Investor Presentation January, 2020
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Investor Presentation January, 2020 THE MOST INNOVATIVE IN CREDIT SCORING SERVICES INNOVATION LEADER TOP-250 FINTECH COMPANIES TOP-50 FASTEST GROWING COMPANY IN EUROPE 100 HOTTEST STARTUPS IN EUROPE FASTEST GROWING FINTECH COMPANY IN CONTINENTAL EUROPE
Transcript of Investor Presentation January, 2020
Investor Presentation
January, 2020
THE MOST INNOVATIVE
IN CREDIT SCORING
SERVICES
INNOVATION
LEADER
TOP-250 FINTECH
COMPANIES
TOP-50
FASTEST GROWING
COMPANY IN EUROPE
100 HOTTEST
STARTUPS IN EUROPE
FASTEST GROWING
FINTECH COMPANY IN
CONTINENTAL EUROPE
Fastest growing fintech in Continental Europe according to Financial Times FT1000 ranking (2019)
Focused on unsecured lending in Spain and Latin America
ID Finance – A Fast Growing International Fintech
ID Finance has a unique technology platform, a proven track record and is focused on expansion in Spain & Latin America
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Profitable in Spain, strong unit economics in LatAm
IDF Technology: robust data science and credit scoring capabilities built on proprietary State-of-the-
Art IT Platform with fully dedicated in-house teams
IDF Lab: innovative risk and data science team, expert in AI, machine learning
Highly Qualified Global Team: combination of deep local market knowledge with global best practices
pave the way for a successful execution
In 2015 launched operations in Spain and Latin America, where compelling growth opportunity exists
Quickly became a market leader in the competitive Spanish market and reached profitability
Introduction
The Opportunity
in Spain & LatAm
Why ID Finance
c.$90m
revenue in 2019,
and c.$50m for 2018
Almost doubled
since 2018
$98bn
TAM in Spain
and LatAm
3.7m unique
registered users in
Europe and LatAm
90%
retention rate
ID Finance featured in the list of Top Spanish
startups to follow in 2020 by Sifted
Robust financial indicators and rapidly growing business:
− Revenues: c.$90m for 2019 (x1.7 YoY growth)
− Issuance: c.$160m for 2019 (x1.7 YoY growth)
Strong operating performance resulting in profitability:
− 3.7m registered users
− +35,000 new users weekly
− 90% customer retention rate
− Profitability achieved in Spain: c.$3.5m for 2019
Global structure ready to scale up:
− Fully established international team: 400+ professionals
− 5 offices:
Headquarters: Barcelona
Operating companies: Spain, Brazil and Mexico
IT, data science and risk teams: Russia and Belarus
ID Finance – Empowering the Underbanked
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A leading digital finance provider focused on Spain and Latin America
Key Business Highlights Volume Issued (US$ mm)
Revenues (US$ mm)
-
200
400
600
800
1,000
1,200
2016A 2017A 2018A 2019F 2020F 2021F 2022F 2023F
-
100
200
300
400
500
600
700
2016A 2017A 2018A 2019F 2020F 2021F 2022F 2023F
2.2x3.5x
3.3x3.0x
1.7x
1.7x
Exceptional Traction Achieved So Far in Spain and Latin America
ID Finance is ready for rapid scaling
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Loan Issuance (‘000 US$)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
reached profitability
0
2,000
4,000
6,000
8,000
10,000
12,000
achieved positive unit economics
14.0
20.9
6.6
17.4
21.9
29.026.8
53.8
41.8
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2013 2014 2015 2016 2017 2018 2019
FinTech Market Approaches New Records In 2019
ID Finance growth is supported by favourable market conditions
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FinTech Sector Continues to Grow* Remarkable Deals in Digital Consumer Finance 2Q2019
2019 is on track to be the second strongest year ever
Europe is on track to record levels and already exceeded last year
volume with $5.8 billion financing volume in 1H2019
Banking & Lending Technology - the most active sector for
financing in 1H2019, with 272 deals and $8.4 billion financing volume
Financing
deals in 1H19
M&A deals
in 1H19
Amount Deal Date Lead investor
$400m with
valuation of
$10bn
Series F,
equityJul’19 TCV
$200m with
valuation of
$0.7bn
Series D,
equityJun'19 Softbank
$500m with
valuation of
$4.8bn
Private
Equity
round
May'19
Qatar
Investment
Authority
$300m with
valuation of
$2.9bn
Series F,
equityApr'19 Thrive Capital
Sources: FT Partners Fintech Industry Research (2Q2019), fintechfutures.com
$21b $148b
annualized
$14bn largest
ever raise
0% 50% 100% 150% 200%
The Fintech Revolution in Latin America and the Potential for Growth in Credit
Latin America is widely recognized as one of the fastest growing fintech markets in the world
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ID Finance Total Addressable Market* Domestic Credit as % of GDP (2018)
Sources: Company, E&Y Survey (2017), World Bank
LatAm World
US$57 bnPeru, Colombia,
Hispanic USA
US$98 bnBrazil, Mexico,
Spain
ID Finance Strategy focused on entry into selected high growth markets
