SuRo Capital Corp (SSSS) 2016 Q1 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the GSV Capital first-quarter 2016 earnings conference call.

(Operator Instructions)

This call is being recorded today, Monday, May 9, 2016. I will now turn the conference over to Nicholas Franco, who is Vice President of GSV Capital. Please go ahead, sir.

Thank you for joining us on today's call. I'm joined today by GSV Chairman and CEO, Michael Moe, and Chief Financial Officer, William Tanona. Please note that a slide presentation that corresponds to today's prepared remarks by management is available on our website at www.gsvcap.com under investors, events and presentations.

Today's call is being recorded and broadcast live on our website, gsvcap.com. Replay information is included in our press release, issued earlier today. This call is the property of GSV Capital Corporation and any unauthorized reproduction of this call in any form is strictly prohibited.

I would also like to call your attention to customary disclosures in today's earnings press release regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial condition or results, and involve a number of risks, estimates and uncertainties.

Actual results may differ materially from those in the forward-looking statements, as a result of a number of factors including but not limited to those described from time to time in the Company's filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of GSV Capital's latest SEC filings, please visit our website at gsvcap.com or the SEC's website, SEC.gov. Now I'd like to turn the call over to Michael Moe.

Thank you, Nick, and good afternoon. We are pleased to share the results of GSV Capital's first quarter 2016. First, I'll review our portfolio as of March 31, 2016, then I will highlight some recent developments and update you on several investments. I will then turn it over to Chief Financial Officer, Bill Tanona, who will provide a brief financial overview, and lastly, open it up for some questions.

Let's start with slide 3. As of March 31, 2016, our net assets were approximately $243.1 million, or $10.96 per share. As mentioned last quarter, we made a distribution of $2.76 per share, comprised of approximately 50% cash and 50% common stock, which was paid on December 31, 2015. The overall market environment has been volatile, with NASDAQ dropping nearly 10% from January 1 to February 11, before ending up approximately flat at the end of the quarter.

We have also seen markdowns across the board for private companies. The good news is that this dynamic enabled us to acquire shares of Spotify last quarter at approximately a 25% discount to the Company's Series G financing in the summer of 2015. Also good news, the fundamentals of vast majority of our portfolio of companies remains quite strong.

The bad news is that we have been recorded some near-term markdowns to the portfolio as a result of these dynamics. Another example of the volatility in the private markets is Snapchat, an example is Snapchat, which we're proud to announce today that we acquired shares of Snapchat. We're now a shareholder of Snapchat at GSV Capital.

But just to put some context in terms of what's been taking place, last fall Fidelity Investments marked down its position in the company by 25% from $16 billion, to approximately $12 billion. In December, Fidelity marked the same position up 15%. Then in March, Fidelity invested $175 million in Snapchat at the $16 billion valuation work was to begin with.

We've done numerous studies over the past 20 years which consistently demonstrate a high correlation between sustainable growth and accretion enterprise value. Our philosophy confirmed by our research is that fundamentals drive returns. Accordingly, we will continue to focus on investing in companies with strong growth fundamentals and take advantage of great companies going on sale.

Please turn to slide 4. For the first quarter, our top 10 positions accounted for approximately 54% of the total portfolio at fair value, which is consistent with past quarters. GSV's three largest investments Palantir, Dropbox and Spotify represented approximately 25% of the total portfolio at fair value.

Palantir, the big data analytics and security company, remains the largest position in our portfolio. Palantir's platform is changing the way organizations use data, and it is deployed at critical government, commercial, and non-profit institutions around the world. According to the Wall Street Journal and Fortune, Palantir's $20 billion valuation makes the third most valuable VC-backed private company in United States, behind Uber and Airbnb.

In February 2016, Palantir acquired Kimono Labs, a Y Combinator startup that makes it easier to collect data from any public website. We continue to see strong momentum from Palantir and believe that the company will continue to transform the landscape of smart data. We marked down the price per share of our investment in Palantir from $9.24 per share at the quarter end of 2015 to $7.56 per share at quarter end 2016 to reflect secondary trades that took place in the quarter.

