n/m n/a n/a Source: Company filings, Deerwood estimates *Estimated figures if official financials unavailable Active customers in millions, Revenue/Customer in $

Souq.com is the closest peer to Jumia and Konga, given its rumored revenue of $100 million and high double digit revenue growth. Given its recent financing round at approximately 7.0x sales multiple, a 2.0x multiple for Jumia and Konga in 2017 seems reasonable.

Jumia Management and Ownership Structure Jumia was originally co-founded in 2012 by Tunde Kehinde and Raphael Afeador, under the name Kasuwa, with seed money from Rocket Internet. After merging with another Rocket start-up, Sabunta, and changing the name to Jumia, Tunde and Raphael eventually were replaced by new Rocket-chosen management in January 2014. Current management of Jumia is led by the Co-CEOs of African Internet Holding, Sacha Poigonnec and Jeremy Hodara, both formerly with McKinsey, and the CEO of Jumia is Gregoire de Tilly, formerly with Bain & Company, Spartoo.com and ESCP Europe.

Jumia ownership structure 2% 1% Rocket Internet 7% Chelsea Wharf 10% 27% Holding Millicom 17% MTN Group 20% 17% Kinnevik

Source: Kinnevik, Rocket Internet data

Konga Management and Ownership Structure The CEO and founder of Konga is Sim Shagaya, Nigerian-born serial entrepreneur with experience founding and running tech companies in Africa. Prior to Konga, he founded Nigerian flash-sales site DealDey (also backed by Kinnevik), and an African outdoor advertising company, E-motion. Before becoming an entrepreneur, Mr. Shagaya was head of Google Africa, worked at Rand Merchant investment bank, and received an MBA at Harvard Business School.

Shola Adeko, CFO. Previous experience with Etisalat Nigeria.

Olatokunbo Fagbamigbe, CIO, formerly with Google.

Konga ownership structure

26% 41% Kinnevik Naspers Others

33%

Source: Kinnevik data

Jumia Timeline 2012 Jumia founded in June under the name Kasuwa, merged with Sabunta, and became Jumia. 2013 Raised $51 million USD from Summit Partners and Africa Internet Holdings, valued at 212 million EUR. 2014 In January the original founders left the company and Rocket appointed new management. 2014 Raised 120 million EUR at a 445 million EUR valuation in November. Source: Rocket Internet, Kinnevik data

Konga Timeline 2012 Konga founded by Sim Shagaya with $3.5 million USD capital from KINV in July. 2013 Naspers invested in a $10 million USD round for a 50% stake in March. 2014 Raised $25 million USD in a Series B round in January. 2014 As of 2014 4Q, Konga is valued at USD $92 million based on Kinnevik's fair value mark. Source: Kinnevik data

Avito

Overview Avito, launched in 2007, operates the #1 Russian online classifieds site with 59 million unique monthly visitors and 5.6 billion monthly page views. The site spans five verticals - Auto, Real Estate, Jobs, Services and General. Since inception, millions of Russian individuals and businesses have used the site to buy and sell goods and services. Avito also operates classifieds sites in Ukraine, Egypt and Morocco.

Source: Vostok Nafta Presentation, September 2014

In 2014 we expect Avito to grow revenues 84% year-over-year to RUB 4.4 billion (USD $107 million), and produce positive cash flow at a 60% EBITDA margin. Avito is currently valued at USD $957 million, or a LTM EBITDA multiple of 24.0x, based on Kinnevik's 2014 4Q fair value estimate of SEK 2.3 billion for its 31% interest.

Russian E-commerce and Online Advertising Markets The e-commerce and online advertising markets in Russia have significant growth potential in the coming years. Russia is Europe’s largest internet population with 82 million, but still has relatively low internet penetration of 57% (vs. 84% in the US). E-commerce penetration in Russia is even lower at 3.2%, compared to 8% in developed countries.

Russian e-commerce retailers are faced with several unique challenges. As the world’s largest country by total area, the Russian logistics infrastructure is underdeveloped with inefficient providers. Online retailers not only have to solve the issue by building their own delivery systems, but figure out ways to cope with low credit card penetration, strong preference for cash on delivery payment, and fragmented markets. However, Avito’s future growth potential is essentially immune to these challenges because it serves as a marketplace for users to exchange information online and transact offline.

Russia’s online advertising market is forecasted to grow at a CAGR of 20% from 2013-2017 to USD $5 billion per year from $2.4 billion in 2013. Plenty of monetization opportunities exist for Avito, the largest online classifieds operator, to take advantage of the higher ad spend.

Source: Vostok Nafta Presentation, September 2014

The primary drivers of Avito's revenue growth, number of unique monthly visitors and revenue per unique monthly visitor, will benefit from these tailwinds.

Competitive Position Avito is the clear leader for Russian online classifieds in all key verticals, and as a result possesses a wide economic moat. The company’s monthly average users (MAU) and page views are 2.7x and 5.2x higher than the next largest competitors.

Source: Vostok Nafta Presentation, 2014 September

After the 2013 merger between Avito and Slando.ru/OLX, we do not see any challenger to Avito’s dominance in general classifieds, although specialty vertical classifieds could take share in specific categories. Avito has prepared for this by starting a separately branded real estate site, Domofond.ru.

Valuation Online classifieds is a winner-takes-all industry due to strong network effects. Within a given geographical area, the classifieds site with the most buyers and sellers (liquidity) offers the most value to users, attracting additional buyers and sellers, which creates even more value for users. This positive feedback loop ensures that the largest classifieds site becomes a natural monopoly over time.

We believe that Avito still has significant growth potential over the next 3-5 years. Key metrics, including unique monthly visitors (a 132% compound annual growth rate over the past five years), number of listed items (74% CAGR), and total revenue (248% CAGR), significantly outpaced global and Russian e- commerce trends, suggesting that Avito is gaining share while fortifying its network effects advantage. Based on Avito’s strong market position in Russia and untapped monetization of its site, we expect revenues to grow in the high double digits from 2015-2017, well above the expected 20% growth rate for the Russian online ad market in the next few years.

We estimate fair value for Avito in 2017 to be USD $3.3 billion, based on an EV/EBITDA multiple of 18.0x, and forecast Kinnevik’s stake in Avito to be worth over $1 billion in 2017.

Avito financial projection (RUB mm, except per customer) 2010 2011 2012 2013 2014 E 2015 E 2016 E 2017 E Unqiue Monthly Visitors (millions) 15.0 18.3 30.0 45.6 59.0 73.8 92.2 115.2 % growth 22% 64% 52% 29% 25% 25% 25% Revenue/UMV (RUB) 2 17 31 53 75 90 109 130 % growth 746% 77% 71% 43% 20% 20% 20% Revenue 31 320 926 2,411 4,448 6,672 10,009 15,013 % growth 932% 189% 160% 84% 50% 50% 50%

EBITDA -1 685 2,672 4,137 6,606 10,509 EBITDA Margin 0% 28% 60% 62% 66% 70% Cash ($ mm) 100 150 212 310 467 Valuation ($ mm) $957 $3,290

2017 EV/EBITDA Multiple 18.0x Implied EV/Sales Multiple 12.6x Exchange Rate (USD/RUB) 67.00 2017 Avito EV ($ mm) $2,823 + net cash $467 2017 Avito Equity Value ($ mm) $3,290

KINV % interest 31% 2017 KINV interest value ($ mm) $1,033 Source: Kinnevik, Vostok Nafta data, Deerwood estimates

In 2014 3Q Avito generated a record 65% EBITDA margin, up from 48% in 2013 3Q. We forecast 70% EBITDA margin by 2017, driven by Avito’s further increase in monetization rates from a low base of USD $1.37 annual revenue per UMV. In comparison, mature online classifieds sites in developed countries produce annual revenue per UMV between $8-70.

Source: Vostok Nafta Presentation, 2014 September

Avito's goal is to become the Russian version of Craigslist, Rightmove, Monster.com and Autotrader all at once. Management is focused on verticalisation by adding more tailored products and advertising solutions targeted towards auto dealers, real estate agents, HR recruiters and other professional users who are willing to pay a premium for better exposure. Based on the strength of Avito’s network effects, we are optimistic that these initiatives will drive improving monetization, revenue growth and margin expansion.

