Founders Factory and G-Force launch Seed program for climate-focused startups

UK tech accelerator Founders Factory is joining forces with a European counterpart to launch the Founders Factory Sustainability Seed program. Launched in partnership with G-Force (the G is for Green) based out of Bratislava, Slovakia, the program will look to invest in and accelerate climate-tech startups.

The program will invest in entrepreneurs with startups that can reduce the world’s greenhouse gas emissions, speed up the transition to a circular economy, create sustainable housing and manufacturing solutions, as well as address climate-friendly mobility, food/feed production, and capturing/storing CO2 and methane.

The Program, run with G-Force largely out of Bratislava, Slovakia, will be operated in a “hybrid” manner: mixing remote and in-person support. The idea is that any eco-tech venture in any location in the world can apply and join the program.

Founders Factory’s partner in the Sustainability Seed program, G-Force, is being backed financially by a syndicate of Central and Eastern European investors including Boris Zelený (figure behind AVG, which sold to AVAST for $1.4bn), Marian Gazdik (Startup Grind), and early-stage investors Peter Külloi and Miklós Kóbor.

Startups selected program for the will get a Seed investment of up to €150,000, six months of startup support using Founders Factory’s team, as well as introductions to potential customers, partners, corporates, and investors.

Henry Lane Fox, Chief Executive Officer at Founders Factory, said: “By nurturing the disruption entrepreneurs are so good at creating we can design a better, more sustainable future for all. In partnership with G-Force, Founders Factory Sustainability Seed Program will be a leading pre/seed program committed to building and supporting the ventures that will have a positive impact on the world.”

Marian Gazdik, co-founding partner of G-Force, said: “Our ambition is to make G-Force, in partnership with the Founders Factory Sustainability Seed Program, into a world-class sustainability innovation hub, based in the heart of Europe.”

Expanding on the idea, Lane-Fox told me: “In this particular case, rather than being aligned to one individual corporate partner, which has been our model to date, we’re able to bring together a group of angel investors and make this more of a pure financial investor play. We think that actually suits this specific sector better. We will also be providing a bit more capital to those companies early on to make sure they can benefit from the program to the maximum degree.”

Gazdik added that by being based in the EU rather than the UK, the program will also be able to take advantage of some EU grant programs.

#business-incubators, #chief-executive-officer, #entrepreneurship, #europe, #european-union, #founders-factory, #greenhouse-gas-emissions, #partner, #private-equity, #slovakia, #startup-company, #tc, #united-kingdom

SOSV partners explain how deep tech startups can fundraise successfully

Startups developing so-called deep tech often find it challenging to raise capital for various reasons. At TechCrunch Early Stage: Marketing and Fundraising, two experienced investors spoke on the subject and advised startups facing a challenging fundraising path.

Pae Wu and Garrett Winther are both partners at SOSV and run the fund’s programs around biotech and hardware. SOSV doesn’t shy away from startups building complex technology, and because of this, Wu and Winther are well placed to advise on fundraising. They presented three key points targeting startups fundraising for deep tech applications, but the points are applicable to startups of any variety.

Before giving advice, the two acknowledged the nuances across the deep tech ecosystem and each industry. Their presentation is focused on general guidance applicable to nearly every startup.

Finding the right investor

The first point on Wu and Winther’s presentation sounds a bit self-serving but is based on solid advice. When building a deep tech startup, find the right investor, they said. This is general advice for startups, but according to these two, it’s even more important when building a company that might take longer for the investor to see a return.

In deep tech, it’s essential to think about founder-investor fit. And what we mean by this is understanding why an investor is even in VC in the first place. And what it is that’s driving you, the founder, to do what you do.

And so we look at this fit as a Venn diagram between founders who have a near maniacal devotion to wanting to solve a core systemic problem and investors that thrive on the unique risk profile that comes in deep tech. Because with deep tech, we’re talking about both technical risk, where maybe that insight that is core to the company merely proves that we’re no longer having to break any laws of physics to do whatever it is you’re trying to do. So there’s a big technical risk. (Timestamp: 6:09)

We, as investors, love to see methodical founders who can see the first step that will converge at the right moment of technical and business milestones.

Set obtainable goals

Breakthrough technology hardly came from sudden breakthroughs. As explained in this presentation, it’s critical to set obtainable goals that lead to the desired outcome.

#business-incubators, #deep-tech, #early-stage-2021, #ec-techcrunch-early-stage, #entrepreneurship, #events, #fundraising, #sosv, #startups, #tc, #venture-capital

Meet the startups competing in the Extreme Tech Challenge Global Finals on July 22

There’s not much that thrills us more than a startup competition — and we mean deep down in our bones thrilled. That’s why we’re beyond excited to host the Extreme Tech Challenge (XTC) Global Finals on July 22 starting at 9:00 am (PT). This event is virtual and free to attend — but you need to register for your free ticket.

We’re serious when we describe this particular startup competition as extraordinary. Why? This pitch throw-down is all about startups determined to power a more equitable, inclusive and healthy world, and we need more of that visionary thinking put into action.

The competition just to reach the finals was fierce. More than 3,700 startups — from 92 countries — applied across XTC’s competition tracks: Agtech, Food & Water, Cleantech & Energy, Edtech, Enabling Tech, Fintech, Healthtech and Mobility & Smart Cities. Learn more about XTC here.

You know they’ll bring the heat and present a finely tuned pitch. And they’ll need it to impress this panel of judges — all of whom focus on sustainable impact.

So, without further ado, meet seven of the world’s best purpose-driven startups as they vie to be crowned the Extreme Tech Challenge 2021 global winner.

AgTech & FoodTech: Wasteless, a patented fully automated AI solution that applies optimal markdowns in real-time — based on products’ expiration dates and other factors — to reduce food waste and increase profitability.

CleanTech & Energy: Mining and Process Solutions, a non-toxic, natural alternative to cyanide and acid for the extraction of metals in mining operations.

EdTech: Testmaster, a mobile app that helps secondary students in West African countries successfully pass their matriculation exams. “The best private tutor in one’s pocket” delivers short, intuitive and accessible exercises and tutorial videos.

Enabling Tech: Dot Inc., the maker of the first tactile monitor that enables STEM education, visual works and games for the 285 million visually impaired people worldwide. Dot Inc. is expanding its technologies to help all disabled people to access public information in smart cities through barrier-free kiosks and IoT infrastructures.

FinTech: Hillridge Technology has developed weather-based parametric insurance for farmers to help protect crop yields and livestock.

HealthTech: Genetika+ combines genetics, patient history and unique brain biomarkers to help people suffering from depression, thereby helping to save patients’ lives, physicians’ time and healthcare payers’ costs.

Mobility & Smart Cities: Fotokite helps public safety teams save lives with elevated and actionable intelligence at the push of a button. Fully autonomous and field proven, Fotokite solutions are used daily by firefighters and first responders to assess, visualize and document their incidents within seconds of arriving on scene.

The Extreme Tech Challenge Global Finals take place on July 22. Join us and thousands of people around the world for this free, virtual pitch competition. Register here for your free ticket.

#agtech, #artificial-intelligence, #business-incubators, #economy, #food-waste, #healthtech, #mining, #people, #smart-city, #startup-company, #tc

Golden Ventures raises $100M fourth fund and $20M opportunities fund

Canadian early stage venture firm Golden Ventures has raised its fourth fund, a $100 million pool of capital that it will use to invest in between 20 to 25 companies, as well as a $20 million ‘Opportunities Fund’ that it will use to make follow-on investments in standout performers among its portfolio. This is also the 10th anniversary for Golden Ventures, and its latest fund arrives at a time when the Canadian startup ecosystem looks healthier than ever, with a proliferation of angels emerging from past success stories, a number of new funds being announced, and unicorn valuations on significant funding rounds for multiple Canadian startups.

I spoke to Golden Ventures Founder and Managing Partner Matt Golden, and General Partner Ameet Shah about its plans for this fund, and about the Canadian startup and investment landscape in general.

“Over time, we’re certainly seeing more and more interest in institutional LPs, more and more interest in the Canadian ecosystem, which I think is a net positive,” Golden said. “Whereas before, the Canadian ecosystem was largely funded by Canadian institutions, so I think that’s really positive, because you have to sort of be judged on the on the world stage. And we’re starting to meet that bar as both an ecosystem and as a fund.”

Golden said that the game plan with this Fund IV doesn’t really change in terms of their investment targets; while Golden initially set out to invest primarily in companies working on software products for mobile devices, it eventually shifted to a strategy of backing North American seed stage, mission-driven founders working on venture-scale opportunities across a range of verticals and categories.

“I would say that over time, our ratio of deals, Canada to U.S., we’ve increased the number of deals on a ratio basis that we do in Canada versus the U.S., just by virtue of the fact that the Canadian ecosystem is on a terrific, high-velocity trajectory.” Golden said. “You’ve seen it coming, but I think it’s really starting to hit its stride now, with lots of founders with ‘big swing’ vision, and an increasing interest in capital playing in the ecosystem.”

Shah added that he also thinks we’re trending towards more startups that originate in Canada setting up nodes in different geographies in ways that make most sense for their talent needs, and vice versa.

“Post-COVID, a lot of companies may start here, but with the geographical boundaries just blurring, there’s really no reason they can’t set up locations in different centers of gravity and take advantage of other ecosystems’ competitive advantages,” he said. “We had one that recently set up a location in LA, as well as Toronto, capturing some the value of LA but also leveraging all the talent in Toronto as well. I think you’re gonna start seeing more and more of that, where things are moving more towards networks, and not just cities in general.”

As for this fund raise, it’s one of three recent Canadian early stage pools of venture capital to also include an ‘Opportunities Fund,’ which in each case has been described as a way for the firms to participate in later stage deals in their star portfolio companies that they wouldn’t otherwise be set up to invest in as an early stage investment organization. Golden Ventures is also introducing another new type of investment to its roster with Fund IV, however.

“There’s this concept, we call it ‘Angel allocation,’ […] it’s the idea that we can invest smaller checks, sort of 400-to-500 thousand, into companies where maybe the structure of the opportunity or of the deal may not fit what our core checks would be,” Golden explains. “That could be, for example, a case where there’s not enough room left in the round, or the valuation is outside of our core range, or maybe we’re learning about a completely new space that’s highly experimental — but we still have a high degree of conviction in the opportunity, in the people behind that opportunity, and the returns that it could generate.”

Funds for those investments will come out of the main Fund IV pool, but the majority will still be targeting those core 20-25 larger checks. Overall, though, both Golden and Shah emphasize that the primary goal of the fund at this stage is capitalizing on the growing trend they see of more opportunity emerging in the Canadian ecosystem, and the impact that’s having in terms of startups across North America.