Dropbox, the leading cloud based storage, sharing and collaboration platform, is GSV's second largest position. At Dropbox Open London, the company showcased Project Infinite, which will enable users to seamlessly and securely access all Dropbox files from the desktop, regardless of space capacity on the hard drives Dropbox also recently announced and introduced features to simplify collaboration for users such as sharing files directly from Facebook Messenger and connecting with Acrobat Reader on Android.

Dropbox continues to be propelled by powerful network effects. In March, Dropbox announced that it has surpassed 500 million registered users and 3.3 billion connections made. Over 44% of new accounts were opened as a result of referrals and 75% of Dropbox users now reside outside the United States.

The company has coupled viral user growth with a dedicated enterprise strategy, announcing last November they had over 150,000 paying business customers. We anticipate the strategy will accelerate as Dropbox continues to target and divert the 8 million businesses that use this platform currently. We marked down the price per share of our investment in Dropbox from $16.94 per share at the end of Q4 2015 to $14.62 per share at the end of Q1 2016 to reflect declines in the markets.

Our third largest position is now Spotify, which is the disruptive music streaming platform that has approximately 100 million users and 30 million subscribers paying $10 per month according to The Financial Times. In 2015, CEO Daniel Ek revealed that more than 50% of Spotify users are under the age of 24, remarkably given this young demographic, 70% of Spotify's initial 2010 subscribers are still paying customers six years later. Spotify recently announced that it has expanded its offerings to include video content for smartphones in the United States, United Kingdom, Denmark and Sweden. At the end of March, Spotify brought its catalogue of 30 million songs to Indonesia, the next launch in Asia after a success in the Philippines in April 2014.

Spotify also acquired startups Soundwave and Cord Project in January to enhance its social and sharing capabilities. In late April, Spotify acquired CrowdAlbum, a startup that aggregates photos and videos from artist performances shared on social media. To date, Spotify has raised $1 billion funding from a syndicate of investors including Accel Partners, Founders Fund, Technology Crossover Ventures, and Goldman Sachs.

Our fourth largest position, Coursera, is the leading provider of massive open online courses, or what is referred to as MOOCs, and now has over 18 million learners on its platform. In March, Coursera achieved a noble milestone with its curriculum offering over a 1,000 active courses across 28 countries.

Coursera also announced a partnership with the University of Illinois at Urbana-Champaign, one of the top five computer science graduate programs in the United States, to form the first MOOC-based master's degree in data science. Coursera was founded in 2012 by Stanford professors Andrew Ng and Daphne Koller and is currently led by CEO Rick Levin, the former President of Yale University.

Lyft, the San Francisco-based ridesharing platform and GSV's seventh largest position, announced a new $1 billion Series F funding round in early January. The financing valued the Company at $5.5 billion according to Bloomberg. General Motors led the round with a $500 million investment, announcing a partnership with Lyft to create a network of on-demand, autonomous vehicles that will make transportation more affordable and accessible.

GM also announced that it would create a series of national rental hubs, where Lyft drivers can access short-term vehicles, unlocking new ways for people to commute without having to own a car. The GM relationship adds to the stable of high-value strategic partnerships Lyft has established in recent months, including alliances with Didi Kuaidi, GrabTaxi and Ola, the leading ridesharing platforms in China, Southeast Asia and India, respectively. Lyft recently announced developments in its partnership with Didi Kuaidi to launch a public beta for cross platform integration services in the United States and China and similar with Grab in the United States and Southeast Asia.

With broad first quarter volatility for public markets, we continue to have a slow IPO environment. If you extrapolate the current pace of IPOs, we'll finish 2016 with just 50 initial public offerings, which would make it the lowest level since 2009. For context, VC's has invested in 3,709 companies in 2015, according to the National Venture Capital Association, and by our estimate, there are over 2,000 VC-backed private companies with a market value of $100 million or greater. So in other words, this market opportunity that we saw with dramatically fewer IPOs and the VC's continue to invest, continues to be a tremendous basis for us to plan to.