* TAM calculation is based on under(un)banked population on the analyzed markets and average check amounts
Favorable Market Trends for Digital Finance in Latin America
Young and vibrant fintech companies, quickly reshaping retail banking while increasing financial inclusion in Latin America
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Under(Un)banked
Population
Regulatory
Framework
Demographic
Bonus
Economic Recovery
Highly concentrated markets = very high borrowing costs
Incumbents have outdated technology, oversized operations, bureaucratic processes
Low Level of
Competition
Technology
Disruption
50%+ of Brazil and Mexico populations are underbanked or financially excluded
More smartphones than bank accounts in Mexico; more than people in Brazil
Technology is enabling adoption of new, digital financial solutions
New distribution channels for financial services, turning “offline-banking” obsolete
Central banks have created a fintech-friendly environment
This helps modernize financial services and reduce banking concentration
E.g. Central Bank of Brazil (res. 4.656/18) gives fintechs status of financial institutions
New generation of users: young, educated, tech-savvy, financially literate
Growing demand for convenience and customized services
Political stability in Brazil and Mexico, key LatAm markets
Expectation of greater fiscal discipline and much needed structural reforms
This is likely to lead to sustainable economic and social growth
Drivers of
Digital Finance
Growth in
LatAm
1
2
3
4
5
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ID Finance Differentiated Position in the Market
Deep understanding of target customers and positioning strategies
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Positioning
20-45 years old
Demand convenience
Under(un)banked
US$1-1.5k disposable income
Tech-savvy
Loan users / clients without
credit history
Target Clients
Hig
h m
arg
inL
ow
ma
rgin
TAM (Spain + LatAm):
c.US$98 bn
ID Finance helps customers who are underserved by traditional financial institutions
Banks’ target
lending market
Affluent Middle Lower Middle Subprime
Under(un)banked clients
Banks’
maximum
margin
target lending market
Served by banks
Product Portfolio Aligned with Market Demand
Customized products and solutions targeted to specific markets and client groups
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Helps people solve short-term cash
flow needs
Fully automated lending service
operating online 24/7
Fast and convenient financial
services via web and mobile platforms
Proprietary IT-stack
Credit scoring using alternative data
sources
Long-term loans for entrepreneurs,
SMEs, and for under-banked
consumers
Fast and convenient financial
services via web and mobile
platforms
Adresses finance inclusion in the
emerging markets
Proprietary IT-stack and scoring
using alternative data sources
Loan size up to US$1.3k up to US$750 up to US$600 up to US$3.5k
Term up to 4 months from 6 to 12 months up to 1 month up to 3 years
Interest rate ~16% per month ~16% per month ~27% per month ~3% per month
To be launched
Strategic Focus on Capturing the Market Opportunity
ID Finance has built a solid foundation in Spain and Latin America
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Pre-
operationalLaunch in Spain Launch in LatAm
LatAm Expansion and
New Products Launch
Expansion to Brazil (Nov/16)
ID Finance founded
Team hired
Unsecured lending
platform is launched
Further Scaling
Launched in Spain (Jul/15)
Expansion to Mexico (Sep/17)
Reach profitability in Brazil and Mexico
Expand product range:
► credit cards / revolving facilities
► current accounts / deposits
Exploring scaling
opportunities in
other countries
Achieved positive unit
economics in Spain
Reached profitability in Spain
Achieved positive unit
economics in Brazil and Mexico
TAM:
c.US$98 bn
SPA
III IVIII
c.1%
2015 2016 2017 2018 2019F 2020F …… 2023F
BRA
MEX
Expand product range:
► new consumer loans
► overdrafts
► currency exchange tools
► money transfers
Gross Loan Portfolio
(US$ mm) 628
529393
280
607
Highly Qualified Global Management Team
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Boris Batin, PhD
co-founder, CEO
15+ years of work experience in banking
Previously held various senior positions at
Deutsche Bank, Renaissance Capital and RBS in
London and Moscow
Graduated from Cambridge University with a
degree of Master in Economics
Alexander Dunaev, CFA
co-founder, COO
10+ years of experience in banking and finance
Previously experience: Deutsche Bank, London
Holds Chartered Financial Analyst degree
Graduated from Imperial College with a degree of
Master in Finance
Kieran Donnelly
Board member
30+ years of management experience in banking
and finance
Served as CEO of 4finance
Holds senior roles at Standard Bank Group, MDM
Bank and Renaissance Group
Javier Lopez
Chief Financial Officer (CFO)
20+ years of work in financial services
Previous experience in General Electric and