“When you talk about who are the the top five to ten companies in Canada, for a long time, it was really the same group,” Shah said. “Now, you’ve got this new crop of people that have come in and feel like they’re still on an upward trajectory, and I think that’s just really exciting as well.”

#business-incubators, #canada, #corporate-finance, #economy, #entrepreneurship, #finance, #golden-ventures, #louisiana, #managing-partner, #matt-golden, #mobile-devices, #money, #north-america, #ourcrowd, #private-equity, #startup-company, #tc, #toronto, #united-states, #venture-capital

How to start a company in 4 days

Running a startup can be a complicated, difficult process fraught with pitfalls and ample opportunities to make mistakes. But the logistics of setting up a startup should be simple, because over the long run, complicated equity setups and cap tables cost more money in legal fees and administration time.

The logistics of setting up a startup should be simple, because over the long run, complicated equity setups and cap tables cost more money in legal fees and administration time.

My company, Pulley, has helped more than a thousand founders build their cap table and equity structure.

Here’s a tactical guide to get your startup running in just four days.

Day 1: Incorporate

It is now standard to incorporate your company at the seed stage itself. In the U.S., startups incorporate as Delaware C Corporations with 10 million authorized shares. This is the standard setup when you use services like Stripe Atlas or Clerky.

Post incorporation, you need to answer a few questions on how to grant equity to founders and future employees.

First, you should determine how you want to split the equity between the founders. There is no standard for doing so — some founders split shares equally, while others do 49/51 splits for control. Some founders even may have an 80/20 equity split because one founder spent an extra year on the idea.

At the end of the day, a good equity split is one that all founders find fair. If you can’t agree on a structure, you should have a deeper discussion on whether this is the right team to work with for the next decade or more.

#business-incubators, #cap-table, #column, #ec-column, #ec-how-to, #entrepreneurship, #funding, #fundraising-tactics, #startups, #stripe-atlas, #venture-capital

Yieldstreet raises $100M as it mulls going public via SPAC, eyes acquisitions

These days, investing goes way beyond the stock market. And in recent years there’s been a growing number of startups which aim to give more people access to a wider array of investment opportunities. Today, one of those startups has raised a significant round of funding to help it achieve its goals.

Yieldstreet — which provides a platform for making alternative investments in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that were previously only open to institutional investors — announced Tuesday that it has raised $100 million in a Series C funding round.

Former E*TRADE CEO Mitch Caplan, of Tarsadia Investments, led the round. Other participants include Alex Brown (a division of Raymond James), Kingfisher Capital, Top Tier Capital Partners and Gaingels. Existing backers Edison Partners, Soros Fund Management, Greenspring Associates, Raine Ventures, Greycroft and Expansion Capital also put money in the round, which brings Yieldstreet’s total raised to $278.5 million since its 2015 inception.

Milind Mehere and Michael Weisz co-founded Yieldstreet with the mission of making investing more inclusive for non-institutional investors. In an interview with TechCrunch, CEO Mehere declined to say at what valuation the Series C was raised other than to say “near unicorn.”

What he did share is that Yieldstreet has funded nearly $1.9 billion on its platform and has about 300,000 consumers signed up on its platform. That’s up from $600 million invested on its platform from more than 100,000 members in February 2019, at the time of its last raise. Also since that time, Yieldstreet has seen its investor base climb by 350%, he said. And this year, the company is expecting “over 50% revenue growth,” compared to 2020.

Image Credits: Yieldstreet

Since its inception, Yieldstreet says it has provided nearly more than $950 million in principal and interest payments to its investors.

And, both the number of investment requests and new investors surged by more than 250% from January to April 2021 compared to the same period in 2020, with new investors already exceeding all of last year, according to the company.

Mehere also shared that Yieldstreet is considering going public via a SPAC (special purpose acquisition vehicle) sometime in the next year or two.

“We are growing extremely fast and a few SPACs have approached us,” he told TechCrunch. “We are on a great path to potentially explore some of those options in the next 12 to 24 months. I think the public markets would be great for a company like Yieldstreet, purely because that gives you the visibility to expand your consumer growth but also gives you access to equity to pursue growth strategies such as potential acquisitions and other things.”

So far, Yieldstreet has acquired two companies (both in 2019): WealthFlex and Athena Art Finance. 

Some context

At a very high level, Yieldstreet aims to give consumers access to invest in asset classes outside of the stock market.

“These are investments that generate passive income. For example, we do a bunch of things in real estate such as financing warehouses, multifamily and distribution centers,” Mehere told TechCrunch. “We also do art, auto loans or equipment finance. These are typically investments done by institutions and what we’re trying to do is really fractionalize them and get them to real estate investors. A lot of this stuff is asset-backed and it’s generating cash flow.”

In an effort to help people understand just exactly what they’re putting their money into, Yieldstreet aims to provide “a ton of investor education,” Mehere added, in the form of content such as articles, blog posts and infographics.

The company also aims to have its portfolios working “around the clock” to automatically apply earned income toward everyday expenses — a concept conceived by Mahere as “self-driving money.”

Yieldstreet will use its new capital to expand its user base, develop new investment products, explore international expansion and pursue strategic acquisitions, according to Mehere. Outside of its New York City headquarters, Yieldstreet also has offices in Brazil, Greece and Malta.

“Alternative investing has generally been restricted to very high net worth individuals. This is not just a U.S. problem, but a worldwide one. In Europe, especially, it is exacerbated by a negative interest rate,” he said. “So it’s even more compelling to them to tap into U.S. assets.” As such, Yieldstreet plans to expand into Europe and Asia as part of its growth strategy.

Tarsadia Investments (and former E*TRADE CEO) President Caplan believes the company is “uniquely positioned” to “achieve significant growth in revenue while ultimately achieving tremendous scale.”

“Everything begins and ends with the management team,” he told TechCrunch. “Yieldstreet’s management team’s vision for the future of digital investing aligned perfectly with that of our organization at Tarsadia. Yieldstreet is building the future of investing.”

#apps, #asia, #brazil, #business-incubators, #economy, #edison-partners, #entrepreneurship, #etrade, #europe, #finance, #fintech, #funding, #fundings-exits, #greece, #greenspring-associates, #greycroft, #growth-capital, #impact-investing, #investment, #investors, #malta, #money, #private-equity, #raine-ventures, #real-estate, #recent-funding, #soros-fund-management, #startup-company, #startups, #tarsadia-investments, #venture-capital, #yieldstreet

Seed-stage accelerator Flat6Labs closes $13.2M fund for startups in Egypt

Investment activities in Egypt continue to gain steam, not for startups only but also the funds backing them. Today, seed accelerator Flat6Labs announced the second close of its Egypt fund to support early-stage startups and provide follow-up investment. The fund had a target for EGP50 million (~$3.2 million) but eventually closed at EGP207 million ($13.2 million).

Launched in 2011, Flat6Labs is a regional seed accelerator with offices in Egypt and Tunisia. The accelerator launched its Cairo programme in 2017 to invest in more than 100 startups across Egypt over the course of five years. Startups that get into the accelerator are provided with office space, legal and marketing help, and access to mentorship and networking, among other perks. They also receive between EGP500,000 and EGP750,000. However, with the close of this round, Flat6Labs has increased the check sizes to EGP1.5 million (~$95,000) and up to EGP3 million (~$191,000) in post-programme follow-on funding for selected startups.

The International Finance Corporation (IFC), the MSME Development Agency, Egypt Ventures, and the Egyptian American Enterprise Fund are the anchor investors in Flat6Labs’ seed fund. Sawari Ventures, which recently closed its $71 million fund, also participated in this second close, and it comes as no surprise because the firm, which is highly affiliated with the accelerator, said it would set aside 10% of its fund for Flat6Labs seed-stage companies when we covered them in April.

“At Sawari Ventures, our fund strategy has always been to allocate a percentage of our fund to the seed stage, which is a completely different proposition in terms of process, culture, and support needed,” Wael Amin, managing Partner at Sawari Ventures, said in a statement. “As investors in Flat6Labs Accelerator Company, we get the opportunity to profitably participate in Egyptian companies at a very early stage, get early indicators on ecosystem trends, and visibility into the ecosystem.”

The second close of Flat6Labs’ fund is the latest of four venture capital funds targeted at Egyptian startups. Shortly after Sawari Ventures’ close, Algebra Ventures announced launching a $90 million second fund. Subsequently, GIZ Egypt launched a €100 million funding programme to provide up to four MENA-based fund managers between €25-30 million and is exclusively targeted at Egypt-based startups.

Flat6Labs is one of the continent’s active and well-known seed-stage accelerators. Just in Egypt alone, it has run seven cycles and invested in 62 startups. The venture capital firm and seed-stage accelerator provides a filter for some early-stage investors to source what companies to back or not. A good portion of startups in Flat6Labs’ portfolio has piqued investors’ interests, and half of them who have gone on to raise more money also received follow-up investment from Flat6Labs totalling EGP145,000,000 (~$9.25 million). Some of the startups in Flat6Labs’ portfolio include Welnes, Glued, CreditGo, and Docspert Health.

#africa, #algebra-ventures, #business-incubators, #cairo, #egypt, #flat6labs, #funding, #international-finance-corporation-ifc, #sawari-ventures, #startup-accelerator, #tc, #tunisia, #venture-capital

4 lessons I learned about getting into Y Combinator (after 13 applications)

For many founders, Y Combinator is a coveted milestone on the entrepreneurial road. As of January 2021, the accelerator has helped create 60,000 jobs, has 125 companies valued over $150 million, and has facilitated top exits totaling more than $300 billion. Past alumni include Airbnb, DoorDash and Coinbase — all of which are now publicly traded.

Unsurprisingly, the program has a strict selection process — with rumors claiming that less than 5% of startups are accepted, making Y Combinator one of the most prestigious accelerators out there. Competition may be fierce, but it’s not impossible, and jumping through some hoops is not only worth the potential payoff but is ultimately a valuable learning curve for any startup.

Y Combinator isn’t bluffing when it says it wants founders to make “something people want.”

The entrepreneurs trying to get into Y Combinator are often at an early point in their journeys and haven’t yet built up the experience to know exactly what kind of business can hit the ground running. This is where a harsh journey of trial and error helps entrepreneurs face the reality of their business model. Going through the Y Combinator program’s rigorous vetting gives founders a sense-check of what they’re missing, and who they’re missing. Take it from someone who applied to the program 13 times before getting in.

