Is Kinnevik AB a Contrarian Gem at a 37% Discount to NAV?

Kinnevik AB (KINV-B.ST), a Swedish-based global investment firm with a 40-year track record of building and scaling tech-driven businesses, is currently trading at a 37% discount to its net asset value (NAV)—a rare opportunity for contrarian investors seeking exposure to high-growth assets at a value price. With a conservative balance sheet, a proven portfolio of winners like Zalando, and a disciplined capital allocation strategy, Kinnevik offers a compelling blend of venture capital-like upside and public market transparency. Here's why this discount could be your ticket to outsized returns.

The Discount to NAV: A Contrarian's Goldmine

As of July 2025, Kinnevik's NAV per share stands at 133 SEK, yet its stock price has dipped to ~92 SEK (July 11 closing price), representing a 37% discount—far exceeding the 20% threshold often cited as a “value” entry point. This widening discount, driven by sector-wide valuation contractions and macroeconomic headwinds, has created a stark disconnect between intrinsic value and market price.

The firm's NAV has held up remarkably well, rising 2% quarter-over-quarter to 36.8 billion SEK in Q2 2025, despite currency headwinds. The private portfolio's fair value grew 3% in SEK and 5% in constant currencies, underscoring resilience in core holdings like Travel Perk (which now annualizes $275 million in revenue) and Tandem Health, an AI-driven healthcare startup. Meanwhile, the public portfolio includes stakes in high-quality names like Zalando, Europe's leading online fashion retailer.

Why the Discount? And Why It's Temporary

The market's skepticism stems from three factors:
1. Sector Volatility: Tech and e-commerce valuations have fallen sharply in 2025, with companies like Recursion Pharmaceuticals (down 30% YTD) dragging down Kinnevik's NAV.
2. Currency Headwinds: A weaker USD and stronger EUR have reduced NAV by 0.7 billion SEK, amplifying fears about foreign exposure.
3. Multiple Compression: Peers trade at a 10% discount to Kinnevik's multiples, per CFO Samuel Sjöström, due to higher risk aversion in growth sectors.

However, these factors are either temporary or overblown. Currency impacts are a short-term drag, while the firm's 9.6 billion SEK net cash position provides a buffer against volatility. Moreover, the discount to NAV has historically been a self-correcting mechanism for Kinnevik: when the gap widens, the market eventually recognizes the mispricing.

A Portfolio Built for the Future

Kinnevik's strength lies in its dual mandate: deploying capital in high-growth private companies (e.g., Tandem Health's AI healthcare solutions) while maintaining stakes in mature, cash-generative public firms like Zalando. This mix creates a balanced portfolio with 30-40% revenue growth expectations in core holdings over the next 12 months.

Notably, Travel Perk, a corporate travel tech platform, has seen its valuation rise 7% in constant currencies this year, mirroring its earlier trajectory before a prior re-rating. This pattern suggests that patience with Kinnevik's holdings can pay off as markets reassess growth trajectories.

Risks to Consider

1. Valuation Sensitivity: Private company valuations remain volatile, especially in tech. A prolonged downturn could delay re-ratings.
2. Balance of Public/Private Exposure: While the public portfolio (e.g., Zalando) offers liquidity, private assets lack immediate exit options.
3. Currency Fluctuations: Continued USD weakness could further pressure NAV in the near term.

The Contrarian Play: Buy the Discount, Wait for the Re-Rating

For investors with a 3-5 year horizon, Kinnevik's 37% discount to NAV presents an asymmetric opportunity. The firm's conservative balance sheet, selective investment track record, and exposure to high-growth sectors like healthcare AI and SaaS make it a rare “value-growth” hybrid.

Actionable Takeaway:
- Buy: Accumulate shares at current levels, targeting a 10-15% discount to NAV as a long-term hold.
- Hold: Maintain positions if the discount narrows to 20-25%, signaling market re-engagement.
- Avoid: Proceed cautiously if valuation contractions in tech/e-commerce sectors persist beyond 2025.

Conclusion: A Discount That Demands Attention

Kinnevik AB's current valuation is an anomaly in a world of inflated growth stocks. Its discounted NAV, fortress balance sheet, and portfolio of next-gen tech assets position it as a standout opportunity for investors willing to look past near-term volatility. As markets rediscover the value of its holdings—think Travel Perk's scaling or Tandem Health's AI potential—the 37% discount could narrow sharply, rewarding contrarians who act now.

Disclosure: The author holds no position in Kinnevik AB.