Standard Chartered Bank
Graduated from ESADE University (Barcelona,
Spain) with a degree of MBA
Ekaterina Kazak
Chief Risk Officer (CRO)
10+ years of work experience in risk management
Previously worked as Head of Russia & CIS
Experian Analytics
Graduated from Moscow State University of
Economics, Statistics and Informatics
Alessandro Ceschel
Chief Marketing Officer (CMO)
11 years experience in Digital Marketing and
international IT Projects
Developed online businesses B2C, B2B and P2P
in Spain – Ulabox, Logismarket, Socialcar, worked
in MNC (Nestlé) and in early stage startups
Graduated from Padova University with a Master in
Industrial Engineering and Business Administration
Spain and Latin America Strategy Driven by Experienced Local Teams
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Alisa Cevere
Yannick Del Ponte Bonilla
Country Manager Mexico
20+ years of work in financial services
Previously held senior positions in Servicios
Financeiros con Valor, Pretmex and Fullerton
Financial Holdings
Certified in Financial Institutions for Private
Enterprise Development at Harvard Kennedy
School; Post Graduate Certificate in Corporate
Finance at Universidad Intercontinental
Ademir de Araujo
Chief Financial Officer (CFO) Brazil
28+ years of work in accounting and finance
Previously worked as CFO and COO at Société
Générale Equipment Finance and as Finance
Director at GE Healthcare Life Sciences
Holds a bachelor’s degree in Accounting from
FECAP and MBA from FGV
Country Manager Plazo Spain
9 years of experience in finance
Held senior positions at GE Capital, Twinero, Via
SMS Group and FKM
Holds a bachelor’s degree in Business
Administration from RISEBA University and MBA
from IESE Business School
Rafael Do Valle Correa
Country Manager Brazil
18+ years of experience
Previously served as COO in Rebel
Built and ran operations from scratch
Had extensive experience in strategy consulting
(Accenture, Integration Consulting)
Graduated from Stanford Graduate School of
Business
Jose Manuel Novo
Head of Legal & Compliance
Served 11+ years as a senior lawyer at Roca
Junyent Law Firm in Barcelona.
In 2004, graduated law studies at the Faculty of
Law of the Complutense University of Madrid
(Spain)
Masters Degree in International Commerce from
the Business Faculty of the Complutense
University of Madrid in 2005
Marco Silva
Chief Operating Officer (COO) Moneyman Spain
15+ years of work experience in Banking
Previously held senior Credit & Collections roles at
CitiBank and Ricoh
Holds an eMBA from Universitat Oberta de
Catalunya
Selection of product, loan
size, duration, etc
Seamless User Experience
Automation facilitates great user experience in a cost effective way
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Loan Selection Application Decision
Basic information required:
► personal data
► employment
98% of loans decisions are
made instantaneously
Easy and convenient
disbursement options,
including direct debit, card-to-
card, e-wallets, etc
OCR – Google Vision
Parsing ID number from ID
documents
Matching with ID number
provided by clients
Know Your Customer
Identity verification
Fraud detection
90% of customers who repaid first loan took a second one
Disbursement
87
115
152
199 204
247
339
411
453
512528
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Spain Brazil Mexico
Leading Brand In Spain and Latin America
Proven methodology for becoming highly recognized brand in very short period of time
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# of Brand Searches (‘000)
100% 100% 100%
83% 86% 95%
86% 93% 96%
89% 95% 98%
Loyal Customer Base with 90% Retention Rate
Constantly innovating to capture and maximize customers’ lifetime value
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High retention is key for profitability
Conversions to repeat clientsID Finance focuses on retention of high value clients
Products are customized to fit clients’ need
Collecting data, monitoring relationship, quickly
addressing problems
Propensity score matching based on machine learning
Loyalty programs and bonuses
Constantly develop and offer innovative products
1st loan
2nd loan
3rd loan
4+ loans
Core of Our Business – Artificial Intelligence (AI)
ID Finance is well positioned for global expansion
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Quality assurance
IT team (IDF Technology) is a resident in Hi-Tech Park in
Belarus - one of the leaders among innovative IT clusters in
Europe
Business Analysts
Chief Technical Officer
Developers
IDF Technology: IT team
Security
System Administration
Portfolio management
Chief Risk Officer
Data science
IDF Lab: Risk and Data analytics team
186people
employed
39people
employed
AI expertise
Data science team (IDF Lab) is expert in statistics, data
analysis, machine learning and related methods. A resident
in Hi-Tech Park in Skolkovo (Russia)
Financial modelling
Efficient org structure:
Developers
Quality assuarance