Of course, 13 applications require a degree of time and money that startups don’t always have, so I’ve condensed my four biggest takeaways from the experience. Here’s how to work toward landing in the small percentage of startups successfully accepted to the Y Combinator program:

Put your business value before your personal vanity

In a sea of applications, it’s easy to feel like you have to distinguish yourself and your startup in a striking way. For me, I made my mark through an encounter with Paul Graham, one of the founders of Y Combinator — although not in the way I had hoped for.

Graham had written a lot of online essays and resources for startups. In 2012, I thought it would be great to download Graham’s essays, browse by most-used words and publish my findings on Hacker News. However, Hacker News is the social news website run by Y Combinator, and the morning after I shared my work I woke up to an email from Graham asking me to swiftly take it down.

#business-incubators, #column, #ec-column, #ec-how-to, #entrepreneurship, #startup-accelerator, #startups, #y-combinator

8 investors, founders and execs predict cybersecurity, fintech will take Belfast by storm

Things have been looking up for Belfast since the end of the Troubles. The city has undergone infrastructure improvements over the past two decades, tourism has boomed thanks to attractions such as the shipyard where the RMS Titanic was built and Game of Thrones shooting locations, and employment has risen steadily in the city since 2016, according to Northen Ireland’s Department for the Economy. The city also has the famed Queen’s University and low living costs to count in its favor, and gentrification is starting to take place, which shows things are looking up for Northern Ireland’s capital.

And as far as the local startup scene goes, the U.K.’s Tech Nation found in 2018 that about 26% of Belfast’s workforce was employed in tech, and it is among cities in the country with the highest growth potential for 2021.

With that in mind, we reached out to founders, investors and executives in the city to get an inside look at the state of the current tech startup ecosystem. According to the survey, the city is strong in sectors such as fintech, agritech, hospitality tech, emerging tech, cybersecurity, SaaS and medtech. Ignite NI emerged as an important native incubator and accelerator.

Interesting startups that our respondents mentioned include: CropSafe, SideQuest, Aflo, Material Evolution, Cloudsmith, LegitFit, Continually, Gratsi, 54 North Design, Animal Manager, Kairos Sports Tech, Budibase, Incisiv, Automated Intelligence, loyalBe, Konvi, Lane 44, Teamfeepay.com, Axial3D, Neurovalens, Payhere, and Civic Dollars.


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The tech investment scene was characterized as being strong in software and life sciences, but sometimes too conservative or risk-averse. However, this seems to be changing for the better, and foreign direct investment (FDI) is an important growth factor for the ecosystem.

Although there remains uncertainty around how Brexit will affect Northern Ireland, one executive said, “If we play our cards right, we can capitalize on it. Being positioned both in the EU and U.K. markets gives us advantages that we would be foolish to waste.”

One of the founders foresees more private capital flowing into Belfast as global investors realize that “the combination of great local universities and very strong FDI has attracted some brilliant engineers.” The low cost of living is also encouraging for talent to stay put in the city, which makes for a tech scene that’s poised to take off, this founder added.

Here’s who we spoke to:

 

Cormac Quinn, founder & CEO, loyalBe

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
We’re strong in cybersecurity and (to an arguably lesser extent) fintech. I’m excited by the droves of new startups being created here in all sorts of sectors — traditionally, Belfast hasn’t had a lot of tech startups, but I can see that changing right before my eyes, which is very exciting. I always anticipated having to leave Belfast for the U.S. to be able to start a tech company, but I’m glad this is no longer a requirement or even the standard any more.

Which are the most interesting startups in your city?
There are a few that stand out: Cloudsmith (devtools), LegitFit (scheduling), Continually (chatbots/marketing), and Automated Intelligence (data management). This is certainly not an exhaustive list of interesting startups, just a few that come to mind.

What are the tech investors like in Belfast? What’s their focus?
Investors here can be somewhat conservative and slightly traditional. If you’re raising investment north of £1 million, you would likely need to look outside the jurisdiction. There also just isn’t enough private capital at the moment, which is a shame, as Belfast has some fantastic talent combined with a very low cost of living, which means investor money tends to go further (no crazy rents, reasonable salaries, etc.). It feels we’re at the beginning of a cycle in Belfast, however — I expect to see many more local exits over the coming years, which will likely lead to new private capital inflows.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
I understand the city was growing pre-pandemic, and I believe this trend will continue once life returns to a semi-normal state. For a long time, Belfast was a city people didn’t want to live in due to historical issues, but that has been slowly changing. New developments are popping up all over the city, from student accommodation to hotels and nice apartments. 15-20 years ago, Belfast had hardly any of this.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland, MD of Ignite NI: He’s a mentor on the city’s top accelerator program. Co-founded BrewBot.
Ian Browne, COO of Ignite NI: Entrepreneur and another mentor to startups in the city.
Mark Dowds: Venture partner at Anthemis, co-founder at Ormeau Baths (in my opinion it’s the city’s best co-working space).

Where do you see your city’s tech scene in five years?
We’re in uncertain times due to Brexit, but I think if we play our cards right, we can capitalize on it. Being positioned both in the EU and U.K. markets gives us advantages that we would be foolish to waste. I do think we will see more private capital flowing into Belfast as global investors realize that the combination of great local universities and very strong FDI has attracted some brilliant engineers. Combine that with the fact that cost of living remains quite low, which means their capital can go much further (rather than going to landlords) and you have a tech scene that’s poised for take-off.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
Cloudsmith.

Susan Kelly, CEO, Respiratory Analytics

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Cybersecurity, fintech, digital — strong medtech — needs building. Great incubator and accelerator in Ignite, but needs expansion to the Northwest where deprivation and poor infrastructure need to be addressed. Public funding supports are good, but too fragmented and hard to access.

Which are the most interesting startups in your city?
CropSafe, SideQuest, Aflo (my startup!), Material Evolution.

What are the tech investors like in Belfast? What’s their focus?
Too conservative, “stale, pale, male”, and risk-averse. But changing for the better, slowly. Legal’s far too costly. Needs to shift to a more U.S. type model. Too few women on the scene. Focus on software, which is great, but too risk-averse in hardware. Needs more experienced angel investors. Halo Business Angel Network feels staid.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Huge shift back to Belfast and Northern Ireland in general as a result of COVID.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Ignite NI is driving the startup scene via Propel (Pre-Accelerator) and the Accelerator — doing an amazing job. Clarendon, Techstart, various angels, and Catalyst. Big Motive is a key design engine.

Where do you see your city’s tech scene in five years?
With more support from Invest NI, the whole of Northern Ireland can be an innovation hub linked to Ireland via the startup ecosystem.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
CropSafe.

Ryan Crown, co-founder, Hill Street Hatch

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
We’re strong in the tech industry. We’re excited by changing how we launch hospitality ventures. Belfast is weak in investment and investors.

Which are the most interesting startups in your city?
Payhere, Civic Dollars, and Konvi.

What are the tech investors like in Belfast? What’s their focus?
We’re lacking proper investors in Northern Ireland.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
The cost of living and quality of life is fantastic in Northern Ireland/Belfast. COVID-19 will see a huge influx of people moving from expensive cities such as London, Manchester, or Dublin and relocating to Belfast.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland.

Where do you see your city’s tech scene in five years?
Booming.

Fearghal Campbell, founder, Pitchbooking

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Cybersecurity, SaaS, sportstech. Most excited by a range of early-stage tech companies — [there has been] an explosion in pre-seed and seed level companies over the past two to three years. Weaker at scaling up; relative lack of indigenous scale-up companies. Large number of foreign direct investment from U.S.-based companies into the city.

Which are the most interesting startups in your city?
In the sportstech sector, teamfeepay.com are growing fast. loyalBe are a seed-stage fintech company with big plans for reinventing retail loyalty programs that we always keep an eye on. Later-stage companies like medtech mainstays Axial3D and Neurovalens are doing great things too!

What are the tech investors like in Belfast? What’s their focus?
We have a mix of angel and institutional investors in Belfast. Hard to say a specific focus on a particular industry, but there are a couple of sectors that are strong in the city given the focus of the local universities. Medtech and cybersecurity both feature heavily in the startup scene.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Belfast benefits from a relatively low cost of living in relation to the rest of the U.K., meaning that we are seeing an increase in startups moving here from other major cities. The support for early-stage startups has also contributed to this influx. As a city, we are well set up for moving to a hybrid way of working. You can traverse across the center of the city in 15 mins on foot, which means popping into a city center office isn’t a big undertaking.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Invest NI – Government support agency.
Ignite NI – Seed-stage accelerator program.
UlsterBank Accelerator – Early-stage accelerator program.
Aurient Investments – Angel investment group with a diverse investment portfolio.

Where do you see your city’s tech scene in five years?
I believe we will see the strongest seed-stage companies from 2017-2020 becoming established companies within our tech scene to match the influx of FDI companies from further afield.

Jack Spargo, co-founder & CEO, Gratsi

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in: Fintech, agritech, hospitality tech, and emerging tech.
Most excited by: support (financial, mentoring, etc.) is available and the cost to build and grow is low.
Weakest in: geographical barriers to rest of UK and EU.

Which are the most interesting startups in your city?
loyalBe, Konvi, and Lane 44.

What are the tech investors like in Belfast? What’s their focus?
Great — good support and intros facilitated by accelerators such as Ignite NI, Catalyst, Techstart, Ormeau Baths, etc.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
More likely to move in: low cost of living and well set up for being remote already.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland and Ian Browne of Ignite NI; Mark Dowds of anthemis, and Cormac Quinn of loyalBe.

Where do you see your city’s tech scene in five years?
Stronger: a tech hub for the UK and the EU.

Brendan Digney, founder, Machine Eye Technology

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Agritech and Constuction tech are industries with huge potential, particularly in Ireland and Northern Ireland, where there are traditional strengths and the opportunity to influence based upon use of AI and data.

Which are the most interesting startups in your city?
Kairos Sports Tech, Budibase, Incisiv, and Automated Intelligence.

What are the tech investors like in Belfast? What’s their focus?
There are a number of VCs/funds that are generally linked to each other and Invest NI. INI is a big support and funder. Catalyst are a not-for-profit support who are possibly the most valuable in the whole system. Investment focus is generally around software and life sciences, although other funds are around. Strong focus on foreign and inward businesses.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
[People will] move out to rural areas within an hour’s drive of the city.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Catalyst, Ormeau Baths, and Raise Ventures.

Where do you see your city’s tech scene in five years?
Significant growth in the scene, with an expansion into more later-stage businesses.

Toyah Warnock, co-founder, Lane 44

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Belfast is a growing hub of fantastic businesses and funding opportunities.

