Investors

WELCOME ON BOARD TO PRIVANET’S GROWTH STORY!

 

CEO’s review

The year 2017 was perhaps the most meaningful in Privanet’s almost two-century journey. We took our first steps in internationalization, when we established a close collaboration with Nordic Growth Market NGM Ab, owned by Boerse Stuttgart GmbH. It was sealed with a share issue directed to NGM Ab, through which NGM Ab became a significant shareholder of Privanet. In addition, we built a joint venture to Finland with Swedish FundedByMe Ab, with which also smaller growth companies can be helped to raise growth funding. We also laid the foundation to branches in our Spanish and Norwegian branches, whose operation we aim at beginning in the early part of this year.

Privanet’s strategy has clearly been sharpened during the year. Adapting financial technology even more closely to our internationalization and growth objectives has been in the core of the strategy. We have started investigations related to international trading of unlisted securities that is based on a blockchain technology, and regarding this business activity we have also started intensive negotiations with Business Finland. We have also started investigating utilizing an ICO (Initial Coin Offer) to offer a portfolio consisting of unlisted shares to the public. We have further made cooperation closer with some of our client companies, who have remarkable know-how related to financial technology in their possession.

The value path we offer to Finnish growth companies is in our opinion very close to the target that we had earlier set. It has been supplemented by growth funding offered to companies at their early stage (FundedByMe and Siltaraha Ltd) and at the final stage close cooperation with NGM Ab and Boerse Stuttgart GmbH. This way, listing on a multilateral trading facility is made possible for companies even a bit earlier and more cost-efficiently than people in Finland are used to.

We clarified the corporate structure of the group remarkably during the year. At the moment, both companies with business activities in the group, Privanet Capital Markets and Privanet Securities, are under a 100%-ownership of the group.

AN ENORMOUS SHARP TURN OF THE ECONOMY AND FAVOURABLE WINDS FOR CORPORATE FINANCING OUTSIDE THE BANKS – OUR NUMBER OF CUSTOMERS IS STILL GROWING STRONGLY

In the middle of the year, quite a sharp turn was experienced in GDP and its estimates. This may have been predictable from the boom in construction, but the change was sudden and sharp. Because of this, it is natural that confidence among companies is improving and they are ready to raise more growth funding and hire new builders of growth. Naturally, this has been visible in the numerous funding applications that we in Privanet have received. Our investing committee has been employed up to capacity, and more than ten companies are examined weekly. The number of our investor clients has continued its enormous growth as well, and there are already more than 16,000 of you. A warm thank you to all of you for your trust!

Beside the positive development of the economy, there are naturally other factors behind the strong development as well. Money faucets of banks have remained tightly shut for financing growth companies, even though some new hybrid instruments have arrived in the market. In these hybrid instruments the society and the bank are sharing risks. Investors are more and more interested in investing outside the stock market as well. Valuations in regulated markets are rather high, and finding interest returns almost impossible. In addition, investors see their responsibility for developing Finland by investing in employing and growing small and medium-sized enterprises.

PROFITABILITY OF BUSINESS IS IN THE TOP CLASS – A LOT OF NEW SHAREHOLDERS DURING THE YEAR

Business wise our year was a success story. Our turnover increased to 4,80 million euros, although at the end of the year we made a substantial, about 2,6-million once-only write-off related to investment targets that have developed negatively. Without the write-off our turnover would have increased as much as 59 per cent compared to the earlier accounting period. A warmest thank you to all of our employees for this. I again welcome all the new employees of Privanet to the company as well. During the year we got 15 new employees among us, now there are already 52 of us!

The growth of our crowdfunding service AROUND was still enormous, and 22,9 million euros of capital was collected through the service during the year 2017, meaning a growth of 67 per cent from the previous year. Our Realinvest service that collects debt investments came to light in the autumn, when its first financing round was carried out. All in all, 116 million euros of investments were made through Privanet, when our crowdfunding platforms, private placement investments and trading on our marketplace are combined.

The number of new shareholders increased 68 per cent during the year, and at the turn of the year Privanet had 2083 shareholders. Our share had the second largest trading volume in the First North Finland trading venue, and the interesting events around the company clearly attracted interest of the shareholders. Lastly, I want to thank the Board of Directors of the company for their excellent work for the company, and especially thank for the trust that I have got as a new CEO of the company since 1 October 2017. The beginning has been promising, and the belief in the future of the company is full of light.

Karri Salmi
Chief Executive Officer
Privanet Group Plc