MICROCAPITAL STORY: Kinnevik Invests $10m in Microfinance Equity Fund MicroVest II

Swedish company Investment AB Kinnevik has committed to investing USD 10 million in MicroVest II , an equity fund focusing on microfinance and part of the microfinance investment group MicroVest Capital Funds. Additionally, Kinnevik announced the acquisition of 30 percent of shares worth USD 4 million in an Ukrainian farming company. Henrik Persson, Head of New Investments at Kinnevik, comments, “”Micro financing and farming are focus sectors for new investments in Kinnevik and we are pleased to have identified investments within these growth areas.” In October 2007, MicroCapital reported that Kinnevik invested USD 14 million in the African microfinance institution (MFI) Bayport Financial Services.

Kinnevik, founded in 1936, invests in companies including Tele2, Modern Times Group MTG, Millicom International Cellular S.A., Metro International, and Transcom WorldWide. Microfinance investments are classified as New Ventures, a category that also includes investments in agriculture, renewable energy, and online media. Other non-microfinance investments in this category include R2 International, Rolnyvik, Black Earth Farming, Sia Latgran, Relevant Traffic, Kontakt East, and Exits. In a 2008 annual report, Kinnevik reported USD 980.6 million in revenue, gross profit of USD 102 million, and net loss for the year of USD 3.2 billion mainly due to change in value of assets. Total assets were reported as USD 4.6 billion.

Microvest II is a member of the MicroVest Group, which also consists of the funds MicroVest I, LP, MicroVest II-A, LP, and MicroAccess Trust 2007. The MicroVest Group is a Delaware-based fund founded in 2004 by the non-profit institutions CARE, MEDA and Seed Capital Development Fund. The group invests in 150 microfinance programs in 75 countries. According to the MIX Market, the microfinance information clearinghouse, MicroVest I reports USD 33.1 million in fund assets of which USD 28.8 million are allocated to microfinance investments as of March 2008. In 2009, MicroVest reported that it had exceeded USD 100 million in assets and commitments. In May 2009, MicroCapital reported on MicroVest’s USD 1 million loan to the SEEDFINANCE Corporation of the Phillippines. Individual information for the MicroVest II fund is not available.

Kinnevik’s only other microfinance investment, Bayport was founded in 2002 and offers micro credit and financial services in Ghana, Uganda, Zambia and Tanzania. The MFI serves 150,000 clients through 61 branches. Bayport does not report to the MIX Market.

Additional Resources:

Kinnevik: Home
MicroVest Capital Funds: Home
“Kinnevik invests USD 10 million in the micro finance fund microvest and acquires 30% of a farming company in the Ukraine”, Published by Kinnevik, June 2009
“Kinnevik Invests $14m in African Microfinance Institution Bayport Financial Services”, by Elizabeth Nelson, Published by MicroCapital, October 2007
“Annual Report 2008”, Published by Kinnevik
MIX Market: MicroVest I
“MicroVest Crosses $100 Million Mark”, Published by MicroVest, January 2009
“SEEDFINANCE Corporation of the Philippines receives $1m Microfinance Investment Loan from MicroVest I during May 2009”, by Sally Levy, Published by MicroCapital, June 2009