Which are the most interesting startups in your city?
Gratsi, 54 North Design, and Animal Manager.

What are the tech investors like in Belfast? What’s their focus?
SaaS.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Belfast is inexpensive to live in. Many people will be moving in.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Ormeau Baths.

Where do you see your city’s tech scene in five years?
It will grow rapidly. Belfast is going through a period of gentrification.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
Lane 44, Animal Manager, and Gratsi.

Alan Carson, CEO, Cloudsmith

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in security, fintech, and medtech. Excited about devtools.

Which are the most interesting startups in your city?
Cloudsmith and Axial3D.

What are the tech investors like in Belfast? What’s their focus?
Small investor scene, but with an ambitious founder scene. Medtech and security are popular.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
No idea. Probably a bit of both.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Techstart Ventures, Ignite NI, Catalyst, Clarendon Co-Fund, Denis Murphy, Colm McGoldrick, and Alastair Bell.

Where do you see your city’s tech scene in five years?
Bigger and better than ever.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
VideoFirst.

#belfast, #business-incubators, #ec-europe, #ec-ireland, #europe, #fintech, #ignite-ni, #investor-survey, #ireland, #northern-ireland, #saas, #startups, #tc, #united-kingdom, #venture-capital

Black Innovation Alliance, Village Capital team up to support founders of color

Black Innovation Alliance and Village Capital today announced Resource, a national initiative aimed at boosting the efforts of entrepreneur support organizations (ESOs) led by, and focused on, founders of color.

The motivation behind the project is straightforward. ESOs “face record demand, declining resources and are chronically underestimated, underappreciated and underfunded,” the organizations say.

Resource aims to give local accelerators and incubators support in the form of training and community.

Resource’s “ESO Accelerator” will train startup ecosystem leaders on how to build a more financially sustainable organization, as well as help connect them to potential funders. It also will provide milestone-based financial support tied to organizational development.

Resource also plans to build a national community of practice among ESO leaders of color and their funders to share best practices and “develop stronger capital and mentorship pathways” for Black, Latinx and Indigenous founders across the U.S.

Village Capital, says CEO Allie Burns, supports and invest in entrepreneurs “who have been historically sitting in historical blind spots of investors, whether that’s by the problems they’re trying to solve, the geography they’re located in or demographic factors that we have seen lead to capital being concentrated in very few people, places and problems.” Village Capital has worked with more than 100 other ESOs to help grow companies with founders from all backgrounds over the past five years.

The goal with Resource is to help ensure that incubators and accelerators focused on supporting people of color have the resources they need to flourish, she added.

“We want to make sure that those accelerators and other ESOs have the financial, social and human capital to keep their doors open and grow,” Burns said.

Black Innovation Alliance Executive Director Kelly Burton points out that these Black-led organizations are often the first line of support for Black entrepreneurs yet reap few benefits from their success over time.

“They receive very little support and very little funding,” she said. “It’s almost like they do all the heavy lifting, they plant seeds and do all the cultivation but they don’t really get to benefit once that founder and that startup has really taken off. This is an opportunity for us to stabilize these organizations to help them build their own capacities and capabilities so that that organization can be sustainable.”

Resource is supported by a national coalition of funders committed to supporting entrepreneurs of color. The initial coalition includes Moody’s, The Sorenson Impact Foundation, Travelers and UBS.

In related news, on Tuesday we covered New Jersey Governor Phil Murphy’s proposal for a $10 million allocation in the state budget to create a seed fund for Black and Latinx startups.

In that piece, we noted that there are a number of organizations out there that are committed to funding diverse founders.

In February, several national and Chicago-based organizations banded together to support early-stage Black and Latinx tech entrepreneurs through a new program dubbed TechRise. The nonprofit P33 launched the program in partnership with Verizon and 1871, a private business incubator and technology hub, among others, with the goals “of narrowing the wealth gap in Chicago, generating thousands of tech-related jobs and giving $5 million in grant funding to Black and Latino entrepreneurs,” according to the Chicago Sun Times. (Disclosure: Verizon is TechCrunch’s parent company).

Also in Austin, DivInc is a nonprofit pre-accelerator that holds 12-week programs for underrepresented tech founders. Founded in 2016 by former Dell executive Preston James, the organization aims to “empower people of color and women entrepreneurs and help them build successful high-growth businesses by providing them with access to education, mentorship and vital networks.”

#black-innovation-alliance, #business-incubators, #diversity, #economy, #entrepreneur, #entrepreneurship, #funding, #resource, #startups, #techcrunch-include, #ubs, #village-capital

Startups book an expo booth at TC Sessions: Mobility 2021 to double down on connection and exposure

When it comes to fast-moving technology, mobility zooms ahead of the pack — both literally and figuratively. Early-stage startup founders and investors need to keep their fingers on the sector’s very rapid pulse and the best place to do that is, you guessed it, TC Sessions: Mobility 2021 on June 9.

If you’re eager to introduce your early-stage startup to the top leaders, investors, experts and policy makers across the mobility tech community, don’t just attend TC Sessions: Mobility — exhibit there. Double down on essential exposure and increase your opportunities.

Budget-friendly tip: The early-bird price remains active until May 5 at 11:59 pm (PST). Buy your Startup Exhibitor Package before the deadline hits and save 35 percent.

Talk about a rapt audience. One big reason people attend the show is to see and meet exciting, innovative new startups. A Startup Exhibitor Package lets you showcase your tech, build your network and expand your opportunities for growth and success. Here’s what your package includes (Note: They’re available only to pre-Series A, early-stage startups).

  • Virtual booth space: Display your pitch deck, host a video display and demo your products.
  • Lead generation: Track booth visitors for easy post-show follow-up.
  • Event passes: The package price includes four passes to TC Sessions: Mobility. Bring your team and increase your networking opportunities.
  • Full event access: You can tune in to all presentations on every stage.
  • Video on-demand: No FOMO for you. You’ll have VOD access to all presentations after the show ends.
  • Breakout sessions: Don’t miss these presentations, each with a special focus.
  • Networking: Whether you connect on the fly using the virtual platform’s chat feature or find specific people and schedule meetings using CrunchMatch, our AI-powered networking platform, you’ll make connections to drive your mobile business forward.

Keeping with the networking theme, this is how Karin Maake, senior director of communications at FlashParking, described her experience.

“TC Sessions: Mobility isn’t just an educational opportunity, it’s a real networking opportunity. Everyone was passionate and open to creating pilot programs or other partnerships. That was the most exciting part. And now — thanks to a conference connection — we’re talking with Goodyear’s Innovation Lab.”

Don’t miss your chance to sashay your superior stuff in front of the mobility industry’s leading mover, shakers and makers. Buy a Startup Exhibitor Package now, save 35 percent and get ready for TC Sessions Mobility 2021.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2021? Contact our sponsorship sales team by filling out this form.

#artificial-intelligence, #automotive, #business-incubators, #entrepreneurship, #flashparking, #mobility, #private-equity, #startup-company, #startups, #tc-sessions-mobility-2021

Launching Panoramic Ventures, Atlanta’s BIP Capital adds a new partner and plans $300 million new VC fund

The Atlanta-based BIP Capital has a new name for its venture capital operations (Panoramic Ventures); a new partner (Paul Judge); and is launching a $300 million new fund in its bid to plant a flag as the premier venture fund among the rising startup cities across the country.

Miami may have grabbed headlines recently as a new hub for venture capital and technology startups, but like other cities across the Southeast it’s lacked venture funds of a significant size since the early days of the dot-com bubble. Panoramic wants to be the fundraising destination for entrepreneurs outside of traditional tech hubs like Boston, Silicon Valley and New York as these new tech hubs emerge.

Atlanta, which already boasts several startup companies that have achieved billion-dollar valuations including Greenlight Financial and Calendly, has an equally burgeoning startup scene and an opportunity to become the central hub for venture capital investment in a region that encompasses several other rising tech hubs in the Southeast like Birmingham, Miami, Nashville, and New Orleans.

It’s a strategy similar to the one that Drive Capital has employed to become a leading fund in the Midwest and across the U.S.

Under the new partnership, which will include famed early stage Atlanta investor, Paul Judge, BIP Capital’s venture activities will operate under the Panoramic Ventures brand.

Should the firm manage to raise the $300 million it has targeted for Panoramic’s inaugural investment vehicle it would become the largest venture fund in the Southeast.

“It’s important to have a fund at that scale,” said Mark Buffington, a co-founder of BIP Capital and Panoramic Ventures. “You see the venture activity that is increasing in the region [and] one thing that’s been missing is a really active venture fund that can scale up as companies grow.”

Panoramic intends to be active at the seed stage while having the capacity to make investments in later stage venture backed companies as well, according to the two co-founders. And the firm will also try to focus on a more diverse group of entrepreneurs, thanks to the addition of Paul Judge.

Judge, a Black serial entrepreneur and investor, was the co-founder of the Atlanta-based voice recognition tech developer Pindrop, the Wi-Fi startup Luma Home, and security tech developer Purewire.  He’s also an investor several startups across the Southeast through his own venture initiatives, including Techsquare Labs and Judge sits on the investment committee for the SoftBank Opportunity Fund, focused on Black, Hispanic and Native American founders. His portfolio includes companies like LeaseQuery, Cove.tool, OncoLens and Eventeny.

About $125 million has already been soft-circled for the new Panoramic Ventures fund, which expects to work closely with some of the other investment firms that have cropped up or established a presence in the Southeast. That includes firms like Outlander Labs, founded by the husband and wife investment team of Paige and Leura Craig, and the LA-based firm, Mucker Labs, which has an investment partner working out of Nashville.

“There’s been an absence of this type of energy and this type of heft in a venture fund in Atlanta,” said Judge. “That’s the hole that we’ve been aiming to fill.”

Panoramic will invest in Seed, Series A, and Series B funding rounds, the company said in a statement. Investment areas will focus on include business-to-business software as a service companies, healthcare software, financial technologies, digital media, cybersecurity, and frontier technologies. 

#atlanta, #bip-capital, #boston, #business-incubators, #business-software, #calendly, #co-founder, #corporate-finance, #digital-media, #drive-capital, #economy, #energy, #entrepreneurship, #finance, #judge, #louisiana, #miami, #money, #mucker-labs, #nashville, #new-orleans, #new-york, #paige, #pindrop, #private-equity, #softbank-opportunity-fund, #startup-company, #tc, #techsquare-labs, #united-states, #venture-capital, #venture-capital-investment, #voice-recognition

Prime Movers Lab raises $245 million for second fund to invest in early stage science startups

After revealing its first fund just last year, a $100 million pool of investment capital dedicated to early stage startups focusing on sustainable food development, clean energy, health innovation and new space technologies, Prime Movers Lab is back with a second fund. Prime Movers Lab Fund II is larger, with $245 million committed, but it will pursue the same investment strategy, albeit with a plan to place more bets on more companies, with an expanded investment team to help manage the funds and portfolio.