Next turn to slide 5, where we break out our portfolio mix across growth themes as of March 31. Of the five key investment themes we've identified, cloud computing and big data is our largest commitment, representing 33% of the total portfolio at fair value. Education technology represents 30%. Social mobile is 18%. Marketplaces is 13% and sustainability 6% of the total portfolio at fair value.

Next please turn to slide 6 through 9 for highlights on our recent investment activity. In the first quarter, GSV made $6 million in follow-on investments including a $2.5 million follow-on investment Lytro, the pioneering light-field imaging platform. Lytro has redefined the way images are captured and created across a broad range of applications, from virtual reality to photography and filmmaking.

In April 2016, the company announced Lytro Cinema, a revolutionary all-in-one solution that offers filmmakers and television producers the creative freedom and flexibility to customize scenes while on the set and in post-production. Investors today include Andreessen Horowitz, NEA, and Greylock Partners.

Next, we made a $2 million follow-on investment in Curious.com, a lifelong learning platform that Forbes recently described as the Netflix for learning. With over 20,000 lessons on virtually any topic, Curious helps people master new skills from how to play the banjo to business communication. This learning engine is powered by leading cognitive science research, which demonstrates that people who stretch their brain for as little as 15 minutes per day are happier, healthier and more productive. In addition to GSV, Curious is backed by Redpoint Ventures.

Lastly, we made a $500,000 follow-on investment in GSVlabs. GSVlabs accelerates high-growth, high-impact startups across key verticals, including EdTech, sustainability, big data and mobile. It houses over a 150 startups, providing a broad range of support services and networking opportunities, with over 130 mentors, advisors, and corporate partners.

In February 2016, GSVlabs welcomed JetBlue Technology Ventures to GSVlabs, the first corporate venture capital subsidiary in the Silicon Valley backed US airline. ReBoot Career Accelerator for Women, another program at GSVlabs, was recognized in the Wall Street Journal for educating, inspiring and empowering women to restart their careers. It is expanding now to Chicago and New York City.

Subsequent to the first quarter end, as we previously mentioned earlier my comments, we're excited to announce a new $4 million investment in Snapchat, the highly engaging communication app in the emerging digital entertainment platform. It allows users to take snaps and videos to share with their friends and community. Snapchat has the highest engagement rates we have seen across any social media platform, more than 60% of the 13- to 34-year-old smartphone users are Snapchatters and over 10 billion videos are viewed every day. A fun interface and creative filters allows over 100 million daily active users to express themselves and essentially emulate face-to-face conversations.

Snapchat ranks among the top three iOS applications in the United States and has become increasingly prominent among Millenials, celebrities, sport teams and universities. Through its stories and discover features, users can see curated content of what their favorite celebrities are doing in real time. Snapchat has also partnered with the communities through its ads and snaps with code projects.

In addition, it has won deals with NFL, Major League Baseball, and NBC to show Olympic highlights from the 2016 games in Rio, the first time NBC has ever distributed highlights on any platform other than NBC-owned property. We believe that Snapchat is an extraordinary business and has the ability to deliver open ended growth potential. Investors today include Benchmark, Kleiner Perkins, Lightspeed Venture Partners, Coatue Management, IVP, Tencent Holdings, Alibaba, and as mentioned before, Fidelity.

Please turn to slide 10. In mid-April, we hosted the 2016 ASU GSV Summit, launched in partnership with Arizona State University six years ago, the summit convened key leaders from across the global innovation economy with the goal of improving educational outcomes through exponential ideas. Called the must-attend event for education technology investors by the New York Times, we welcomed over 3,700 attendees, including a wide range of entrepreneurs, investors, foundation leaders, educators, policy makers and CEOs of leading global companies.

Keynote speakers at our summit included Bill Gates; former Secretary of State Condoleezza Rice; Khan Academy Founder, Sal Khan; and business visionary, Jim Collins. Also closing off the summit, we had General Stanley McChrystal, we had Common, and many others. Over 300 of the most important education technology companies of world presented.

