Kinnevik has a well-defined process to source and assess potential new investments involving the Management Team, Investment Team and the Sustainability Function. Kinnevik’s Board of Directors is also involved in the investment process depending on the size of the investment and if the investment goes beyond our strategy execution plan.
In pipeline discussion meetings, the team takes a broader view of our target sectors and maps the opportunities in each sector. A small selection of companies is brought to stage one of the Executive Investment Committee (the “EIC”) and evaluated based on Kinnevik’s investment criteria. Kinnevik’s investment team only brings companies that fit our investment ethos to pipeline discussion meetings and to the EIC.
The most promising opportunities move on to stage two of the EIC. A key evaluation aspect is the quality of the team and the passion, drive and values of the founders. During this stage we also conduct thorough due diligence on the companies across key functions including among others, financial, legal, commercial and sustainability.
In the sustainability due diligence, companies are evaluated based on their performance and structures in relation to economic, social and environmental aspects, and the key risks and opportunities are identified. We use the Kinnevik Standards as a basis for the due diligence. It includes, among other aspects, human rights screening and a corruption risk assessment. In instances where potential investments do not adhere to relevant standards or are not considered to be likely to undertake the required improvements, Kinnevik refrains from proceeding with the investment.
When a portfolio company is seeking additional funding, they are evaluated again in stage two of the EIC and a key condition for follow-on investments is that the company has shown clear sustainability progress, including D&I, in accordance with their roadmap. Kinnevik’s Board of Directors oversees and conducts an annual evaluation of the EIC process.