Online classifieds comparison Enterprise LTM EBITDA EV/S EV/EBITDA UMV Revenue/ ($ mm) Value Revenue Margin UMV 58.com 2,750 230 11% 12.0x n/m 200 $1.2 Bitauto 2,270 313 24% 7.3x 29.6x n/a n/a Autohome 3,730 283 45% 13.2x 29.6x n/a n/a Schibsted Established Classifieds 4,775 476 55% 10.0x 18.3x 29 $16.7 Finn.no 190 45% 4 $54.2 Blocket/Bytbil.se 115 52% 5 $23.0 Leboncoin.fr 171 68% 20 $8.6 RightMove 4,476 256 74% 17.5x 23.8x 90 $2.8 Trade Me Group 1,147 141 65% 8.2x 12.6x 2 $70.3 Craigslist n/a 81 n/a n/a n/a 52 $1.6 Quikr 343 50 n/a 6.9x n/a 32 $1.6 Saltside Technologies 113 n/a n/a n/a n/a 6 n/a Average 49% 10.7x 22.8x

Avito 957 107 60% 9.0x 14.9x 59 $1.8 Source: Bloomberg, Morningstar, Yahoo, Company Filings, Deerwood Estimates *Unique monthly visitors (UMV) in millions, Revenue/UMV in $

With public comparables trading at a range of 13x – 30x LTM EBITDA, we think that a 18x EBITDA multiple in 2017 is warranted for Avito given its high margin, market leadership position and growth prospects for the Russian online ad market.

Management and Ownership Structure Co-founders Filip Engelbert and Jonas Nordlander hold a collective 13% stake in Avito. Engelbert, the Group CEO, has extensive experience in investment banking and online entrepreneurship in emerging markets. Jonas Nordlander, CEO of Avito Russia, co-founded Tradera and sold the company to eBay Sweden in 2006 for $65 million. Thereafter, he filled the position of COO with eBay Sweden until 2007.

It’s worth noting that Jonas Nordlander mentioned in a recent interview with TheStreet that Avito has “prepared the company for a US listing” in terms of compliance and reporting requirements, and that it will be a good way to “get liquidity” for its diverse group of shareholders with different agendas.

Avito ownership structure

Kinnevik

23% Naspers 31%

Vostok Nafta

13% Jonas Nordlander and co- founder Filip Engelbert

19% 14% Northzone Ventures, Baring Vostok, Accel Partners and Others

Source: Kinnevik, Naspers, Vostok Nafta data, news articles

Timeline 1996 Kontakt East Holding AB founded. 2006 Kontakt East IPO on First North exchange. Kinnevik acquired 18% for SEK 34 million. 2007 Kontakt East launched Avito site. Kinnevik invested an additional SEK 35 million. 2008 Kinnevik and Vostok Nafta took Kontakt East private at a price of SEK 35 per share. 2009 Kinnevik invested SEK 28 million in Avito. 2010 Kinnevik invested SEK 153 million in Avito Holding AB and Vosvik AB. 2011 Kinnevik invested SEK 62 million in Avito. 2012 Avito raised USD 75 million from private equity firm Baring Vostok, Accel Partners, Kinnevik (invested SEK 50 million) and Northzone. 2013 Avito merged with Slando.ru and OLX.ru. In the transaction, Naspers contributed its classifieds sites and USD $50 million to receive a 18.6% stake in Avito. 2014 Kinnevik increased its stake in Avito from 30.8% to 31.7% (fully diluted) by exercising its pre- emption right to acquire its share of warrants being offered for sale by the founders of Avito. Including the subscription price for the warrants, Kinnevik’s investment amounted to approximately SEK 110 million. Avito was valued at USD $957 million in 4Q. Source: Kinnevik, Vostok Nafta data

Quikr

Overview Quikr is a leading general online classifieds site in India with 32 million unique monthly visitors and more than 450 million monthly page views. Individuals and businesses access Quikr to sell, buy, rent or find products and services in a variety of categories such as electronics, cars, bikes, real estate, services, jobs, education and entertainment.

In 2014 we estimate Quikr will generate over INR 3 billion (USD $50 million) in revenue, up 54% year- over-year, and be profitable on an EBITDA basis. Quikr is currently valued at USD $343 million based on Kinnevik's 2014 4Q fair value mark of SEK 425 million for its 16% interest.

Competitive Position There is an intense battle between Quikr and OLX India (owned by Naspers) to become the market leader. Quikr and OLX have co-existed in India since 2008, and have experienced tremendous growth. Both companies have raised sizable equity investments from multiple funding rounds and spent aggressively on television campaigns that made them well known in India. As illustrated in the chart below, Quikr enjoys a slightly stronger presence with double the amount of unique visitors of OLX. However, other metrics based on website traffic suggest that neither company has a dominant position.

Quikr OLX India Year Launched 2008 2006 Monthly Unique Visitors (mm) 32 16 Monthly Page Views (mm) 450 1,500 Number of Listings (mm) 10 10 Facebook Likes (mm( 2 6 # of Indian Cities Available 940 500 Alexa Traffic Rank in India 17 34 SimilarWeb Traffic Rank in India 45 42 Source: Kinnevik, Naspers data, news articles

Sellers would most likely post to both websites simultaneously to get maximum exposure. Buyers will also browse both websites to find the best deal. It appears no natural monopoly yet exists in the Indian online classifieds market to take advantage of strong network effects. We expect Quikr and OLX India to both continue growing rapidly until they decide to address the serious threat posed by each other. A merger of Quikr and OLX would probably be the best outcome for KINV and Naspers shareholders, as demonstrated by the success of Avito after it merged with Slando/OLX in 2013.

Valuation We believe Quikr is well-suited to take advantage of the tremendous growth opportunity In India for e- commerce and online advertising. According to a recent Edelweiss research report, the size of India’s online classified industry is expected to grow to INR 31 billion by 2016, a CAGR of 41% from INR 11 billion today. Based on Quikr’s leading market position and significant untapped monetization, we expect revenues to grow in the double digits.

Quikr financial projection (INR mm, except per customer) 2014 E 2015 E 2016 E 2017 E Unqiue Monthly Visitors (millions) 32.0 44.8 62.7 87.8 % growth N/A 40% 40% 40% Revenue/UMV (INR) 96 106 117 128 % growth 10% 10% 10% Revenue (INR mm) 3,088 4,755 7,322 11,276 % growth N/A 54% 54% 54%

EBITDA 154 951 2,197 4,511 EBITDA Margin 5% 20% 30% 40% Valuation ($ mm) $343 $1,461

2017 Revenue Multiple 8.0x Implied EBITDA Multiple 20.0x Exchange Rate (USD-INR) 61.75

2017 Quikr Valuation ($ mm) $1,461 KINV Ownership % 16% 2017 KINV interest value ($ mm) $234 Source: Kinnevik data, Deerwood estimates

Quikr is focused on monetization as it grows users, page views and traffic. It receives revenue from tapping small businesses to advertise on the site, and about 70-80% of its revenues come from jobs, real estate and cars. This strategy does not seem to have hindered its market position. The CEO, Pranay Chulet, mentioned in a 2014 interview that “Quikr is now not making losses”. We estimate an EBITDA margin of 5% for 2014 and forecast EBITDA margin expanding towards 40% by 2017.

Online classifieds comparison Enterprise LTM EBITDA EV/S EV/EBITDA UMV Revenue/ ($ mm) Value Revenue Margin UMV RightMove 4,476 256 74% 17.5x 23.8x 90 $2.8 Autohome 3,730 283 45% 13.2x 29.6x n/a n/a 58.com 2,750 230 11% 12.0x n/m 200 $1.2 Avito 957 107 49% 9.0x 24.0x 59 $1.8 Schibsted Established Classifieds 4,775 476 55% 10.0x 18.3x 29 $16.7 Finn.no 190 45% 4 $54.2 Blocket/Bytbil.se 115 52% 5 $23.0 Leboncoin.fr 171 68% 20 $8.6 Trade Me Group 1,147 141 65% 8.2x 12.6x 2 $70.3 Bitauto 2,270 313 24% 7.3x 29.6x n/a n/a Craigslist n/a 81 n/a n/a n/a 52 $1.6 Saltside Technologies 113 n/a n/a n/a n/a 6 n/a Average 49% 11.0x 23.0x

Quikr 343 50 n/a 6.9x n/a 32 $1.6 Source: Bloomberg, Morningstar, Yahoo, Company Filings, Deerwood estimates *Unique Monthly Visitors (UMV) in millions, Revenue/UMV in $

Quikr only recently achieved profitability in 2014. We valued Quikr based on a sales multiple given the uncertainty associated with the expected margin expansion because of intense competition. With public comparables trading at a range of 7x – 15x LTM sales, we think that a 8x sales multiple is reasonable for Quikr, given its market leadership position and growth prospects. We forecast Kinnevik’s stake in Quikr to be worth $234 million in 2017.