Business analysts
CRM support
Security issues
Regular back-ups
Adapt to changing fintech market
conditions faster than competitors
One of the leading IT
innovation hubs in Europe
Our services available for
thousands of active mobile users
Focus on user-centric approach, usability,
visual design
IDF Technology: State-of-the-art Proprietary IT Platform
One of the largest IT companies in Belarus
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Web and Mobile
Application
High Technology
ParkTechnology
Dedicated
Development
Team
Flexibility
Ongoing IT-
support
#Top25 IT companies in
Belarus
13 years of experience in software
development
Former Lead developer at Itransition
Graduated from Belorussian State
UniversityChief Technical Officer
Pavel Shareyko
186people
employed
Rating models covering life cycle
In house Web analytics module
Credit history consolidation
Client card transactions information
Application inconsistencies
Phones information
Device analysis and identity
Browsing history and searches
Service behavior information collection
10000+ data points collected
IDF Lab: World’s Best Practices in Risk Management and Data Science
IDF Lab controls the entire customer journey through highly efficient risk management
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Global solutions
Local solutions
Scoring and fraud-analysis
Client acquisition
Pre-collectionsCollections
Legal support
Fraud prevention
Risk management at every step of client cycle Data driven approach
Client management
Chief Risk Officer (CRO)
Ekaterina Kazak
Proprietary scoring engine analyses data, identifies
anomalies and increases risk assessment efficiency by 50%
39 people
employed
10+ years of work experience in risk
management
Previously worked as Head of Russia &
CIS Experian Analytics
Graduated from Moscow State
University of Economics, Statistics and
Informatics
Financial Highlights: Group
Fascinating historical quarterly issuance growth of 35% in 2015-2018. Future quarterly growth rates expect to be at 13% up to 2023
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Gross Revenues (US$ mm)
Gross Portfolio (US$ mm)Issuance (US$ mm)
Annual issuance more than doubled in 2018
Gross portfolio doubled in 2018
We aim to reach accumulated $1bn loan issuances in 2 years
that will bring us to $300m in annual revenues
Net profit breakeven is expected on a group level in 2020
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Highlights
Financial Highlights: Consumer Loans On the Focused Markets
Strong improving trend in 2018-2019 is expected to continue
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Gross Portfolio (US$ mm)1
0
10
20
30
40
50
60
70
80
90
100
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Both Gross Revenue and Issuance nearly doubled in 2019
Profitability in Spain expected to achieve $4m net profit for 2019
Positive unit economics already achieved in all countries
Operations 100% ready for scaling
Highlights
1 – all financials are presented for focused markets only: Spain, Brazil, Mexico
Revenue (US$ mm)1
0
5
10
15
20
25
30
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
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Alexander Dunaev
Co-founder, COO @ ID Finance
Thank you!
Boris BatinCo-founder, CEO @ ID Finance
Disclaimer
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• This document and its contents are confidential and may not be reproduced, redistributed, published or passed on to any other person,directly or indirectly, in whole or in part, for any purpose.
• This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in,any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would requireany registration or licensing within such jurisdiction.
• The information in this presentation has not been independently verified. No representation or warranty, express or implied, is made as tothe accuracy, completeness or fairness of the presentation and the information contained herein and no reliance should be placed on suchinformation.
• This presentation contains forward-looking statements, which include all statements other than statements of historical facts, including,without limitation, any statements preceded by, followed by or including the words “targets”, “believes”, “expects”, “aims”, “intends”, “may”,“anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknownrisks, uncertainties and other important factors beyond the company’s control that could cause the company’s actual results, performance orachievements to be materially different from future results, performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptions regarding the company’s present and future businessstrategies and the environment in which it will operate in the future. These forward-looking statements speak only as at the date of thispresentation. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions orcircumstances on which any of such statements are based.