“There are a lot of VCs out there,” explained founder and general partner Dakin Sloss about the concept behind the fund. “But there aren’t many VCs that are focused exclusively on breakthrough science, or deep tech. Even though there are a couple, when you look at the proportion of capital, I think it’s something like less than 10% of capital is going to these types of companies. But if you look at what’s meaningful to the life of the average person over the next 30 years, these are all the companies that are important, whether it’s coronavirus vaccine,s or solar energy production, or feeding the planet through aquaponics. These are the things that are really meaningful to to making a better quality of life for most people.”

Sloss told me that he sees part of the issue around why the proportion of capital dedicated to solving these significant problems is that it requires a lot of deep category knowledge to invest in correctly.

“There’s not enough technical expertise in VC firms to choose winners intelligently, rather than ending up with the next Theranos or clean tech bubble,” he said. “So that’s the first thing I wanted to solve. I have a physics background, and I was able to bring together a team of partners that have really deeply technical backgrounds.”

As referenced, Sloss himself has a degree from Stanford in Mathematics, Physics and Philosophy. He was a serial entrepreneur before starting the fund, having founded Tachyus, OpenGov and nonprofit California Common Sense. Other Partners on the team include systems engineer Dan Slomski, who previously worked on machine vision, electro-mechanical systems and developing a new multi-phase flow fluid analyzer; Amy Kruse, who holds a PhD in neuroscience and has served as an executive in defence technology and applied neuroscience companies; and Carly Anderson, a chemical engineer who has worked in biomedicine and oil & gas, and who has a PhD in chemical and biomolecular engineering. In addition to core partners with that kind of expertise, Prime Movers Lab enlists the help of venture partners and specialist advisors like former astronaut Chris Hadfield.

Having individuals with deep field expertise on the core team, in addition to supplementing that with top-notch advisors, is definitely a competitive advantage, particularly when investing in the kinds of companies that Prime Movers Lab does early on in their development. There’s a perception that companies pursuing these kinds of hard tech problems aren’t necessarily as viable as a target for traditional venture funding, specifically because of the timelines for returns. Sloss says he believes that’s a misperception based on unfortunate past experience.

“I think there are three big myths about breakthrough science or hard tech or deep tech,” he said. “That it takes longer, that it’s more capital intensive, and that it’s higher risk. And I think the reason those myths are out there is people invested in things like Theranos, and the clean tech bubble. But I think that there were fundamental mistakes made in how they underwrote risk of doing that.”

Image Credits: Momentus

To avoid making those kinds of mistakes, Sloss says that Prime Movers Lab views prospective investments from the perspective of a “spectrum of risk,” which includes risk of the science itself (does the fundamental technology involve actually work), engineering risk (given the science works, can we make it something we can sell) and finally, commercialization or scaling risk (can we then make it and sell it at scale with economics that work). Sloss says that if you use this risk matrix to assess investments, and allocated funds to address primarily the engineering risk category, concerns around timeframes to return don’t really apply.

He cites Primer Movers Lab’s Fund I portfolio, which includes space propulsion company Momentus, heading for an exit to the public markets via SPAC (the company’s Russian CEO actually just resigned in order to smooth the path for that, in fact), and notes that of the 15 companies that Fund I invested in, four are totally on a path to going public. That would put them much faster to an exit than is typical for early stage investment targets, and Sloss credits the very different approach most hard science startups take to IP development and capital.

“The inflection points in these types of companies are actually I think faster to get to market, because they’ve spent years developing the IP, staying at relatively low or attractive valuations,” he said. “Then we can kind of come in, at that inflection point, and help them get ready to commercialize and scale up exponentially, to where other investors no longer have to underwrite the difference between science and engineering risk, they can just see it’s working and producing revenue.”

Companies that fit this mold often come directly from academia, and keep the team small and focused while they’re figuring out the core scientific discovery or innovation that enables the business. A prime example of this in recent memory is Wingcopter, a German drone startup that developed and patented a technology for a tilt-wing rotor that changes the economics of electric autonomous drone flight. The startup just took its first significant startup investment after bootstrapping for four years, and the funds will indeed be used to help it accelerate engineering on a path towards high-volume production.

While Wingcopter isn’t a Prime Movers Lab portfolio company, many of its investments fit the same mold. Boom Aerospace is currently working on building and flying its subscale demonstration aircraft to pave the way for a future supersonic airliner, while Axiom Space just announced the first crew of private tourists to the International Space Station who will fly on a SpaceX Falcon 9 for $50 million a piece. As long as you can prove the fundamentals are sound, allocating money turning it into something marketable seems like a logical strategy.

For Prime Movers Lab’s Fund II, the plan is to invest in around 30 or so companies, roughly doubling the number of investments from Fund I. In addition to its partners with scientific expertise, the firm also includes Partners with skill sets including creative direction, industrial design, executive coaching and business acumen, and provides those services to its portfolio companies as value-add to help them supplement their technical innovations. Its Fund I portfolio includes Momentus and Axiom, as mentioned, as well as vertical farming startup Upward Farms, coronavirus vaccine startup Covaxx, and more.

#advisors, #articles, #astronaut, #business-incubators, #ceo, #chris-hadfield, #clean-energy, #corporate-finance, #deep-tech, #entrepreneurship, #executive, #falcon, #finance, #funding, #international-space-station, #machine-vision, #momentus, #money, #neuroscience, #oil, #prime-movers-lab, #private-equity, #serial-entrepreneur, #stanford, #startup-company, #startups, #tc, #theranos, #venture-capital, #wingcopter

Israel’s startup ecosystem powers ahead, amid a year of change

Released in 2011 “Start-up Nation: The Story of Israel’s Economic Miracle” was a book that laid claim to the idea that Israel was an unusual type of country. It had produced and was poised to produce, an enormous number of technology startups, given its relatively small size. The moniker became so ubiquitous, both at home and abroad, that “Israel Startup Nation” is now the name of the country’s professional cycling team.

But it’s been hard to argue against this position in the last ten years, as the country powered ahead, famously producing ground-breaking startups like Waze, which was eventually picked up by Google for over $1 billion in 2013. Waze’s 100 employees received about $1.2 million on average, the largest payout to employees in Israeli high tech at the time, and the exit created a pool of new entrepreneurs and angel investors ever since.

Israel’s heady mix of questioning culture, tradition of national military service, higher education, the widespread use of English, appetite for risk and team spirit makes for a fertile place for fast-moving companies to appear.

And while Israel doesn’t have a Silicon Valley, it named its high-tech cluster “Silicon Wadi” (‘wadi’ means dry desert river bed in Arabic and colloquial Hebrew).

Much of Israel’s high-tech industry has emerged from former members of the country’s elite military intelligence units such as the Unit 8200 Intelligence division. From age 13 Israel’s students are exposed to advanced computing studies, and the cultural push to go into tech is strong. Traditional professions attract low salaries compared to software professionals.

Israel’s startups industry began emerging in the late 19080s and early 1990s. A significant event came with acquisitor by AOL of the the ICQ messaging system developed by Mirabilis. The Yozma Programme (Hebrew for “initiative”) from the government, in 1993, was seminal: It offered attractive tax incentives to foreign VCs in Israel and promised to double any investment with funds from the government. This came decades ahead of most western governments.

It wasn’t long before venture capital firms started up and major tech companies like Microsoft, Google and Samsung have R&D centers and accelerators located in the country.

So how are they doing?

At the start of 2020, Israeli startups and technology companies were looking back on a good 2019. Over the last decade, startup funding for Israeli entrepreneurs had increased by 400%. In 2019 there was a 30% increase in startup funding and a 102% increase in M&A activity. The country was experiencing a 6-year upward funding trend. And in 2019 Bay Area investors put $1.4 billion into Israeli companies.

By the end of last year, the annual Israeli Tech Review 2020 showed that Israeli tech firms had raised a record $9.93 billion in 2020, up 27% year on year, in 578 transactions – but M&A deals had plunged.

Israeli startups closed out December 2020 by raising $768 million in funding. In December 2018 that figure was $230 million, in 2019 it was just under $200 million.

Late-stage companies drew in $8.33 billion, from $6.51 billion in 2019, and there were 20 deals over $100 million totaling $3.26 billion, compared to 18 totaling $2.62 billion in 2019.

Top IPOs among startups were Lemonade, an AI-based insurance firm, on the New York Stock Exchange; and life sciences firm Nanox which raised $165 million on the Nasdaq.

The winners in 2020 were cybersecurity, fintech and internet of things, with food tech cooing on strong. But while the country has become famous for its cybersecurity startups, AI now accounts for nearly half of all investments into Israeli startups. That said, every sector is experiencing growth. Investors are also now favoring companies that speak to the Covid-era, such as cybersecurity, ecommerce and remote technologies for work and healthcare.

There are currently over 30 tech companies in Israel that are valued over $1 Billion. And four startups passed the $1 billion valuation just last year: mobile game developer Moon Active; Cato Networks, a cloud-based enterprise security platform; Ride-hailing app developer Gett got $100 million ahead of its rumored IPO; and behavioral biometrics startup BioCatch.

And there was a reminder that Israel can produce truly ‘magical’ tech: Tel Aviv battery storage firm StorDot raised money from Samsung Ventures and Russian billionaire Roman Abramovich for its battery which can fully charge a motor scooter in five minutes.

Unfortunately, the coronavirus pandemic put a break on mergers and acquisitions in 2020, as the world economy closed down.

M&A was just $7.8 billion in 93 deals, compared to over $14.2 billion in 143 M&A deals in 2019. RestAR was acquired by American giant Unity; CloudEssence was acquired by a U.S. cyber company; and Kenshoo acquired Signals Analytics.

And in 2020, Israeli companies made 121 funding deals on the Tel Aviv Stock Exchange and global capital markets, raising a total of $6.55 billion, compared to $1.95 billion raised in capital markets in Israel and abroad in 2019, as IPOs became an attractive exit alternative.

However, early-round investments (Seed + A Rounds) slowed due to pandemic uncertainty, but picked-up again towards the end of the year. As in other countries in ‘Covid 2020’, VC tended to focus on existing portfolio companies.

Covid brought unexpected upsides: Israeli startups, usually facing longs flight to Europe or the US to raise larger rounds of funding, suddenly found that Zoom was bringing investors to them.

