PUBLIC organised the first ever EuropeanGovTech Summit on Monday 12 November 2018, at the Paris City Hall. In partnership with President Emmanuel Macron and with the support of the Mayor of Paris, Anne Hidalgo, and the European Commission, the GovTech Summit for the first time gathered European leaders and innovators to discuss how technology can help transform governments and democratic practices.
Traditionally, the largest and most successful corporations were also the largest employers. Manufacturing and retail businesses required factories, warehouses, logistics and plenty of manpower, all working in harmony to deliver their product or service. Building this capability took years, requiring significant capital investments. Thus, competitors were few and far between, and disruption was painfully slow to make a dent on existing hierarchies.
But with the rise of technology, the model of success has gradually evolved, with businesses requiring fewer and fewer resources and employees to make an impact. Whatsapp is the perfect example; already worth $19bn with only 55 employees. And as we enter the next wave of tech innovation, we’ll increasingly see power transfer away from traditional ‘corporations’ and fall into the hands of smaller groups of highly skilled and hyper-talented individuals.
More, but increasingly complex opportunities
There has never been a more exciting time to be an entrepreneur, with emerging technologies bringing an unprecedented number of opportunities for innovation across platforms and software, with minimal physical resources and infrastructure required. We’re only now beginning to understand the potential of tools such as AI, machine learning, AR, VR, and the Internet of Things, and how they can be combined to create breakthroughs across a whole range of industries and problems.
Yet, identifying and then maximising these complex and increasingly technical opportunities requires equally specialist knowledge and skills, along with the ability to respond rapidly to new innovations and competition. Understanding and manipulating the most cutting-edge tools requires the best brains, not to mention the drive, resilience and vision to identify the ideas with the most potential. The barriers to entry are rising, placing the power in the hands of those highly capable individuals, who are no longer reliant on building large organisations or physical assets to realise their ambitions.
Size doesn’t equal power
Corporations have always struggled to innovate, lacking the natural agility and flexibility of smaller organisations. However, as we enter this new age of innovation, it is becoming even tougher for the incumbents to keep up with the pace of change and increasing complexity, even with all their manpower and their abundance of cash lying dormant on the balance sheet.
What these big businesses are lacking is the ability to harness the power of the most talented individuals, by providing an environment where they can thrive. Radical change needs mavericks and risk takers who in turn need the freedom and ability to innovate; not be put in a straight-jacket and told to behave and operate according to corporate rules. The most extreme innovators don’t fit into old-fashioned, archaic organisational structures, which means it’s very difficult for big businesses to attract, integrate and retain these individuals.
Investing in these most cutting-edge technologies is also extremely risky, and corporations are too afraid of making mistakes and too busy covering their backs to take a serious punt on ideas that might not build any value. Innovation requires agility and radical thinking, which is impossible in an environment that is paralysed by politics, an aversion to change and worries of cannibalising its existing revenue streams and product lines. Their only real hopes are spin-offs, joint ventures and acquisitions of the most talented individuals – not in-house innovation.
Supporting the individual
Those who succeed in the next wave of innovation will be those individuals and small teams with the technical skills and a ‘knack’ for understanding the end vision, along with the freedom and agility to explore the unknown. But to have this freedom, these individuals must be adequately supported with resources, networks and capital to take the necessary risks and follow their instincts.
This is why venture capital is growing in importance, to marry the most talented individuals with the best opportunities and enable them to fulfil their potential. The future is in the hands of the talented few, not the corporations, and it’s up to us, the venture investors, to help them turn opportunity into reality.
If you’re an early-stage founder looking for a cash injection to grow, then no doubt you’ll soon be out pitching to VCs. Entrepreneurs can spend a huge chunk of their first few years in business sourcing investment, by tracking down and wooing lots of people like me. And for the uninitiated, the VC industry can seem shrouded in a kind of mystique. Sometimes it feels like there’s no rhyme nor reason why a VC says “yes” to some startups and “no” to others, making the process all the more frustrating, if things aren’t going your way.
But if it provides any consolation, it’s often as hard for VCs to say “no” as it is for founders to hear it. VC investment is an inexact science. Working out which companies will be the next big thing can’t be distilled down to a simple formula, or a list of tick-boxes. Right now, the startup sector is extremely diverse, thanks to a host of emerging technologies which, when matched with the right people, can be hugely powerful. Talented entrepreneurs from all walks of life are out there solving any problem you can imagine (and some you can’t), which makes picking the winners even harder.
Why sometimes it has to be a “no”
VCs are overwhelmed with approaches so it’s a job in itself to just manage the pipeline of opportunities we have coming through. VCs value relationships so cold approaches are usually less successful than if a founder is introduced through a mutual contact. And naturally, we prioritise businesses that fit with our market knowledge, our skills and the stage we focus on. Any generic pitches that look like they’ve been sent out in bulk to every VC are almost always non-starters.