Management and Ownership Structure Pranay Chulet is the founder of Quikr and has been its Chief Executive Officer since July 2009. Mr. Chulet grew up in India and worked in Brand Management at P&G India. He then moved to New York working as a management consultant in the Media Practice at Booz Allen, and later founded Zobyx, a new media start up. He is a graduate of IIT Delhi and IIM Calcutta.

Ownership Kinnevik 16.0% Matrix Partners n/a Nokia Growth Partners n/a Norwest Venture Partners n/a Tiger Global Management n/a Omidyar Network n/a Warburg Pincus n/a eBay Inc. n/a Source: Kinnevik data, news articles

Timeline 2005 Kijiji, a subsidiary of eBay, was launched in March. 2008 Kijiji re-branded into Quikr.com and received the first round of outside funding from Matrix Partners and eBay in February 2008. 2014 In March, Kinnevik invested SEK 254 million (USD $39 million) in the context of a total raise of $90 million. The raise included participation from Quikr’s principal current investors. 2014 During Q3, Kinnevik invested an additional USD $15 million in Quikr in the context of a total raise of $60 million. Tiger Global also participated in the offering. Source: Kinnevik data, news articles

Saltside

Overview Saltside Technologies, founded in 2011 with Kinnevik as primary sponsor, operates the leading online general classifieds sites in Bangladesh (Bikroy.com), Ghana (Tonaton.com), and Sri Lanka (Iklan.lk). The total covered population of the three sites is 200 million.

Source: Bikroy.com website, 2014 March

In January 2015 the company raised USD $40 million from Hillhouse Capital, Brummer & Partners, and Kinnevik, at an implied post-money valuation of $112 million. Prior to the financing round, the company was valued at $23 million, based on Kinnevik’s fair value mark in 2014 4Q.

Kinnevik has not released official financials or operating data about Saltside for competitive reasons, so our estimates are subject to higher uncertainty compared to Avito.ru and Quikr.

Competitive Position In its three countries of operation, Saltside competes with global classifieds companies OLX, Schibsted/Telenor (Ekhanei.com), and local site topjobs.lk.

Online classifieds traffic comparison Bangladesh Ghana Bikroy.com Ekhanei.com OLX Bangladesh Tonaton.com OLX.com.gh Year Launched 2012 2006 2014 2013 N/A Monthly Page Views (mm) 1.5 0.7 0.5 0.8 0.3 Facebook Likes (000s) 2,126 2,406 666 170,351 3 Alexa Traffic Rank 23 70 109 20 72 SimilarWeb Traffic Rank 17 42 75 15 39

Sri Lanka Ikman.lk topjobs.lk Year Launched 2012 N/A Monthly Page Views (mm) 2.35 0.9 Facebook Likes (000s) 425 34 Alexa Traffic Rank 8 25 SimilarWeb Traffic Rank 6 46 Source: Similarweb, Alexa, Facebook, 2015 February

As of February 2015, Saltside’s sites have significantly higher monthly page views and traffic ranks than the #2 classifieds sites in each country. However, competition has become much tougher in Bangladesh after the merger of Ekhanei and OLX Bangladesh in early 2015. Even though Topjobs.lk is a jobs site, we included it for comparison because no other general classifieds site exists in Sri Lanka besides Ikman.lk.

Saltside and its competitors have already started to monetize traffic. In Bangladesh, Ghana, and Sri Lanka, Saltside sells both display advertising and sponsored listings. Ekhanei and OLX Ghana also sell display advertising, but do not sell sponsored listings yet. Topjobs.lk sells both advertising and sponsored listings.

In general the most popular classifieds site in a country will over time increase its lead on smaller sites due to network effects. If Saltside can maintain its size and traffic advantages going forward, we would expect its value to continue to grow rapidly with higher traffic, monetization, and revenue per visitor.

Valuation Our 2017 valuation estimate for Saltside is based on the latest financing round’s implied valuation of $112 million, and increase the valuation by 40% per year until 2017. Without officially released financial data or operating metrics, this projection is subject to a high degree of uncertainty.

Saltside financial projection ($ mm) 2014 2015 Jan 2015 E 2016 E 2017 E Valuation 23 112 157 219 307 % growth 395% 40% 40% 40% Source: Kinnevik data, Deerwood estimates *Jan 2015 valuation estimate derived from $40 million financing round with Hillhouse Capital & Brummer & Partners

However, we believe the 40% CAGR in Saltside’s valuation from 2015-2017 is very achievable, based on two data points. The first data point is the 427% growth in value from 2014-2015, implying the operating metrics of Saltside are growing much faster than 40%. The second data point is the 45% CAGR in unique monthly visitors of Avito.ru from 15 million to 45.6 million during 2011-2013.

As Saltside is starting from a smaller base than Avito, with an estimated 6 million visitors a month in 2015, it should grow even faster than Avito from its current point. Furthermore, Kinnevik will also be able to apply the lessons learned from Avito and Quikr to Saltside, and keep the lines of communication open with Naspers for potential merger synergies.

Management and Ownership Nils Hammar, CEO. Previous experience with Kindo.com (social network), and was one of the first employees at Skype.

James Peck, Chief Strategy Officer. Previously at Naspers in Hong Kong with classifieds, payment and ecommerce investments, Amazon, and Robert W. Baird.

Hakan Malm, Chief Operating Officer. Previously founder of Duego, Brazil’s largest mobile data site, Withing Bank, and Kinnevik Online Ventures.

Saltside ownership structure

8% Kinnevik

31% Hillhouse & Brummer 61% Others

Source: Kinnevik press release, Deerwood estimates

Timeline 2011 Saltside founded in Gothenburg, Sweden. 2013 Raised USD $10 million from Kinnevik. 2014 Raised additional $10 million from Kinnevik. Valuation at $21 million. 2015 In January raised $40 million from Hillhouse Capital, Brummer & Partners, and Kinnevik, at an estimated valuation at $112 million. Source: Kinnevik data, news articles

Wimdu

Overview Wimdu, founded in 2011 in Berlin, operates a global online marketplace for short term rentals and private accommodations connecting travelers with hosts, and is very similar to Airbnb.

Source: Wimdu website, 2015 February

In 2014, we estimate Wimdu had 1.6 million booked room-nights and generated EUR 17 million in revenue. As of 2014 4Q, Wimdu is valued by Kinnevik at USD $170 million, a revenue multiple of 7.6x.

Rocket Internet’s last release of operating statistics is as of 2014 2Q, but revenue data for Wimdu has not been released since 2013 3Q.

Competitive Position Wimdu competes against much larger established sites Airbnb and HomeAway.

Short-term rental online marketplaces comparison Year Number of Listings Enterprise 2014 EBITDA EV/Revenue EV/EBITDA ($ in mm) Launched (000s) Value Revenue Margin Airbnb 2007 1,000 10,000 500 N/A 20.0x N/A HomeAway 2005 1,043 2,300 447 15% 5.1x 35.2x Wimdu 2010 300 170 22 N/A 7.6x N/A Source: Bloomberg, Morningstar, Yahoo, Company data, news articles, Deerwood estimates

Even though Wimdu’s number of listings is comparable at 300,000 vs. 1 million for Airbnb and HomeAway, its 2014 estimated room-nights booked at 1.6 million is far smaller than Airbnb’s estimated 37 million room-nights booked.

Global network effects are not working in Wimdu’s favor, given its smaller size, but a strategy of focusing on building a critical mass of European listings may be successful.

Valuation Our 2017 valuation model for Wimdu assumes moderation of annual growth in room-nights booked and 5% growth per year in revenue per customer night.

Wimdu financial projection (EUR mm, nights in mm) 2012 2013 E 2014 E 2015 E 2016 E 2017 E Number of room-nights (mm) 0.8 1.2 1.6 2.0 2.4 2.8 % growth 43% 36% 25% 20% 15% Number of customer nights 2.4 3.6 4.8 6.1 7.3 8.4 % growth 52% 35% 25% 20% 15% Revenue/Customer Night (€) 2.8 3.3 3.5 3.7 3.9 4.0 % growth 19% 5% 5% 5% 5% Revenue (€ mm) 7 12 17 22 28 34 % growth 80% 41% 31% 26% 21% Valuation ($ mm) $170 $312

2017 Revenue Multiple 8.0x Exchange Rate (EUR-USD) 1.15

2017 Wimdu Valuation ($ mm) $312 KINV % interest 29% 2017 KINV interest value ($ mm) $90 Source: Rocket Internet IPO prospectus, Kinnevik data, Deerwood estimates

The revenue multiple of 8.0x in 2017 is the same revenue multiple implied by its valuation in 2014, and is between Airbnb’s revenue multiple of 20.0x and HomeAway’s of 5.1x.