Israeli startups adapted extremely well in the Covid era and that doesn’t look like changing. Startup Snapshot found that 55% startups profiled had changed (or considered changing) their product due to Covid-19. Meanwhile, remote-working – which comes naturally to Israeli entrepreneurs – is ‘flattening’ the world, giving a great advantage to normally distant startup ecosystems like Israel’s.

Via Transportation raised $400 million in Q1. Next Insurance raised $250 million in Q3. Seven exit transactions with over the $500 million mark happened in Q1–Q3/2020, compared to 10 for all of 2019. These included Checkmarx for $1.1 billion and Moovit, also for a billion.

There are three main hubs for the Israeli tech scene, in order of size: Tel Aviv, Herzliya and Jerusalem.

Jerusalem’s economy and therefore startup scene suffered after the second Intifada (the Palestinian uprising that began in late September 2000 and ended around 2005). But today the city is far more stable, and is therefore attracting an increasing number of startups. And let’s not forget visual recognition company Mobileye, now worth $9.11 billion (£7 billion), came from Jerusalem.

Israel’s government is very supportive of it’s high-tech economy. When it noticed seed-stage startups were flagging, the Israel Innovation Authority (IIA) announced the launch of a new funding program to help seed-stage and early-stage startups, earmarking NIS 80 million ($25 million) for the project.

This will offer participating companies grants worth 40 percent of an investment round up to $1.1 million and 50 percent of a total investment round for startups in the country or whose founders come from under-represented communities – Arab-Israeli, ultra-Orthodox, and women – in the high-tech industry.

Investments in Israeli seed-stage startups decreased both absolutely and as a percentage of total investments in Israeli startups (to 6% from 11%). However, the decline may also be a function of large tech firms setting up incubation hubs to cut up and absorb talent.

Another notable aspect of Israel’s startups scene is its, sometimes halting, attempt to engage with its Arab Israeli population. Arab Israelis account for 20% of Israel’s population but are hugely underrepresented in the tech sector. The Hybrid Programme is designed to address this disparity.

It, and others like it, this are a reminder that Israel is geographically in the Middle East. Since the recent normalization pact between Israel and the UAE, relations with Arab states have begun to thaw. Indeed, Over 50,000 Israelis have visited the United Arab Emirates since the agreement.

In late November, Dubai-based DIFC FinTech Hive—the biggest financial innovation hub in the Middle East—signed a milestone agreement with Israel’s Fintech-Aviv. Both entities will now work together to facilitate the cross-border exchange of knowledge and business between Israel and the United Arab Emirates.

Perhaps it’s a sign that Israel is becoming more at ease with its place in the region? Certainly, both Israel’s tech scene and the Arab world’s is set to benefit from these more cordial relations.

Our Israel survey is here.

#app-developer, #artificial-intelligence, #biocatch, #business-incubators, #checkmarx, #computing, #dubai, #e-commerce, #economy, #entrepreneurship, #europe, #finance, #food-tech, #google, #healthcare, #insurance, #ipo, #israel, #jerusalem, #kenshoo, #lemonade, #microsoft, #middle-east, #mobile-game-developer, #mobileye, #money, #nanox, #ourcrowd, #private-equity, #roman-abramovich, #samsung-ventures, #startup-company, #tc, #technology, #tel-aviv, #united-arab-emirates, #united-states, #unity, #venture-capital, #venture-capital-firms, #waze

LAUNCHub Ventures heading towards a $85M fund for South Eastern European startups

LAUNCHub Ventures, an early-stage European VC which concentrates mainly on Central Eastern (CEE) and South-Eastern Europe (SEE), has completed the first closing of its new fund at €44 million ($53.5M), with an aspiration to reach a target size of €70 million. A final close is expected by Q2 2021.

Its principal backer is the European Investment Fund, corporates and a number of Bulgarian tech founders and investors.

With this new fund, LAUNCHub aims to invest in 25 startups in the next 4 years. The initial investment range will be between €500K and €2M in verticals such as B2B SaaS, Fintech, Proptech, Big Data, AI, Marketplaces, Digital Health. The fund will also actively invest in the Web 3.0 / Blockchain space, as it has done so since 2014.

LAUNCHub has also achieved a 50:50 gender split in its team, with Irina Dimitrova being promoted to operating partner while Raya Yunakova who joins as an Investor, previously working for PiLabs in London and Mirela Yordanova joins as an Associate, previously leading the startup community at Google for Startups Campus in London.

The investor is mining a rich view of highly skilled developers in the CEE countries where there are approximately 1.3 developers for every 100 people in the workforce. “Central and Eastern Europe’s rapid economic growth has caught the attention of Western investors searching for the next unicorn. The region has huge and still untapped potential with more and more local success stories, paving the way for the next generation of CEE tech founders.” said Todor Breshkov, Founding Partner at LAUNCHub Ventures .

LAUNCHub Ventures competes with other investors like Earlybird in the region, but they tend to invest at a later stage and is more typically a co-investor with LAUNCHub. Nearby Greece also features Greek funds such as Venture Friends and Marathon, but these tend to focus on their core country and diaspora entrepreneurs. Others include Speedinvest (usually focused on DACH) and Credo Ventures, more focused on the Czech Republic and CEE.

LAUNCHub partner and cofounder Stefan Grantchev told me: “Our strategy is to be regional, not to focus specifically on Bulgaria – but to look at all the opportunities in the region of South-Eastern Europe.”

LAUNCHub Ventures has backed companies including:

  • Giraffe360 (Robotic camera for real estate listing automation, co-investment with Hoxton Ventures and HCVC)

  • Fite (Premium direct to consumer digital live streaming for sports, followed-on by Earlybird)

  • GTMHub (The world’s leading and most intuitive OKR software, followed-on by CRV)

  • FintechOS (Banking and Insurance middleware for automation and digital innovation acceleration, followed-on by Earlybird and OTB)

  • Cleanshelf (Enterprise SaaS management and optimization platform, followed-on by Dawn Capital)

  • Office RnD (Co-working and flexible office space management, followed-on by Flashpoint Ventures)

  • Ferryhopper (Ferry ticketing platform for Southern Europe, co-investment with Metavallon)

#almaz-capital, #bulgaria, #business-incubators, #central-europe, #cofounder, #corporate-finance, #credo-ventures, #czech-republic, #eastern-europe, #economy, #entrepreneurship, #europe, #european-investment-fund, #google, #greece, #hoxton-ventures, #launchub-ventures, #london, #partner, #private-equity, #seedcamp, #startup-company, #tc, #venture-capital

Venture firm M13 names former Techstars LA managing director, Anna Barber, as its newest partner

The Los Angeles and New York-based venture firm M13 has managed to nab former Techstars LA managing director, Anna Barber, as its newest partner and the head of its internal venture studio, Launchpad.

Designed to be a collaborative startup company incubator alongside corporate partners, Launchpad focuses on developing new consumer tech businesses focused on M13’s main investment areas: health, food, transportation, and housing.

For Barber, the new position is the latest step in a professional career spent working both inside and outside of the tech industry.

Barber got her first taste of the startup world when she was poached from McKinsey to join one of the several online pet supply stores that cropped up in 1999. From her position as the vice president of product at Petstore.com, Barber got her taste of the startup world… and left it to become a talent manager and the co-founder of the National Air Guitar championships (no word if she managed air guitar talent).

Prior to launching the Techstars LA incubator program, Barber founded ScribblePress, a retail and digital publishing app, which was sold to Fingerprint Digital.

Anna Barber, partner, M13. Image Credit: Raif Strathmann

At M13, Barber will be working to recruit entrepreneurs to work collaboratively on developing startup consumer businesses that align with the strategic interests of M13’s corporate partners, like Procter & Gamble.

We will be bringing in founders in residence who will come in without an idea,” Barber said of the program. “We’re starting with a blank sheet of paper and building teams in partnership with entrepreneurs and in partnership with corporate partners who will bring their perspective and their IP. “

The EIRs will receive a small stipend and equity in the business, Barber said.

The starting gun for M13’s Launchpad  program was in 2019 and the program currently has managed to spin up three startups. There’s Rae, an developer of affordable women’s wellness products; and the beauty tech company OPTE; Kindra menopause products; and Bodewell for sensitive skin care, which were all developed alongside Procter & Gamble Ventures.

M13, for its part, is developing a strong team of women partners who are investing at the firm. Barber will join Lizzie Francis and Christine Choi on the investment team, something that Barber said was especially exciting.

“There is no better place for M13’s Launchpad than Los Angeles and no better person to lead it than Anna. M13 is home to a creative, diverse community of entrepreneurs and operators who want to make the world better by applying innovation in everything from media to biotech, prop tech to food,” said M13 co-founder Carter Reum. “We are excited for Anna to continue to lead LA’s center of entrepreneurs, mentors and investors with a rigorous Launchpad program and more exceptional partners and cohorts.”

#articles, #business, #business-incubators, #business-models, #co-founder, #economy, #entrepreneurship, #food, #head, #launchpad, #los-angeles, #m13, #mckinsey, #mentorships, #new-york, #procter-gamble, #rae, #startup-company, #tc, #techstars

Six favorite Techstars startups ahead of its next rush of demo days

With TechCrunch Disrupt happening last month, I fell behind on watching accelerator demo days. It’s time to correct that oversight.

In August and September, the Techstars network of startup accelerators held demo days for various classes of startups, grouped by either geographic location or focus. Kansas City, for example, or space.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


With October upon us, there’s another crop of Techstars demo days around the corner. To prevent falling further behind, let’s take a look at a few startups from Techstars’ September cohorts (and two from August) this morning to get primed for what the accelerator collective and venture fund will get up to next.

To find six favorites to share today, I dug through startups from Techstars’ Kansas City accelerator (full class here), its SportsTech Melbourne accelerator (full class here), its Toronto cohort (full class here), and its Tel Aviv location (full class here). You can find TechCrunch coverage of Techstars’ two space accelerators here, and their full classes here and here.

Before we jump in, this month Techstars has cohorts graduating from another five accelerators, including groups from LA, NYC, Atlanta, and more. So, there will be no shortage of startups to look at in short order. With that, let’s get into some favorites from the the past groups.

Favorites and standouts

We’ll start with the Kansas City accelerator. Kansas City, where my parents are from, incidentally, is a locale best known for its culinary magic and musical history, not to mention a famous sports team or two. I was pleasantly surprised to find out that Techstars also had a foothold in the city.