As I mentioned earlier, education technology comprises 30% of GSV's portfolio at fair value. The summit provides a window to future opportunities for GSV Capital and as a platform to accelerate the investments we've already made. You can find the videos of the summit at gsv.com/youtube. Additionally, GSV will host its third Annual Investor Day on June 1 at GSVlabs in Silicon Valley. We have a great lineup of portfolio company CEOs presenting, and our CFO, Bill Tanona, will talk more about it. Thanks for your attention. With that, I'm going to turn over to CFO Bill Tanona.

Thank you, Michael. Today, I will briefly provide a financial overview following an update on our current liquidity position. Now turn to slide 11 for the financials as of March 31, 2016.

We ended the quarter with an NAV per share of $10.96 per share. As you can see in slide 11, a quarter-over-quarter breakdown of the change in NAV is shown that is consistent with our financial reporting. In sum, the $1.12 per share decline in NAV was driven by an increase of $0.02 per share of net investment income, primarily due to the reversal of incentive fees, net realized losses of $0.27 per share, and a net change in unrealized depreciation of investments of $0.87 per share.

Notable highlights from GSV's portfolio activity include the monetization of a portion of our position in Lyft at an average net price of $25 per share, recognizing approximately $1 million of net realized gains, resulting in a 62% IRR. We also exited our position in Bloom Energy at an average net price of $14.75 per share, generating approximately $3 million of proceeds and approximately $900,000 in net realized losses.

In January 2016, Gilt Groupe sold for $250 million to Hudson's Bay Company, the parent company of Saks Fifth Avenue. We exited our position in Gilt Groupe at an average net price of $1.72 per share, resulting in approximately $400,000 of proceeds and approximately $6 million of net realized losses. Subsequent to quarter end, we made another partial monetization of Lyft at an average net price of $24 per share, recognizing approximately $400,000 of net realized gains.

Our liquid assets ended the quarter at approximately $41 million, consisting of $4.4 million of cash, $18 million of unused borrowings under the credit facility, and $18.7 million of public securities not subject to lock-up agreements, approximately $134,000 of which are subject to periodic sales restrictions.

Please turn to slide 12. We look forward to hosting our Annual Shareholder Meeting and Investor Day on June 1, 2016, at GSVlabs in Redwood City, California. Our Investor Day will provide insight into GSV Capital's investment strategy and performance as well as emerging themes in the global growth economy. Senior executives from our portfolio companies Coursera, PayNearMe, Enjoy, Lytro, OZY, JAMF, GSVlabs, Upwork and Curious have all confirmed as presenters.

We appreciate our stockholders' support in GSV Capital, and we would continue to strive to add value to our stockholders. That concludes my comments, so we'd like to thank you for your interest. I'll now turn the call over to the operator to start the Q&A session.

Thank you.

(Operator Instructions)

We'll now go to Merrill Ross with Wunderlich.

Hi, good evening, good afternoon. I'm wondering as you look at your portfolio what you think is the most miss-priced security that you own? Well, maybe the top two or three - looking to isolate just one, and I'm just trying to get an idea of where you think the markets got it wrong?

Well, first of all, what's reflected in our NAV is a process we go through to have each security in the portfolio priced at the fair value, and it's a process that we go through at the end of every quarter. And I'll just describe real quickly that it's a very rigorous process that we at GSV go through every security. We have a process that we go through systematically that our auditor [Del Letuse] looks at and believes it's the appropriate process. Also Independent Board, then has hired an outside evaluation firm, Andreessen Tax, it also goes through its own process. And so looks at each security, when there is a major discrepancy, ultimately the Independent Board makes the decision what appropriate way to reflect that on the balance sheet.

That said, and then that's all -- the answer is if I heard your question -- what's in our portfolio, what's the price? We think we've priced everything appropriately according to the process in the way that we do it. That said, I believe that growth investor could arguably look at a number of our positions and see the growth and the future cash flows discount back to day and say, these are positions at they would pay higher price for. And again, I think the mark down that you saw in the quarter, primarily in positions where there is secondary trades being made, I think the overall point is that it's definitely a buyer's market. I think it started last fall and just the variety of factors here, you've seen softness in terms of both buying and pricing in the private marketplace.