Management and Ownership Structure Arne Bleckwenn, Co-Founder and Managing Director. Previous experience with Matrix Internet (co- founder), inGame (co-founder), McKinsey & Company, and Jamba!

Hinrich Dreiling, Co-Founder. Previous experience with GratisPay (co-founder), Matrix Internet (co- founder), and Bain & Company.

Wimdu ownership structure

34% Rocket Internet 47% Kinnevik Others

19%

Source: Rocket Internet, Kinnevik data

Timeline 2011 Wimdu launched in Berlin, and raises capital from Rocket Internet ($23 million) and Kinnevik ($50 million). 2012 Launched similar Chinese website called Airizu. 2013 Airizu brand shut down, website now redirects to Wimdu.cn. Source: Kinnevik data, news articles

Millicom

Overview The predecessor to Millicom International Cellular was created in 1981, when Kinnevik began a partnership with US-based Millicom to buy mobile-telephony licenses in developing countries. In 1990, Kinnevik contributed its mobile licenses to Millicom and became a majority shareholder of the newly launched independent entity, and has taken an active role in managing the company ever since.

Today, Millicom offers mobile phone services, fixed broadband, pay-TV, and mobile financial services across 7 countries in Latin America and 6 countries in Africa. As of 2014 4Q, the company served 56.3 million mobile phone subscribers and 2.6 million high-speed cable households.

Over the past 3 years, the company has shifted from a pure mobile telecom to a “Digital Lifestyle Company” offering a complete suite of entertainment, internet, media and financial services via mobile, cable, and direct-to-home (DTH) channels. Beginning with the purchase of Amnet in 2008, the acquisition of Cablevision in Paraguay in 2012, the launch of DTH satellite TV in 2014, and the UNE merger in Colombia, Millicom has built the 7th largest pay-tv and broadband operator in Latin America. Management has indicated that they will continue to invest in cable and media going forward.

Competitive Position Millicom has #1 market share in mobile telecom for 4 out of 6 countries in Latin America, is ranked #2/3 in Bolivia, and is a distant #3 player in Colombia. The competitive environment is largely rational in Latin America with 3-4 telecom operators per country. Not coincidentally, Millicom’s EBITDA margins in LATAM are higher than in Africa, with 49.6% in Central America and 33.5% in South America. Millicom competes primarily with America Movil and Telefonica in the region.

Millicom market position, Latin America and Africa

Source: Millicom Capital Markets Day, September 2014

In Africa, Millicom is #1 in Chad, #2 in Tanzania, DRC, Senegal, and Rwanda, and #3 in Ghana. Millicom’s EBITDA margins of 21.9% in Africa are below the company's total average, and have fallen from 35.9% EBITDA margin in 2012. Partially offsetting the decline in ARPU, lower margins, and higher CAPEX requirements are mobile subscriber growth of 24% in 2014 and the success of Tigo Cash Mobile Financial Services. Management has indicated they plan to stay in Africa for the long haul, despite low returns on invested capital. Millicom competes primarily with Bharti Airtel, MTN Group, Vodacom, and country-specific operators.

For the Latin America cable segment, Millicom has a #1 or #2 position in all but one of its countries in pay-TV and broadband internet. Millicom’s competitors in cable and TV include the previously mentioned telecom operators of America Movil and Telefonica, DTH satellite operator DirecTV/SKY, and country-specific operators such as CableTica (Costa Rica), and Sur Multimedia (Paraguay).

Source: Millicom Capital Markets Day, September 2014

Valuation Over the past 4 years, mobile telecom operators, including Millicom, have suffered financially, despite a growing subscriber base. From 2011-2014 the industry has experienced negative margin pressures from a competitive environment, lower mobile termination rates, and falling SMS and voice prices and usage. Making the situation worse is the large investment required to build 3G and 4G networks and smartphone handset subsidies as customers demand faster, cheaper internet access.

For 2015-2017, we forecast high single digit subscriber growth led by Africa and continued growth in cable and MFS revenues, partially offset by lower ARPU. Our fair value estimate for Millicom in 2017 is $11.2 billion or $112 per share, 60% higher than the current price.

Millicom financial projection ($ mm, mm subscribers) 2011 2012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E Central America subscribers 14.1 15.2 15.6 15.6 16.1 16.5 17.0 17.5 18.1 South America subscribers 10.6 12.1 13.3 14.6 16.0 17.2 18.6 19.9 21.1 Africa subscribers 16.1 17.5 19.4 22.8 26.4 30.4 33.5 36.5 39.4 Total mobile subscribers 40.9 44.8 48.3 53.0 58.5 64.2 69.1 73.9 78.6 % growth 9.6% 7.8% 9.8% 10.2% 9.8% 7.7% 7.0% 6.3% Blended ARPU ($) $9.29 $8.44 $8.02 $7.45 $7.00 $6.73 $6.71 $6.64 $6.58 % growth -9.1% -5.0% -7.0% -6.1% -3.8% -0.3% -1.0% -0.9%

Mobile revenue $4,229 $4,537 $4,645 $4,743 $4,909 $5,183 $5,565 $5,894 $6,208 Cable revenue $301 $378 $459 $970 $1,887 $2,057 $2,242 $2,444 $2,664 Other + MFS Revenue $354 $452 $673 $718 $766 $807 $831 $859 Total Revenue $4,528 $5,269 $5,556 $6,386 $7,514 $8,005 $8,614 $9,170 $9,730 % growth 16.4% 5.4% 15.0% 17.7% 6.5% 7.6% 6.4% 6.1% Total operating expenses $3,271 $3,939 $4,489 $5,451 $6,545 $6,796 $7,164 $7,610 $8,060 Operating profit $1,257 $1,330 $1,067 $935 $969 $1,209 $1,450 $1,560 $1,671 as % of revenue 27.8% 25.2% 19.2% 14.6% 12.9% 15.1% 16.8% 17.0% 17.2% D&A expense $739 $865 $935 $1,158 $1,362 $1,452 $1,562 $1,663 $1,764 EBITDA $1,996 $2,192 $2,002 $2,093 $2,331 $2,661 $3,011 $3,222 $3,435 EBITDA Margin 44.1% 41.6% 36.0% 32.8% 31.0% 33.2% 35.0% 35.1% 35.3%

2017 EV/EBITDA Multiple 6.5x 2017 Millicom EV ($ mm) $19,575 - net debt ($3,900) - non-controlling interests ($4,439) 2017 Millicom Equity Valuation $11,236

KINV % interest 37.9% 2017 KINV interest value ($ mm) $4,253 Source: Millicom data, Deerwood estimates *Non-controlling interests comprised of $2.5 bn for 45% of Guatemala and 33% of Honduras, and $1.9 bn for 50% of UNE

Management’s latest guidance for 2017 is $9 billion in revenue with 35% EBITDA margin. Our model projects Millicom falling -5% short of the revenue goal due to continued ARPU pressure, but achieving the EBITDA margin goal due to UNE cost synergies of $100 million per year, lower handset subsidies, and stabilization of ARPU in Central and Latin America from higher data usage.

In 2014 4Q, UNE’s EBITDA margin was 25.7%, far below Latin American cable peers' average of 36%. A 10% margin improvement in the cable segment alone will drive Millicom’s total EBITDA margin higher by 2.0%. In 4Q Millicom’s overall gross margin was also affected negatively by -2.1% due to higher handset sales and regulatory changes, which management has indicated should mitigate in 2015 and 2016.

We believe a 6.5x EV/EBITDA multiple valuation in 2017, slightly above the industry average, is warranted because of the higher mix of revenues from Cable (25% of EBITDA after the UNE transaction compared to 8% in 2013). Cable companies are generally priced higher than mobile telecoms at an average 7.5x EV/EBITDA multiple. In the event of an acquisition of part or all of Millicom, the average EV/EBITDA for recent telecom acquisitions has been in the range of 7.0-8.5x EBITDA.