#albo, #business-incubators, #developer-tools, #fundings-exits, #kansas-city, #melbourne, #payments, #saas, #space, #sports, #startup-accelerator, #startups, #tc, #techstars, #tel-aviv, #the-exchange, #toronto

Entrepreneurship and investing as social good

2020 has been a year of social upheaval. Around the world, society is identifying different problems in our culture and pushing for widespread change. While there are notable steps we can all take, from altering exclusionary company policies to signing action-oriented petitions, the VC and investment world has another, often overlooked option: Investing in change-the-world startups.

Increasingly, angel investors and institutional funds have begun allocating a portion of their funds to startups focused on diversity and social good, whether focused on democratized access to healthcare and education, or larger scale issues like climate change.

Initially, shifting funds to empower social good may seem like a hefty feat, however investors can embrace this mindshift in three simple steps: (1) redistributing stagnant investments; (2) leveraging democratized access to change-making startups; and (3) identifying founders tracking toward success.

Allocating more investments to foster change

Most of the world’s money is tied up in stagnant places. Whether invested in real estate, bonds or other traditional vehicles, this capital typically often shows conservative returns to investors — and has negligible impact on society. The intent isn’t malicious.

Most family offices and private wealth managers strive to minimize losses and these sorts of uniformed portfolios are safe. Even the most seasoned investors should incorporate more variety into their portfolios, determining where they can make profitable investments that yield higher returns while advancing societal good. Investors can take small steps to get more confident in expanding their strategies.

To start, reframe your thinking into seeing the potential opportunity rather than the risk. A good way to do this: Look at how high-risk public equities performed over the last five years and compare it to ventures within tech. Investors will see a significant disparity and the opportunity to make different returns.

The idea is not to put an entire profile in a single venture. Rather, an investor should take a portion of their portfolio in a high-risk investment sector, like public equities or fund structures, and put it in a similar risk profile with a better return. Gradually increasing these increments, starting at 15% and slowly scaling up, can help investors to see outsized returns while making a difference in the process.

A world of passion at your fingertips

For startups of all sizes, democratized access to investors will accelerate the use of capital for social good. Until recently, only the world’s wealthiest people had exposure to premium capital, but crowdfunding and accelerator programs have ushered in new opportunities, forging connections that might not have otherwise been possible.

These avenues have opened new doors for investors and startups. Access to developed networks or innovation hubs like Silicon Valley are no longer make-or-breaks for those looking to raise capital. Extended global opportunity for startups also means investors have more options to find promising ventures that align with their values, regardless of their location.

But while crowdfunding and accelerators have made the world more accessible, they come with sizable challenges. Despite making early-stage investment more obtainable, crowdfunding often does not bring the most valuable investors to the table.

Crowdfunding also inundates platforms with poor-quality deal flow, making it more strenuous for investors to connect with fruitful opportunities. Meanwhile, various accelerators and incubation platforms have emerged, which have advanced global connection, but tend to be quite noisy.

To succeed, entrepreneurs need more than capital. Rather, they need strategic support from experienced investors who can help them make decisions and scale in an impactful way. With a world of ideas at their fingertips, investors should take time to sift through their options and find the ideas that move them the most, prioritizing quality deals and looking toward platforms that curate promising connections.

Empowering entrepreneurs poised for success

Now is the right time to invest in startups. People who innovate during the pandemic have triple the hustle of those who build in safer economies. But while the timing is right, it’s equally important that the fit is right. I’m a big believer in investing in potential: Ambition, unwavering tenacity and empathy are desirable qualities that can help bring game-changing ideas to fruition.

If an investor funds a passionate leader with a strong vision and ability to attract talent, then the groundwork is laid to build something meaningful. When considering the change-makers to invest in, ask: Is this the right person to be building this company? Do they have the ability to attract and lead talent? Is the market big enough, and is there a significant enough problem to build a company around?

If the answer isn’t yes to all of these questions, it’s important to gauge if you can see a theoretical exit, or if the company is pre-seed or Series A, if they have the ability to scale to a decent size.

Despite this, investing in startups, no matter how good their intentions, can scare investors. One way to overcome trepidation is to invest in larger-stage startups that seem less risky and then wade into earlier-stage startups at your own pace. Special purpose acquisition companies (SPACs) are also becoming an interesting investment option.

SPACs are corporations formed for the sole purpose of raising investment capital through an IPO. The proceeds are then used to buy one or more existing companies, an option that could decrease anxiety for risk-averse investors looking to expand their comfort zone.

Any strategy an investor chooses to embrace social good is a step in the right direction. Capital is a tangible way to fuel innovation and bring about impactful change.

Democratized access to startups yields more opportunity for investors to find ventures that align with their values while diversifying their profiles can provide tremendous results. And when that return means disrupting the status quo and empowering societal change? Everyone wins.

#angel-investor, #business-incubators, #column, #crowdfunding, #entrepreneurship, #opinion, #philanthropy, #private-equity, #social-good, #spacs, #startup-company, #startups, #tc

European VC firm Pale Blue Dot plans to fund 40 ‘planet-positive’ startups

Pale Blue Dot, a newly outed European venture capital firm focused on climate tech, announced this week the first closing of its debut fund at €53 million.

Targeting pre-seed and seed stage startups, the firm says it will consider software and technology investments with a strong positive climate impact. Current areas of focus include food/agriculture, industry, fashion/apparel, energy and transportation, with plans to back up to 40 companies out of fund one.

Founding partners Hampus Jakobsson, Heidi Lindvall and Joel Larsson are stalwarts of the Nordic tech ecosystem and beyond: Jakobsson co-founded TAT (The Astonishing Tribe), which was sold to Blackberry in 2012, and is a prominent angel investor in Europe, most recently a venture partner at BlueYard Capital . Lindvall is the former head of accelerator and investment team at Fast Track Malmö, with a background in human rights and media. Larsson was previously managing director at Fast Track Malmö, with a technical background and prior fund management experience.

I put questions to all three, delving deeper into Pale Blue Dot’s remit and the firm’s investment thesis. We also discussed the macro trends that warrant a fund specializing in climate tech and why Europe is poised to become a leader in the space.

Pale Blue Dot is a new VC fund specializing in climate tech, but in a sense — and to varying degrees — isn’t every venture capital fund a climate tech fund these days?

Heidi Lindvall: We think all funds should be “planet-positive” and working for a better world, but it will take time until it is a focus. Still, most funds look at a potential positive impact late in their assessment and will not decline the deal if the startups wouldn’t be significantly pulling the world in a good direction.

Hampus Jakobsson: Focus has both upsides and downsides.

The negative part with being niche is that we won’t do investments in amazing people or startups that we don’t think are “climate-contributing enough” or that the founders aren’t doing it in a genuine way (as the risk of them to paying attention to the impact might lead them to become a noncontributing company).

#agtech, #blueyard-capital, #business-incubators, #entrepreneurship, #europe, #extra-crunch, #fundraising, #greentech, #seed-stage-startups, #startups, #sweden, #tc, #venture-capital

The complicated calculus of taking Facebook’s venture money

Facebook is reportedly getting into the venture capital game, but for young entrepreneurs working in social media, ignoring or deleting that particular friend request could be the right call.

According to a report in Axios, the company is building up a corporate fund under the auspices of its “New Product Experimentation” team, which launched last year. The company posted a job opening looking for a “head of investments” for the new division and now has new job openings in the group for two “founder” positions in New York City and Menlo Park, California. 

Axios reported that the role would “manage a multimillion dollar fund that invests in leading private companies alongside top venture capital firms and angel investors,” according to a now-deleted post. The new hire will join Shabih Rizvi, a former partner at the Alphabet-backed corporate venture firm, Gradient Ventures, who began his career in venture at KPCB.

While Facebook said that the new investment arm would complement the work that the company already does to support startups through accelerators and hackathons, investors at some of Silicon Valley’s venture capital firms were skeptical. Perhaps with good reason, since the group that houses Facebook’s new investment team is hiring its own “founders” and has already developed a few apps that could compete with existing startups.

“[Money] of last resort,” one investor wrote in a text. Another said it would be a way for Facebook to spot potential acquisitions early enough to avoid triggering antitrust concerns, which may be good for Facebook, but bad for startups. “[Facebook] can’t buy 100 million-user apps any more,” this investor wrote in a direct message. “It needs to buy them closer to 10 million.”

#business-incubators, #corporate-finance, #corporate-venture-capital, #cvc, #entrepreneurship, #extra-crunch, #facebook, #finance, #fundings-exits, #fundraising, #market-analysis, #private-equity, #social, #social-network, #startups, #tc, #venture-capital, #venture-capital-firms

TechCrunch’s top 10 picks from Techstars’ May virtual demo days

A month after TechCrunch watched, discussed and parsed the startups from Techstars’ April batch of virtual demo days, we’re back with the handy May edition.

Over the past few days, TechCrunch has been catching up by watching the shared video pitches from the five presenting demo classes, including the Lisbon demo day, its Seattle batch, the Los Angeles-based music-focused group, the Air Force-sponsored accelerator and the Cox Enterprises Social Impact Accelerator Powered by Techstars .

We’ve also included links to the pitch pages themselves, so you can take a peek and vet the new companies for yourself. The categories are:

  • Social impact
  • Lisbon
  • Seattle
  • Music
  • Air Force

As before, we’re narrowing from a half dozen to around 10 companies in each group; what follows is our completely unscientific opinion.

Social impact

“If you’re going to make a diverse world a better place, it starts with diverse innovators,” said Barry Givens, the managing director of the Cox Enterprises Social Impact Accelerator powered by Techstars, as he kicked off the new accelerator’s first demo day.

Launched in January 2020, the three-month-long program included a company creating supply chain management and distribution services for biomass-to-energy and waste-to-energy businesses; a company trying to create a better process for hiring diverse employees; and a virtual reality company giving kids access to exclusive content and tools to develop their own VR experiences. All of the companies had built interesting, early businesses, but our favorites were those providing college students with access and listings of available resources and a company that’s created an app for teaching math through music:

#artificial-intelligence, #barry-givens, #business-incubators, #cox-enterprises, #education-technology, #entrepreneurship, #extra-crunch, #financial-technology, #machine-learning, #market-analysis, #private-equity, #semapa-next, #startup-accelerator, #startups, #tc, #techstars, #telemedicine, #ulo, #us-air-force, #venture-capital, #virtual-reality, #y-combinator

Africa’s top angel Tomi Davies eyes startups and co-investors

When Nigerian angel investor Tomi Davies backed his first company — Strika Entertainment in 2001 — he admits he wasn’t aware of his future role.

“I was just helping out friends. I didn’t know it was angel investing. I didn’t know there was a structure to it,” he said.