And so that's in positions like Palantir and Dropbox, these are companies that we think have great fundamentals, but there were trades -- we done that kind of reflect where we're carrying them. We wouldn't be selling shares at those prices and we think the long-term outlook is tremendous. But I'd say I think just as a general point, I think we see situations where our portfolio overall is growing over 100% year over year in terms of revenue growth. And predominantly what impacts this short-term or the quarterly evaluations is that there's a financing done or the terms are known, or if there is a secondary trade or the terms are known or if there is a change primarily a bad fundamentals in the -- in terms of the operating performance.

So a company that's growing really fast that hasn't had a financing done or the secondary trade in 12 months to 18 months, we think could be -- we think they're probably pretty good upside, in terms of what or somebody might look at that. So I mean, again, I think we're very pleased with number of the portfolio that we've got and we think the represented value. So I don't, I think that's the best answer I can really give you. Like we could talk about specific names and sort of the fundamentals of it, but we look at out top ten positions and we think that they're tremendous in the terms of the fundamentals. We look at other situations, I referenced GSVlabs before, I mean, GSVlabs as you can tell by the name, is an unusual situation for us. Because what we predominantly will do is invest in later stage VC backed private companies and GSVlabs is obviously started from scratch.

And the good news, we think about GSVlabs is, one, GSV Capital shareholders own 75% of GSVlabs. And the second good news about GSVlabs is, we think there's extraordinary opportunity and potential with it. So we keep it on the books is slightly less than cost, we think the potential is enormous; but that will be played out over time.

We'll now take our next question from Jon Hickman with Ladenburg.

Hi Mike. Couple of questions. The Snapchat was that, that wasn't a financing, you did that in the secondary market place?

Correct.

Okay.

I mean, I'll take that back.

It was a --

I'll answer it correctly.

It was a primary investment in the Series F, Jon.

Okay. So it was primary investment, okay. Then tell me, I want to follow-up on your comments about GSVlabs. So how do you plan to -- what's the strategy overtime to monetize that? I mean how are you going to make money there, off the equity investments that you are supporting or what? Can you talk about that?

So GSVlabs, let's kind of go through the quick business model. So it's an innovation center. Large center 70,000 square feet based in the heart of Silicon Valley. Different revenue sources, the startups pay a fee to locate there -- think that's like kind of a WeWork's model. And if you familiar with WeWork's, instead of how to grow this business, we have corporate sponsorships that basically want to get access to innovation.

Some are based in GSVlabs [some just monitor] so, for example, Intel resides there, JetBlue airlines, we mentioned, has an office there and others. A number of corporate sponsors -- that's another revenue source. There's advance in other kind of educational programs that go on. So, ReBoot was mentioned, which is basically helping women that primarily left the workforce to raise kids that came back, that's been a really successful program; that's an educational program.

And the last piece of the model, which is frankly the most exciting piece, is getting equity in the businesses that house there. And that is something that we think we'll -- the first phase we had to fill the building. But I think increasingly that would be an important opportunity at lottery tickets in those businesses that our GSVlabs, as I mentioned, is over 150 of them today. In addition to that, we have interest to create, to partner and put GSVlabs all over the United States and all over the world. And so we are -- so we think that there is going to be tremendous opportunity to put GSVlabs in places like India and I think we'll -- we're very soon going to be announcing more about that.

China, another parts of United States and so both at same [mile] that we just talked about in terms of the different revenue sources, the equity, the lottery ticket upside, and a growth strategy where I think you could see this be a pretty -- pretty important. If we execute -- I would tell you about GSVlabs, I think it's the opportunities is very open ended. And things are coming out as are incredible and so for us, the most important thing as we do is we execute. And part of that execution is the startups that we bring in, we really help them bring to life. We help provide the kind of knowledge, resources, and so forth, so they are successful. If we're able to prove that out and there is no stopping and I think the opportunity to monetize our investment, GSVlabs, whether it is to take GSV Labs public or to sell, or to other groups that that have an interest in those type of cash flows and upside; I think there is a lot of different ways to monetize our investment.