Latin America and Africa mobile operators comparison Market 2014 2014 EBITDA EV/S EV/EBITDA 2014 EV/Sub ($ in mm, except ratios) Cap Revenue EBITDA Margin Subscribers America Movil 70,069 65,105 20,567 32% 1.6x 5.1x 368 $286 Telefonica 65,185 66,208 21,487 32% 1.8x 5.5x 316 $377 Bharti Airtel 22,300 14,886 4,987 33% 2.2x 6.7x 313 $106 MTN 32,656 13,229 6,121 46% 2.5x 5.4x 219 $151 Zain 8,207 4,351 1,836 42% 2.0x 4.8x 44 $200 Vodacom 16,479 6,818 2,362 35% 2.6x 7.6x 61 $294

LATAM average 32% 1.7x 5.3x $331 Africa average 39% 2.3x 6.1x $188 Total average 37% 2.1x 5.8x $236

Millicom 6,916 6,386 2,093 33% 2.1x 6.5x 53 $257 Source: Company data, Deerwood estimates *Estimated figures if official financials unavailable *Active subscribers in millions, EV/Sub in $

Latin American telecom operators are valued at an average of 5.3x EV/EBITDA or $331 per subscriber. African telecom operators are valued at an average of 6.1x EV/EBITDA or $188 per subscriber. Millicom’s blended value per subscriber is 6.5x EV/EBITDA, or $257 per subscriber, in-line with averages.

Latin America cable companies comparison Market 2014 2014 EBITDA EV/S EV/EBITDA 2014 EV per ($ mm) Cap Revenue EBITDA Margin Households Household LiLAC Liberty Global (Chile) n/a 1,212 451 37% n/a n/a 1.5 n/a Megacable (Mexico) 3,556 822 353 43% 4.2x 9.8x 2.5 $1,405 Cablevision S.A. (Argentina) 3,117 1,642 545 33% 2.1x 6.3x 3.6 $948 Net Servios de Comunicao (Brazil) 8,602 4,768 1,407 30% 1.9x 6.4x 6.4 $1,417 Average 36% 2.7x 7.5x $1,257

MICC UNE + Other Cable 1,655 425 26% 2.6 Source: Company data, Deerwood estimates *Estimated figures if official financials unavailable *Households in millions, EV/Household in $ *UNE + Other Cable 2014 revenue and EBITDA is pro-forma assuming acquisition of UNE on 1/1/14 *Cablevision S.A. market cap includes adjustment for non-controlling interest *Net Servios de Comunicao market cap estimated to be 40% higher than last traded price in 2012 prior to acquisition by AMX

Cable companies in Latin America are valued at an average 7.5x EV/EBITDA or $1,257 per household subscription. At the same per subscriber valuation, Millicom’s cable segment with 2.6 million household subscriptions would be worth an enterprise value of $3.3 billion on a 100% basis.

Further upside to Millicom shares not included in our financial projection may come from the sale or public listing of the Online joint ventures with Rocket (Africa Internet Group, Latin America Internet Group), growth in Tigo Cash Mobile Financial Services, and cable industry consolidation in Latin America.

Management and Ownership Structure There has been high turnover in Millicom's Senior Executive ranks – over the last 4 years there have been 3 CEOs, 1 interim CEO, and 2 CFOs. Leadership issues have been settled for the time being, however, with Mauricio Ramos appointed permanent CEO as of April 1, 2015.

Mauricio Ramos, CEO. Prior to Millicom, Mauricio was President of Liberty Global’s Latin American Division (LiLAC) from 2006-2015. Over the past 14 years he has held leadership roles within Liberty Global as CEO of VTR in Chile, CFO of the Latin American Division, and President of Liberty Puerto Rico. Mr. Ramos is a Colombian national with degrees in Economics, Law, and postgraduate degree in Financial Law from Universidad de los Andes in Bogota.

Tim Pennington, Interim CEO and CFO. Joined Millicom in 2014 as CFO, replacing Francois-Xavier Roger. Previous experience with Cable and Wireless, Hutchison Telecommunications.

Mario Zanotti, Senior Executive Vice President, Latin America. With Millicom since 1992. Previous experience with Tele2 and YXK Systems.

Arthur Bastings, Executive Vice President, Africa. Joined Millicom in 2013. Previous experience with Bigpoint, Discovery Communications Europe, Time Warner, and Viacom.

Martin Lewerth, Executive Vice President, Cable and Digital Media. Joined Millicom in 2012. Previous experience with Modern Times Group, Applied Value, and SKF Group.

Kinnevik has 3 representatives on the board – Cristina Stenbeck is Non-Executive Chairman, and former Kinnevik CEO Mia Brunell Livfors and current Kinnevik CEO Lorenzo Grabau are Non-Executive Directors. Kinnevik owns 37.9% of shares outstanding worth $2.6 billion.

Millicom ownership structure

Kinnevik

Dodge & Cox

41.1% 37.9% Nordea Funds

Veritas Asset Management 10.3% 5.1% Others 5.6%

Source: Nasdaq OMX, September 2014

Timeline 2008 Acquired Amnet cable business in Central America for USD $532 million ($800 per RGU). 2009 Sri Lanka, Sierra Leone, and Cambodia operations sold for total proceeds of $566 million. 2011 Mobile Financial Services (MFS) launched. 2012 Hans-Holger Albrecht was appointed CEO, replacing Mikael Grahne. 2012 Acquired Cablevision in Paraguay for $172 million ($694 per RGU).

2013 First options exercised for Rocket Internet JV stakes in LIH and AIH, MICC total investment of EUR 170 million. 2014 CEO Hans-Holger Albrecht resigned. Tim Pennington, CFO, appointed interim CEO. 2014 UNE transaction in Colombia completed in August. 2015 Mauricio Ramos appointed CEO as of April 1, 2015. Source: Kinnevik data, news articles

Tele2

Overview Founded in 1993 by Jan Stenbeck to compete with fixed-line telecom monopolies, Tele2 has evolved into a mobile telephone and fixed-line operator serving 13.6 million subscribers in 9 countries across Scandinavia and Eastern Europe. Revenue from Sweden and the Netherlands is 70% of total revenues, with the remaining 30% split between Kazakhstan, Croatia, Lithuania, Latvia, Estonia, Austria, and Germany.

Source: Tele2 Annual Report, 2013

Adjusted for the SEK 4.5 billion special dividend to be paid in 2015 from the Norway segment sales proceeds, Tele2 is currently priced at a trailing EV/EBITDA multiple of 7.0x or $433 per subscriber.

Competitive Position Tele2 positions itself as a value “challenger”, offering lower priced products in competition with larger incumbents, either through its own infrastructure or as a mobile virtual network operator (MVNO). From 1993-2005 the company expanded rapidly via acquisition and MVNO growth to a peak of 24 countries and 30 million subscribers. From 2005-2014 management has sold multiple non-core, lower return assets in various countries, and has focused on improving margins and generating cash flows.

Of its remaining 9 countries, Tele2 has the #1 or #2 position in Sweden, Lithuania, and Latvia, and is the #3 or #4 operator in the remaining 6 countries of Netherlands, Kazakhstan, Croatia, Estonia, Austria and Germany.

Tele2 subscribers, population share, and market position, by country Tele2 Subs (mm) Population Share Position Sweden 4.0 41% 2 / 4 Netherlands 1.3 7% 4 / 4 Kazakhstan 3.3 19% 3 / 4 Croatia 0.8 19% 3 / 3 Lithuania 1.8 61% 1 / 4 Latvia 1.0 48% 2 / 3 Estonia 0.5 37% 3 /3 Austria 0.3 3% 4 / 4 Germany 0.7 1% 5 / 5 Source: Tele2, company data. Netherlands, Austria and Germany are MVNO operations

Tele2’s primary global competitors in the Nordic region are TeliaSonera and Telenor. In the Baltics and Eastern Europe, it competes with TeliaSonera, Telekom Austria, Vimpelcom and country-specific operators.

Valuation Our financial projection for Tele2 assumes continued mid-single-digit growth in subscribers, driven by growth in Kazakhstan and the Baltics and higher ARPUs in Sweden, offset by lower ARPU in the Netherlands and Other Countries. In 2017 our fair value estimate is USD $3.9 billion, at a 6.5x EV/EBITDA multiple.