Seven years later, Davies received a 20x return on his first exit and a decade after that he’s recognized as an architect of early-stage investing across Africa.

Davies is President of The African Business Angel Network and continues to fund and mentor young tech entrepreneurs in multiple countries.

On a call with TechCrunch, he shared advice for startups on fundraising, surviving COVID-19 and suggestions for global investors on entering Africa.

VC in Africa

Davies’ ascendance in fundraising runs parallel to the boom in startup formation and VC on the continent over the last decade.

When he began In 2001, there wasn’t much measurable venture or digital entrepreneurial activity in Sub-Saharan Africa, outside South Africa. In fact, there was limited data on VC investing on the continent until around five years ago.

An early Crunchbase assisted study estimated VC to African startups annually grew from $40 million in 2012 to $500 million by 2015. A recent assessment by investment firm Partech tallied $2 billion going to the continent’s digital entrepreneurs in 2019, across top markets Nigeria, South Africa and Kenya.

Africa Top VC Markets 2019

Image Credits: TechCrunch

There are now thousands of VC backed startup entrepreneurs across the continent descending on every conceivable use-case — from fintech to on demand electric motorcycle mobility.

Increasingly, Davies’ home country of Nigeria has become the continent’s unofficial capital for venture investment and startup formation, given its market thesis of having Africa’s largest economy and population of 200 million people.

Even with the boom in VC to the continent’s startups — which has drawn investors such as Goldman Sachs and Steve Case — for years panels at African tech conferences have echoed the need for more early-stage funding options.

Davies has worked to meet that. He came to investing at the friends and family level after receiving an MBA at the University of Miami and an earlier career that spanned roles in management consulting, telecoms and IT.

After emerging as one of the early angels to Africa’s startups, supporting the continent’s innovation ecosystem became a mission for the Nigerian investor.

“My raison d’etre became, and will remain until the day I die, tech in African,” Davies said on a call from Lagos.

How to pitch

In his role as President of The African Angel Business Network, or ABAN, Davies has worked with a team to build out a local investor web across the continent.

“ABAN is very simply a network of networks…we have 49 networks in 33 African countries,” he explained.

Those include Lagos Angel Network, which Davies co-founded, Cairo Angels and Angel Investor Ethiopia, announced in Addis Ababa in 2019.

Tomi Davies (L) judges pitches with Cellulant CEO Ken Njoroge at Startup Ethiopia 2019, Image Credits: Jake Bright

ABAN establishes certain guidelines and criteria for how member networks operate, but each chapter sets its own investment terms, according to Davies.

For example, ABAN affiliated Dakar Angel Network — founded in 2018 to support startups in French speaking Africa — offers seed investments of between $25,000 to $100,000 to early-stage ventures.

Where and how startups seek funds from ABAN’s family of networks depends on where they operate. “One thing I say to everybody, from presidents to business people to investors, is Africa is about cities,” Davies said.

“When you know which city your looking to invest in or seek investment in, automatically we’ll be in a position to say, ‘here’s your network.’”

For the Lagos Angel Network in Nigeria, the team has a pitch night the third Thursday of each month with a 30 day rule. “Before you leave, you’ll hear if we’re interested or not. If we’re interested, we’ve got 30 days to make you an offer,” explained Davies.

Advice to startups

In addition to his work with ABAN, Davies continues to invest in his own portfolio of startups — now at 32 ventures — and is a regular judge on Africa’s tech competition circuit.

He’s developed a framework to assess companies and shared parts of it with TechCrunch.

Tomi Davies (center) at Startup Battlefield Africa 2017

“What I say to any startup raising is the first thing any investor is listening to is how do I get my money back. That’s question number one, ‘How do I get my exit?,’” he said.

Davies stressed three things to satisfy that question: “The product service offering that you have, the customers who see value in that product service offering and the nature of the relationship in terms of channel and price offering,” he said.

“That’s what you’re always tinkering with after you start with some kind of value proposition.”

Weathering recession

Davies referenced the increased significance of referrals, given the coronavirus has cancelled a number of events and limited mobility to pitch in person in Africa’s top VC markets.

“Because of COVID-19, networks have become critically important. Because investors can’t touch, can’t feel, can’t see [founders] people are looking now for referential integrity, ‘Who sent me this deck?,’” Davies said.

On how a coronavirus induced Nigerian recession may impact startups, Davies flagged the country’s non-stop informal commercial activity — and the adaptability of Nigerian entrepreneurs — as factors that could carry ventures through.

“There’s a significant chunk of the economy that’s in the informal market. So even if you look back at the recessions we’ve had…it hasn’t been felt on the streets,” he said.

Davies is also collaborating with partners on creating working capital solutions for startups whose revenues have been impacted by slowdown.

Co-investors

Tomi Davies is direct about his desire to draw new partners from tech centers such as Silicon Valley, into early-stage investing in Africa.

“We are always looking for co-investors and I speak on behalf of all 49 networks in ABAN,” he said. Davies highlighted the local expertise each network brings to their market as a benefit to VCs looking to invest on the continent through an African Business Angel Network affiliate.

#africa, #angel-investors, #business-incubators, #cellulant, #ceo, #entrepreneurship, #finance, #goldman-sachs, #investment, #ken-njoroge, #kenya, #lagos, #marieme-diop, #money, #nigeria, #partech, #president, #private-equity, #south-africa, #startup-company, #steve-case, #tc, #united-states

Partners at B2B European VC henQ discuss remote work’s biggest advantages

HenQ, an Amsterdam-based VC that invests in European B2B software startups typically at seed and Series A, recently disclosed the first close of its fourth fund at €70 million. The final close is expected to top out at between €75-€85 million later this year, and the firm has already begun backing companies out of the new fund.

However, what sets henQ apart from many VC firms isn’t just its pure focus on B2B software but that its team is fully remote. Primarily investing in the Nordics and Benelux, henQ doesn’t have any official offices, with the team working from different temporary locations. Even before the coronavirus pandemic, henQ closed deals remotely.

Successes from its previous funds include Mendix (acquired by Siemens) and SEOshop (acquired by Lightspeed).

I spoke to partners Jan Andriessen, Mick Mackaay and Jelmer de Jong to learn more about henQ, what it’s like to be a fully remote VC and how the firm envisions the post-pandemic era.

TechCrunch: Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Jan Andriessen: Our main focus is seed rounds, in which we often are the lead investor. We also invest in Series A rounds, often as a co-investor. Initial check sizes vary from €500,000 to €3.5 million.

A typical seed investment has a product and perhaps a few pilot customers. The key here is not revenue (which is OK to be zero), but there is proof of the actual need for the product.

Most of our recent deals were in the Nordics and Benelux, the areas where we spent the majority of our time. But we have also invested in the Baltics, Czech Republic and the UK. For henQ 4, we expect this to be the same: the bulk of our investments will be in the Nordics and Benelux, with an occasional deal in broader Europe.

In terms of technology and business trends, one of the things we firmly believe in is the consumerization of enterprise software: successful startups are centered around their customers and focus on the job to be done. More generally, we have always been focused on startups with staying power: companies that have a right to exist over time, not just now, as they deliver a product that touches the core processes of their customers and operate at the heart of their customer’s business.

For example, looking at our portfolio, Zivver delivers secure communication solutions for hospitals and governments. Stravito works deep in the research departments of FMCGs, delivering a knowledge management platform. Mews runs the full operations of hotels with their property management system, and Orderchamp enables retailers to digitize their buying process.

We see the business model of a company as a means, not an end. Most of the startups we invest in charge a SaaS plus implementation fee, and have a more enterprise-sales driven business model. We are not afraid to invest in startups that have a more complex and longer sales cycle, and are not per se looking for SaaS ‘by-the-book.’

#amsterdam, #business-incubators, #cloud, #coronavirus, #covid-19, #ecommerce, #enterprise-software, #europe, #extra-crunch, #knowledge-management, #mendix, #saas, #siemens, #startups, #tc, #venture-capital, #work

Indie.vc founder Bryce Roberts: Profitability is ‘more achievable than a Series A round’

Despite all evidence to the contrary, there’s more to building a startup than raising venture capital.

Founders are finding success without overly relying on VC dollars; some are even sharing profits with their respective employees and customers without the help of traditional funding and Silicon Valley power dynamics.

As some investors slow down their funding pace, it has become clear that profitability trumps funding and venture capital can only take a startup so far when the economy tanks and outside cash streams dry up.

In the Indie.vc portfolio, profitability is its driving force. In fact, its main criterion for funding is that a startup must be on a clear path to profitability with durable fundamentals like high gross margins or the ability to start charging for a product right away, as opposed to companies that need a significant amount of upfront investment for research and development.

Profitability, Indie.vc founder Bryce Roberts tells TechCrunch, needs to be a habit, and founders need to recognize that it’s not a switch they can just turn on. Startups looking to prioritize profitability need to start out as revenue-driven businesses that replace funding milestones with profitability goals.

“Genuinely, it’s not rocket science,” he says. “Profitability isn’t this crazy, elusive thing. It’s literally more achievable than a Series A round. It’s way more achievable than a Series B round. If you look at the kind of fall-off between those rounds, most entrepreneurs would be better off finding their path to profitability and scale.”

Indie.vc, which recently announced its latest batch of investments, advises founders to make sure they have what they need to be stable and then to create and measure value, Roberts says. That value, which differs depending on the company, must be quantifiable as some metric or revenue.

To do that, Roberts says founders should adopt a mindset where they’re focused on creating revenue opportunities, rather than cost savings. Indie.vc’s model also does not prioritize hiring ahead of growth, a strategy that seems to be working for its portfolio during the pandemic.

#bryce-roberts, #business-incubators, #coronavirus, #covid-19, #entrepreneurship, #extra-crunch, #fundraising, #growth-and-monetization, #indie-vc, #private-equity, #startups, #tc, #venture-capital

Investors buy The DiPP as accelerators go virtual

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had a choice of all sorts of news, but as we cut the show together as a group Danny pushed all the funding rounds up. So, when Alex and Natasha jumped into the show we had a bunch of good news to cover. We’re avoiding COVID-19 news, but the pandemic is just a part of the broader stories we want to tell. For the foreseeable future, coronavirus will be always be part of our interviews. But the conversation can’t start and stop there.

So what was on the docket? Three things: Accelerator news for the early-stage founders, funding rounds, of course, and some layoff news that was worth mentioning as it might trickle down beyond the unfortunate hosts. 

Here’s the rundown:

We didn’t get to talk through some Silicon Valley or European venture capital data, not to mention what we’re seeing in Boston because we ran out of time! More soon.

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

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