We'll now take a question from Brian Murphy with Meridian Capital.

Hi, thanks for taking my question. Mike, you alluded to a gap between some negative sentiments and in many cases strong fundamentals. I know you marked on a Palantir position based on secondary trades, but I'm wondering hoping to get your view on Palantir's fundamentals and specifically you could comment on the recent buzzfeed piece. Because, I'm wondering how to parse that information the reporter seemed to focus on a few customers baulking at the high price point of the technology, which would be a concern, but they are actually very positive data points in that piece, which apparently was derived from internal documents -- one reference to deal with BP where as $1.2 billion over 10 years. I'm just wondering, how do you feel about that and what is a deal like that imply for the value of their platform?

Yes. So first of all, I've always found it to be a mistake to comment on what reporters write, Joe Lonsdale, who is a Founder of Palantir and successful venture capitalist, I thought wrote very eloquent response to the Buzzfeed article. From our advantage point, we have a nice relationship with the company and we think, we couldn't be more pleased with how the company is doing. One of the key -- there is a couple of points I just make reference to, one is this kind of reference to losing people, so forth. And we think that, by the way, where talent's going is one of the greatest indicators in terms of what companies have it going on and what companies might be losing some momentum.

We haven't seen anything that would indicate the Palantir is not still one of the premier places in Silicon Valley to work. I mean it attracts incredibly talented people. Secondly, this reference to non-paying customers, I think is reference [indiscernible] some of this is like foundational work. But their core business is doing exceptionally well. It's an incredibly well positioned business, data science and big data, security -- there couldn't be three more important themes in terms of what businesses are looking for; and the solution that Palantir has been able to provide is exceptional. So, again, Palantir is our largest position, but we think the fundamentals would drive value and we think the fundamentals of Palantir are spectacular. So, that's our position.

(Operator Instructions)

We will go now to Ed Woo with Ascendiant Capital.

Yes, thanks for taking my question. Mike, being in a heart of silicon valley, what are you seeing, what's the pulse of everybody now? Do you [think they're as] optimistic as they were six months ago, or do you think people are just kind of just holding down the floor?

Yes, I mean, I think the optimism in Silicon Valley remains very high. And I think it's high because despite some of the skepticism of others, the innovation economy is flourishing, if anything you're seeing to accelerate. And so, there is no question that you're going to see pauses in terms of new capital coming to opportunities and valuations and such. But we're seeing just extraordinary activity in terms of true innovation and really exciting new technologies addressing both critical issues as well as areas that society is going to embrace.

So, for example, we haven't talked much about, we talked about something that was in the SnapChat and the social media, but it's really transforming entertainment, but now you're looking at sort of this next wave of virtual reality. Virtual reality has been something that people have been looking for, for twenty years, but now you're actually seeing it to a place where you'll start to see it in commercialized -- in really exciting ways. So, I made reference in my comments to the company called Lytro, which we have made two investments in, but the technology that Lytro is bringing to the virtual reality party, is really, really compelling.

And again, I think you're seeing the optimism and enthusiasm about these technologies to be great. You didn't say it, but maybe [let me] contrast this a little bit with when the dot-com bubble burst in 2000, so 15 years ago. At that time, you have sort of a gold rush mentality and essentially you saw these businesses, that were nothing more than a business plan, being valued at very high prices overnight. What's going on today is radically different than that. And over the last 20 years, you've had a digital tracks have been laid, you've got 3.1 billion people on the Internet, you have got 2.6 billion smartphones, you've got an app economy that's robust. You got the cloud, which allows young businesses to scale very rapidly, very inexpensively.

You're seeing Moore's Law continuing to create an amazing opportunities to advance technologies. And so, you put this all in the mix and it's really excited. So, as well, you see kind of headlines and so forth that you say, gosh are people getting not as bullish. I think on the ground, people are as bullish as they've ever been. So, I think it's -- and we are too.