Tele2 financial projection (SEK mm, mm subscribers) 2011 2012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E Sweden subscribers 4.7 4.7 4.5 4.2 4.1 4.1 4.1 4.1 4.1 Netherlands subscribers 1.0 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Other countries subscribers 6.3 6.3 7.7 8.2 8.6 9.2 9.7 10.3 10.9 Total mobile subs 12.1 12.0 13.3 13.6 14.1 14.7 15.3 16.0 16.7 % growth -0.7% 10.8% 2.2% 3.5% 4.1% 4.4% 4.4% 4.5% Blended ARPU (SEK) 181 180 161 159 155 151 150 148 147 % growth -0.1% -10.6% -1.4% -2.5% -2.4% -0.8% -1.2% -1.2%

Revenue 26,219 25,993 25,757 25,955 26,179 26,618 27,585 28,450 29,367 % growth -0.9% -0.9% 0.8% 0.9% 1.7% 3.6% 3.1% 3.2% Total operating expenses 22,408 22,871 23,209 22,465 22,662 23,049 23,901 24,663 25,472 Operating profit 3,811 3,122 2,548 3,490 3,517 3,569 3,684 3,787 3,896 as % of revenue 15% 12% 10% 13% 13% 13% 13% 13% 13% D&A expense 2,944 2,918 2,892 2,436 2,457 2,498 2,589 2,670 2,756 EBITDA 6,755 6,040 5,440 5,926 5,974 6,067 6,273 6,457 6,652 EBITDA Margin 25.8% 23.2% 21.1% 22.8% 22.8% 22.8% 22.7% 22.7% 22.7%

2017 EV/EBITDA Multiple 6.5x 2017 Tele2 EV ($ mm) $4,948 - net debt ($994) 2017 Tele2 Equity Value $3,954

KINV % interest 30.2% 2017 KINV interest value ($ mm) $1,194 Source: Tele2 data, Deerwood estimates *Historical and forecast financials are pro forma for sale of Russia and Norway segments *Blended ARPU in SEK

Tele2 has a policy of returning excess cash to shareholders via dividends, and has readily monetized low- return, non-core assets. The two most recent divestitures were the 2013 sale of Russian operations to VTB Group for $3.5 billion (5.0x EV/EBITDA, $154 per subscriber), and the pending 2015 sale of Norway operations to TeliaSonera for $546 million (1.2x EV/Sales, $500 per subscriber). Proceeds from both sales were paid out to shareholders via extraordinary dividends.

Tele2 shares are currently priced at an above average EV/EBITDA multiple of 7.0x. Our 2017 valuation multiple of 6.5x is slightly more conservative and closer to comparable company multiples, and is the same multiple used in our 2017 Millicom valuation.

European telecom comparison Market 2014 2014 EBITDA EV/S EV/EBITDA 2014 EV/Sub ($ mm) Cap Revenue EBITDA Margin Subscribers TeliaSonera 26,048 14,360 5,005 35% 2.4x 6.9x 73 $474 Telefonica 65,185 66,208 21,487 32% 1.8x 5.5x 316 $377 Telenor 33,038 16,397 5,799 35% 2.5x 6.9x 186 $217 Average 34% 2.2x 6.5x $356

Tele2 4,794 3,688 842 23% 1.6x 7.0x 13.6 $433 Source: Company data, Deerwood estimates *Estimated figures if official financials unavailable *Subscribers in millions, EV/Sub in $ *TeliaSonera market cap adjusted downward for 38% stake in Turkcell worth $4 bn and 25.2% stake in Megafon worth $2.5 bn *Telenor market cap adjusted downward for 33% stake in Vimpelcom worth $3 bn *Tele2 market cap is adjusted downward for the planned special dividend from proceeds of Norway operations *Tele2 2014 revenue and EBITDA are pro forma for sale of Norway operations *Subscribers include wireless, fixed line, and pay-TV subscribers

Management and Ownership Structure Mats Granyrd, CEO, joined Tele2 in 2010. Previous experience with Ericsson and Andersen Consulting. Owns 57,725 B shares and 180,000 stock rights, worth USD $2.5 million.

Allison Kirkby, CFO, joined Tele 2 in 2014. Previous experience with Virgin Media, Procter & Gamble, and Shine Corporation.

Tele2 ownership structure

30.2% Kinnevik Nordea Alfa Andra AP-Fonden 63.8% 4.0% Others 2.0%

Source: Cision/Euroclear (Tele2 Website)

Timeline 1996 Tele2 shares spun-off from Kinnevik and listed publicly. 2001 Launched operations in Russia via FORA Telecom acquisition 2006 Reduction from 28 to 13 countries of operation to improve return on capital. 2010 Launched operations in Kazakhstan via acquisition. 2013 Sale of Russian operations to VTB Group for $3.5 bn ($154 per sub) in March 2015 Sale of Norway operations to TeliaSonera for $550 million ($500 per sub). Source: Kinnevik and Tele2 data, news articles

Modern Times Group

Overview Modern Times Group (MTG) was founded in 1987 by Jan Stenbeck as Scandinavia’s first commercial TV channel, TV3. 28 years later, MTG has evolved into a broadcaster and distributor of free-TV, pay-TV, radio, and digital media across 37 countries in Europe and Africa. The company also owns 37.9% of CTC Media (NASDAQ: CTCM), Russia’s largest independent television broadcaster, accounted as an equity method associate.

Source: Modern Times Group Capital Markets Day, 2014

44% of MTG's revenue is from sales of advertising, 47% is from subscription revenue via retail DTH satellite customers and wholesale content customers, and 9% is from B2B/Consumer revenue. The Viasat Broadcasting segment, which includes all Pay-TV and Free-TV businesses, is 84% of total revenues, and the Nice/MTGx/Radio segment is 16% of total revenues.

Competitive Position MTG has stable, leading commercial viewing shares of 15-31% in Scandinavia Free-TV. In the region it competes with TV4 Group and Canal.

Free-TV Scandinavia commercial share of viewing, 2013-2014

Source: MTG 2014 4Q Earnings Release

For the pay-TV Nordic business, MTG has 1 million premium subscribers, with the 2014 loss of satellite subscribers offset by addition of third party network subscribers. Canal Digital is MTG’s primary competitor for DTH satellite-TV.

Pay-TV Nordic subscriber and ARPU, 2013-2014

Source: MTG 2014 4Q Earnings Release

In Free-TV emerging markets, which are primarily driven by the Baltic, Czech, and Bulgarian markets, MTG has leading market share of 34-50% in most countries, competing with state-owned channels, TV Nova (Czech), and Fox International.

Free-TV emerging markets commercial share of viewing, 2013-2014

Source: MTG 2014 4Q Earnings Release

In the pay-TV emerging markets segment, of which 94% of revenues are from the Baltics, Czech and Bulgaria, MTG has grown its wholesale mini-pay channel subscriptions to 131M (including acquisition of Trace), but has lost –16% of satellite subscribers in 2014.

Pay-TV emerging markets mini-pay and satellite subscribers, 2013-2014

Source: MTG 2014 4Q Earnings Release

CTC Media’s channels have a minority share of viewing, with the #6 position behind the 3 state-owned channels, TNT, and Channel 5. For Channel 31 in Kazakhstan it has 15.4% viewing share.

Valuation We consider MTG’s core Scandinavian free-TV and pay-TV segments (63% of total revenue and 73% of total EBIT) mature, cash generative businesses, with future organic growth in-line with GDP growth of 1- 3%. The Emerging Markets free-TV and pay-TV segments margins and revenue growth have been uneven in recent years due to impairments and write-offs. The Nice/MTGx/Radio business has not produced positive operating income on a stand-alone basis. Finally, there is uncertainty associated with the recent Russian law passed limiting foreign ownership in media companies to 20%, which may force a partial sale of MTG’s 37.9% stake in CTC Media and the Russian pay-TV businesses.

Therefore, our 2015-2017 financial projection for MTG assumes a conservative organic growth rate of 3.5% per year, with EBITDA margin remaining at 2014 levels of 12.7%.

MTG financial projection (SEK mm) 2009 2010 2011 2012 2013 2014 2015 E 2016 E 2017 E Revenue 12,427 13,101 13,473 13,336 14,129 15,746 16,297 16,868 17,458 % growth 5.4% 2.8% -1.0% 5.9% 11.4% 3.5% 3.5% 3.5% Gross profit 4,873 5,199 4,693 5,438 5,610 5,967 6,176 6,392 6,616 Gross Margin 39% 40% 35% 41% 40% 38% 38% 38% 38% Operating profit (EBIT) 1,855 2,424 2,567 2,124 1,885 1,830 1,894 1,960 2,029 EBIT Margin 14.9% 18.5% 19.1% 15.9% 13.3% 11.6% 11.6% 11.6% 11.6% EBITDA 2,085 2,642 2,750 2,286 2,074 1,998 2,068 2,140 2,215 EBITDA Margin 16.8% 20.2% 20.4% 17.1% 14.7% 12.7% 12.7% 12.7% 12.7%

2017 EBITDA Multiple 10.0x Exchange Rate (USD-SEK) 8.24 2017 MTG EV ($ mm) $2,688 - net debt ($43) 2017 MTG Valuation ($ mm) $2,645

KINV % interest 20% 2017 KINV interest value ($ mm) $529 Source: Company data, Deerwood estimates *EBITDA includes share of earnings in associated companies and JVs *Forecast assumes no change in interests in CTC Media or other Russian assets

At an EV/EBITDA multiple of 10.0x, slightly below peers’ average of 12.7x, our estimate of fair value for MTG in 2017 is USD $2.6 billion.

European television companies comparison

Enterprise LTM LTM EBITDA EBITDA EV/Revenue EV/EBITDA ($ in mm) Value Revenue Margin ITV plc 14,514 3,786 978 26% 3.8x 14.8x Mediaset S.p.A 6,132 4,459 447 10% 1.4x 13.7x British Sky Broadcasting 31,858 12,661 2,544 20% 2.5x 12.5x RTL Group SA 16,399 7,610 1,346 18% 2.2x 12.2x ProSiebenSat.1 Media 11,661 3,596 1,121 31% 3.2x 10.4x Average 21% 2.6x 12.7x

MTG 2,251 2,237 284 13% 1.0x 7.9x Source: Bloomberg, Morningstar, Yahoo, Company data, Deerwood estimates

Management and Ownership Structure Jorgen Madsen Lindemann, CEO. Appointed CEO of MTG in 2012, replacing Hans-Holger Albrecht. Employed by MTG since 1994. Serves on the board of CTC Media as Co-Chairman.

Mathias Hermansson, CFO. Appointed CFO in 2006, replacing Mia Brunell Livfors. Joined MTG in 1999, previously was MTG Group Financial Controller from 2001-2006. Serves on the board of CTC Media.

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MTG ownership structure

Kinnevik 20%

Nordea Funds 6% 4% Swedbank Robur Funds 70% Others

Source: SIS Agarservice

Timeline 1987 TV3 began broadcasting as Scandinavia’s first commercial TV channel. 1991 Viasat satellite Pay-TV business launched. 1995 MTG was formed as a subgroup within Kinnevik. 1997 Shares in MTG distributed to Kinnevik shareholders and listed publicly. 2000 Metro spun-off and publicly listed. 2001 MTG acquired 75% of Darial TV, a Television channel in Russia. 2002 Acquisition of 37% in StoryFirst Communications, owner of CTC Media. 2008 Sold DTV in Russia to CTC Media and acquired Nova in Bulgaria with proceeds. 2010 CDON/Qliro spun-off and publicly listed. 2014 Acquired 75% of Trace Partners. 2015 Sold Hungarian Free-TV channels Sony Source: MTG data, news articles

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Bayport

Overview Bayport Management Ltd., founded in 2002, is an emerging markets financial services provider making micro-loans to individuals in Africa and Latin America. The company essentially operates as a sub-prime emerging markets bank, with a capital structure funded by a combination of corporate bonds, term loans, and securitizations. Bayport has 400 branches and multiple outbound call-centers to facilitate originations, and employs over 4,000 mobile, commission-earning agents.

As of February 2015, Bayport services over 532,000 customers holding loans totaling USD $865M, at an average loan size of $1,620 and an average gross interest rate of 26% (before provision for credit losses). Loans are used by borrowers for financing non-recurring expenses such as education, farming investments, housing improvement, or small business purposes.

Source: Kinnevik Capital Markets Day, September 2014

In January 2014, the company acquired Bayport Financial Services South Africa for ZAR 1.6 billion, financed by issuing equity to new and existing investors, including Kinnevik. The acquisition doubled the size of the loan book. As of September 2014, the company reported total assets of USD $1.13 billion, net advances/loans of $940 million, and shareholders’ equity of $237 million.

The company is technically “listed” on the Stock Exchange of Mauritius, with public financial reporting requirements, but its shares are unavailable for purchase by the public.

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For the fiscal year ending March 2015, we estimate Bayport will have a net loan book of $1.03 billion, shareholders’ equity of $247 million, and adjusted net income of $49 million. Based on Kinnevik’s fair value mark of USD $430 million on a 100% basis, the company is trading at a price to book ratio of 1.7x and a price to earnings ratio of 8.7x.

Valuation Bayport has grown rapidly since 2005, increasing its loan book to over $1.0 billion from $12 million. Shareholders’ equity to loans has held steady at 23-24% from 2011-2013. The company has historically generated high ROEs with 23% in 2013, although ROE has been decreasing since 2011's high of 32%.

Bayport financial projection ($ mm, except ROE) (year ending 3/31) 2011 2012 2013 2014 E 2015 E 2016 E 2017 E Non-SA Loan Portfolio 231 340 418 % growth 47% 23% South Africa Loan Portfolio 439 Total Loan Portfolio 231 340 857 1,028 1,234 1,481 1,777 % growth 47% 152% 20% 20% 20% 20% Shareholders' Equity 54 75 209 247 296 355 426 Equity to Loans 23% 22% 24% 24% 24% 24% 24% Net income 17 20 49 49 59 71 85 ROE 32% 27% 23% 20% 20% 20% 20% Valuation ($ mm) $430 $725

2017 P/B ratio 1.7x 2017 implied P/E ratio 8.5x

2017 Bayport Valuation ($ mm) $725 KINV % interest 30.7% 2017 KINV interest value ($ mm) $223 Source: Kinnevik and Bayport data, Deerwood estimates *2013 ROE and net income is a pro forma estimation assuming Bayport South Africa was acquired on 3/31/13

We forecast 20% growth in the loan book from 2014-2017, with a stable equity to loan ratio of 24%, and ROE of 20%. In 2017 we value the company at a price to book multiple of 1.7x, which implies a P/E ratio of 8.5x P/E, both reasonable multiples for a bank.

Bayport’s closest publicly traded peer is Gentera, a publicly-traded micro-lender in Mexico with a total loan book of USD $1.6 billion. Gentera sports a much higher public market valuation of $3.2 billion, with a P/B multiple of 4.2x and P/E of 19.3x, likely due to its long track record of profitability since 1990, higher gross yields on loans of 60%, lower provision for credit losses as % of net loans, and higher ROA of 11.8% and higher ROE of 32%.

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Bayport vs. Gentera financial metrics comparison 2014 1H 2014 T9M 2014 Financial Ratio Comparison Bayport Gentera Yield on gross loans 26.2% 60.4% Interest expense as % debt 12.8% 7.8% Net interest margin 17.2% 53.0%

Provision for credit losses as % of net loans 10.7% 6.9% Charge-offs as % of net loans 4.6% 6.9% Allowance for loan losses as % of gross loans 16.0% 3.3%

Efficiency ratio 83.3% 64.1% Source: Bayport, Gentera data *1H and T9M metrics are annualized for comparison purposes

It is interesting to note that despite over double the interest rates of Bayport, Gentera has lower provisions for credit losses as a percentage of net loans, implying that Bayport is significantly underpricing its loans. This corroborates comments made by Justin Chola in 2007 that Bayport intentionally does not charge the maximum rate of interest possible in order to benefit the communities they serve – in fact the interest rates of 70-90% at that time were not significantly higher than commercial bank rates, and much lower than “loan sharks”.

We believe Bayport is a likely candidate to be publicly listed in the next few years to tap additional sources of financing for expansion to new geographies.

Management and Ownership Structure Grant Kurland, Co-CEO and co-founder, owns 11.8% of Bayport. Previous experience with Credit Direct, and Nando’s. Stuart Stone, Co-CEO and co-founder, owns 10.7% of Bayport. Justin Chola, Non-Executive Director.

Bayport ownership structure

Kinnevik

Helios Investment 23.6% 30.7% Partners Grant Kurland 10.7% Stuart Stone 11.8% 23.2% Others

Source: Bayport, Kinnevik data

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Timeline 2002 Bayport founded by Stuart Stone and Grant Kurland as a British Virgin Islands company. 2005 Changed corporate domicile to Mauritius. 2011 Converted to a “public” company, and listed on Stock Exchange of Mauritius in 2013. 2013 Raised USD $137 million from Helios, Kinnevik, Groundsel and Grant Kurland. 2014 Bayport acquires Bayport South Africa from primary owners Stuart Stone and Grant Kurland in January. 2015 Expands operations to Mexico, Nigeria, and Peru. Source: Kinnevik, Bayport data

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Bima

Overview Bima, founded in 2011, operates a microinsurance platform in emerging markets. The company’s business model is to provide product development, distribution, marketing, underwriting, and administration services by connecting mobile operators, policyholders, and insurance providers.