We will now take a question from Joseph Garner with Emerald Advisers.

Good afternoon, Michael.

Hi, Joe.

Hi. I had the privilege of being able to attend the Education Innovation Summit that you mentioned earlier on your prepared remarks and I've got to say it's a third year I've been there. And it's -- I have learned a tremendous amount each time I'm there. And you certainly see a lot of the innovation that you just referenced that's going on in the education space, and there is a little bit of drinking from the firehose. And just wondering from your perspective as somebody who's followed this company for quite sometime, what you kind of look at as your major takeaways from that event and some of the more compelling opportunities that you see in the education technology space?

Yes, thanks, Joe. And I very much appreciate you attending the event as you have last three years. And we do think it's a great thing for our shareholders to get a window to both what we're doing, but also the opportunities that we see in the marketplace. It's exciting to me. And one of the reasons why education technology is a core focus of ours and one of our key -- five key themes. As you start to see for the first time what I call, weapons of mass instruction. Businesses that going -- are going from an idea to reach a millions and tens and millions of people at breadth taking speeds.

So companies -- and so as I have made comments, there is 350 education technology companies that presented at the summit, which is drinking from a firehose, but you are seeing some common themes. One of those kind of key themes that you're seeing is the opportunity in life long learning. And the effect of what we call (inaudible) me-to-you, so no long longer you're going to fill up your knowledge tank at the age of 25 and drive off through life. You can continually need to replenish that with ongoing education, part of that just the dynamic world that we're in. Part of that is the fact that millennials are going to have 15 careers between the time they graduate from college and the time they retire. But, so companies like Coursera, which we referenced earlier, is our fourth largest holding.

Coursera, we think is a monster in terms what's going on there and the ways that they're going to be able to create enormous value for shareholders. Today, the primary way they're monetizing the network of nearly 20 million students is with certificates. But whether it's job placement or tutoring, or notes, or other kind of supplementary learning, corporate learning; that's going to be, we think huge. Company called Coursera, which is an investment of ours, is an note sharing business and a tutoring business, sort of a tutor on demand; think, Uber for learning -- growing very, very fast, very profitable. And we think just sort of the beginning of its growth curve and so we're very excited about Coursera.

Chegg is a public company, and you know, we have kept our position in Chegg despite being public and primarily because, we think it's dramatically undervalued with really strong fundamentals. And it's of situation where we just think the public market hasn't really taken the time to understand what's going on there. And that's not -- it's just the way the public markets can be, but ultimately markets are efficient. We think that it's going to reflect the value of what Chegg is creating with this online student graph. And so, we're a believer in the -- and the online business is growing very quickly with what we think is a world class management team.

So that's a business that we're excited about. Another one, and I'll just mention one more, I could mention a handful more, but just in the sake of time, I will mention Knewton. And what Knewton does is they're creating an online platform for students to get individualized learning on a per clip basis. And so effectively what they've done is, taken most of the world's educational content, digitized it and then Knewtonized it, which allows based on a per clip basis that this content, the educational content is getting personalized, individualized -- for where you're proficient, where you're deficient -- be able to give you a real time prescription, so you optimize your learning experience.

We think it's a big deal, revolutionary type of opportunity. And just last point I will make is -- the really good news is not only you're seeing this actually happen, when the knowledge economy where it's increasingly critical, but you're talking about the second largest market in the world next to healthcare. So, we're in the early innings in terms of these opportunities, but that's where we should be and you are seeing the models scale very quickly, which we think is going to be -- create enormous enterprise value. So thanks for the question and I'll will be glad to talk more in detail offline.

(Operator Instructions)

And I am showing there are no additional questions in the queue at this time.

Thank you very much again. We're very excited about what we see going on in the marketplace. We believe that our portfolio is doing well. And again, we think over time, the success of the portfolio, and the growth of the portfolio will translate into stock price. And so, we're going to work very hard at optimizing both for our shareholders and we appreciate your interest and look forward to following up with any questions you have post-call. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.