Source: Kinnevik Capital Markets Day, September 2014

Bima sells life, health, and accident insurance with an estimated monthly premium of USD $0.75-1.00 per subscriber, which is paid via mobile airtime reloads. Revenue is shared between Bima, the mobile operator, and the insurance provider at an estimated 1/3 equal split.

Over the past 3.5 years since its founding, Bima has grown rapidly to over 13 million registered insurance subscribers, and currently has partnerships with 6 mobile operators and 5 insurers across 13 countries and 3 continents.

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Source: Kinnevik Capital Markets Day, September 2014

Management has indicated that they plan to expand beyond mobile-operator-linked insurance products, shifting from a purely intermediary role to a fully-fledged insurance and financial services provider. In doing so, Bima will incur a greater proportion of underwriting and financing risk and capture a higher share of wallet, revenue and profits.

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Valuation No official financial results have been released for Bima, so our estimates are subject to a high degree of uncertainty. However, historical subscriber data shows that the company is expanding very rapidly, growing subscribers 86% year-over-year in 2014. Assuming a monthly average premium of USD $0.75 and a 33% revenue share to Bima, we estimate 2014 revenue of $39 million at an implied sales multiple of 1.7x.

Bima financial projection ($ mm, subscribers in mm) 2011 2012 2013 2014 2015 E 2016 E 2017 E Total subscriber base (mm) 0.1 2 7 13 18 24 28 % growth 1900% 250% 86% 40% 30% 20%

Valuation ($ mm) $64 $140 KINV % interest 39% 39% KINV interest value ($ mm) $25 $55

Estimated Financials* Monthly premium per subscriber ($)* $0.75 $0.75 $0.75 $0.75 $0.75 $0.75 $0.75 33% revenue share to BIMA* 33% 33% 33% 33% 33% 33% 33% BIMA revenue* $0 $6 $21 $39 $54 $70 $84 Estimated P/S multiple* 1.7x 1.7x Source: Kinnevik data, Deerwood estimates *Assumes valuation grows 1:1 with growth in total subscriber base *Estimated

Our financial projection for 2015-2017 assumes decelerating growth in subscribers, flat monthly premium per subscriber, and a 33% revenue share to Bima. In 2017, with 28 million subscribers and $84 million in revenue, we estimate fair value for Bima of $140 million at a 1.7x sales multiple.

We believe a 2017 sales multiple of 1.7x is reasonable, considering the life insurance industry average P/S multiple of 0.90x and insurance broker industry average multiple of 2.0x. Given its rapid growth, large target market, and potential for product expansion and upselling, we believe Bima warrants a higher multiple closer to an insurance intermediary.

Management and Ownership Structure Gustaf Agertson, CEO. Previous experience with Tele2.

Mathida Strom, Deputy CEO and Head of Business Development. Previous experience with Value Partners.

Ola Johnsson, CFO. Previous experience with Modern Times Group and CDON Group.

Chris Bischoff, Investment Director at Kinnevik, serves on the Board. Stewart Langdon, Partner at LeapFrog Investments, serves on the Board.

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Bima ownership structure

17% Leapfrog Investments 44% Kinnevik

Digicel 39%

Source: Kinnevik, Bima data, Deerwood estimates

Timeline 2010 Bima founded. First products sold via partnership with Tigo Ghana. 2014 Launched operations in Paraguay and Honduras in October. 2014 Raised USD $5 million financing from Digicel at a $64 million valuation in December. Source: Kinnevik, Bima data

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Miscellaneous company analyses

In this section we list the non-core, smaller companies that make up the remainder of Kinnevik’s net asset value. For all of these companies except Metro, we kept the fair value estimates in 2017 unchanged from the valuation marks as of 2014 4Q. For Metro, we wrote down its value to zero in 2017, as it is likely to continue producing losses for the foreseeable future.

For the publicly traded companies of Transcom and Black Earth Farming, we also present basic historical financial information.

Home and Living - Other Valued at SEK 93 million, Kinnevik has not yet disclosed what other investments are included in the Home and Living category outside of the stakes in Home24 and Westwing. For the 2017 NAV estimate, we did not change the value of this category from 2014 4Q.

Other E-commerce – Other Excluding Kinnevik’s 10% stake in Jumia worth SEK 409 million, the Other category within Other e- commerce was valued at SEK 257 million. We believe this includes a stake in Fab Furnish and other undisclosed investments. For the 2017 NAV estimate, we did not change the value of this category from 2014 4Q.

Marketplaces - Other Valued at SEK 115 million, we believe the other marketplace investments consist of an estimated 33% stake in Yell.ru, and interests in Dealdey, Foodpanda, and PricePanda. For the 2017 NAV estimate, we did not change the value of this category from 2014 4Q.

Financial Services & Other - Other This category was valued at SEK 328 million. We believe the publicly traded stake in Seamless valued at SEK 48 million is included in this category, as well as a SEK 7 million investment in Belcash and other undisclosed investments. For the 2017 NAV estimate, we did not change the value of this category from 2014 4Q.

Entertainment - Other We believe Kinnevik’s stake in IROKOTV is included in the Entertainment – Other category which was valued at SEK 106 million. For the 2017 NAV estimate, we did not change the value of this category from 2014 4Q.

Transcom Transcom Worldwide provides customer care, sales, technical support, and credit management outsourcing services globally. It is publicly listed on the Nasdaq OMX Stockholm exchange under symbol TWW, with a market capitalization of USD $224 million. Kinnevik owns 33% of capital and 39.7% of total voting power.

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Transcom historical financials, 2009-2014 (EUR mm) 2009 2010 2011 2012 2013 2014 Revenue 560 589 554 606 653 617 % YOY Growth 5.2% -5.9% 9.4% 7.8% -5.5% Operating margin 4.3% -1.1% -5.1% -2.9% -0.8% 3.5% Adjusted EBIT 8.7 17.6 21.3 Net income/loss 20.6 -8.0 -50.4 -30.6 -18.6 6.9 CFO 17.7 29.1 27.5 -12.4 9.9 11.5 Source: Transcom data

The company is currently valued at 16.9x cash flows from operations, 10.5x EBIT multiple and 0.4x sales multiple. We did not change Transcom’s 2017 estimated valuation from the 2014 4Q mark.

Black Earth Farming Black Earth Farming Ltd. owns 179,921 hectares (444,594 acres) of harvestable farmland in Russia’s Central Black Earth Region. During the first 9 months of 2014, it generated revenue of USD $64 million and EBITDA of $14 million on 245,038 tons of crops sold. Shares are listed on NASDAQ OMX Stockholm under the symbol BEF-SDB, at USD $76 million market capitalization. Kinnevik owns 24.9% of shares outstanding. For the 2017 NAV estimate, we did not change Black Earth Farming’s value from 2014 4Q.

Rolnyvik Rolnyvik owns the Barciany and Podlawki farms in Poland, totaling 6,705 hectares (16,568 acres). Rolnyvik is a 100% wholly-owned subsidiary of Kinnevik.

Rolnyvik Historical Operating Income, 2007-2012 (SEK mm) 2007 2008 2009 2010 2011 2012 Operating income 9 14 12 16 23 19

As of 2014 4Q, Kinnevik’s fair value for Rolnyvik was SEK 250 million (USD $30 million), or $2,000 per acre. We did not change Rolnyvik’s 2017 estimated valuation from the 2014 4Q value.

Metro Metro International publishes a free newspaper distributed in over 150 cities in 23 countries across Europe, Asia, North and South America. In 2013 readership was approximately 18.3 million. The company is a 100% wholly-owned subsidiary of Kinnevik, and as of 2014 4Q was valued at SEK 321 million (USD $30 million).

Metro Historical Financials, 2006-2014 (EUR mm) 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenue 417 331 295 191 207 197 194 149 109 % change -21% -11% -35% 8% -5% -2% -23% -27% Adjusted EBIT 17 (19) (20) (3) 5 13 10 10 (4) Source: Kinnevik Annual Reports *2014 Adjusted EBIT excludes SEK -330 million impairment of goodwill

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The prospects for physical freesheet newspapers are quite poor, as seen by the cumulative -74% decline in Metro’s revenue from 2006-2014, and cumulative total adjusted EBIT of EUR 8 million over 9 years. Due to the competition from electronic media and rapid decline in readership, we believe Kinnevik will write down the Metro business to zero within 3 years. For Kinnevik’s 2017 NAV estimate, we therefore assigned zero value to the Metro operating business. However, the SEK 140 million in net cash within Metro was kept intact from 2014 4Q.

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