Those who make it over the initial hurdles are taken through a funnel towards potential investment, which sometimes can last as long as 12 or 18 months. When assessing companies, we come at it from two angles. At the fundamental level, we have to get into the data and analyse the company offering and the market opportunity. As experienced VCs, we also rely on our gut feel and knack for what could work and succeed. But alongside that, it’s also vital to look at the qualities of the founding team, to see whether they are people we can work with. If the chemistry isn’t right, that’s an issue.
Another key factor is timing, which is critical but harder to control. Founders may have better luck with funds early on in their investment cycle, when the VCs have more capital, and when they have less going on with their existing portfolio of companies and other deals. Knowing when the best time isn’t easy of course, and there’s never going to be a ‘perfect time,’ but understanding the factors involved at least helps to explain why sometimes it doesn’t work out.
Fear of missing out
As you would imagine, the further we move down the funnel and the longer we’ve spent building up a relationship with founders, the harder saying “no” becomes. VCs are hugely susceptible to FOMO, constantly wondering whether we’ve just rejected the next Uber or AirBnb. Many VCs continue to follow companies after a “no” for this reason. However, we also have enormous respect for any entrepreneur, for the risks they take and the effort they put in for their idea and will thus be careful not to take up their time unnecessarily.
When we do say “no” at a later stage, we do so very reluctantly. If we don’t have total conviction in the deal, whether that’s down to chemistry between us and the founders, their responsiveness to requests for information, or issues and inaccuracies raised in our due diligence process. But it’s never an easy decision to make.
How to boost your chance of a “yes”
There are a few ways that founders can maximise their chance of success with VCs:
– Before making an approach, consider which firms are the best fit for your business, based on expertise, past investments, funding stage and geography.
– Focus on building relationships and find out what makes us tick. If we do invest, we’re going to be together for a long time, so it’s better to make sure we get on.
– Make contact early and keep us posted along the way – even if that means a three-bullet point update every two months. Make us feel “part of a journey”, even before we’ve invested.
– VCs hate surprises, so be honest about any challenges you’re facing. If you don’t, we will find out eventually.
– Tell us a story that makes us excited. Captivate us. If we like you, we’re more likely to invest in you.
How to turn a “no” into a “yes”
Nobody likes to be turned down or told: “you’re not good enough.”
But if it is a ‘no’ first time round, that doesn’t mean it’s an eternal ‘no’. The best founders always find ways of using an initial rejection to address any issues, improve aspects that can make a difference and take a proactive and constructive approach to building an even better company. Plenty of businesses have gone from multiple ‘nos’ to becoming successful businesses and brands, so take it as a valuable learning experience and keep going.
Which UK companies are rewriting the rules and redefining their marketplaces? Earlier this year, The Spectator and Julius Baer launched the inaugural Economic Disruptor Awards to celebrate the most creative entrepreneurs in the UK.
The 2018 Economic Disruptor of the Year is Pockit – a low-cost, easy-access banking app aimed at helping Britain’s ‘unbanked’.
The venture capital industry is on a roll, with US investments expected to reach $100bn for the first time ever by the end of 2018, and European start-ups also on course for a record-breaking funding year.
As a founding partner in a European VC fund, this is obviously great news, showing that more start-ups are getting funded and that more family offices and institutions are choosing to invest. But all this money flowing into venture is also a big responsibility for VCs, who must now prove their worth through bumper returns – particularly in Europe, where the sector is still in its infancy.
The way that VCs are painted in the media makes you think that getting involved practically guarantees a stake in the next Facebook, Google or Spotify, and the mammoth yields that come with that. But the fact is, landing one of these deals is like trying to find the proverbial needle in a haystack. They’re called unicorns for a reason, and you can’t rely on finding one if you want to deliver consistent, long-term returns. That requires a different approach.
Shooting for the stars vs. hard work
Rather than chasing mythical creatures – or hoping one will fall into your lap – there are more guaranteed ways of achieving 1.5 to 3x returns from venture investing. But you have to be prepared for hard graft, active management and hands-on work with portfolio companies.
With more opportunities than ever to start a tech company, it’s not only harder for VCs to spot the superstars of the future but, faced with more competition, it’s also harder for those who do get funding to eventually break through and scale. This is where the best VCs can really make a difference.
Where ‘VC 1.0’ simply involved spotting and then monitoring portfolio businesses, ‘VC 2.0’ is about being a facilitator and adding real value to start-ups. Capital is a commodity these days, but the ability to provide non-financial support, such as contacts, skills and expertise, has the power to make as much as an impact as the cash – if not more so – giving entrepreneurs access to resources they wouldn’t otherwise have at such an early stage.
Making this approach to work is only possible if there’s a strong and trusting working relationship between the VC and the entrepreneur, and that has to be nurtured from the word go.
Each entrepreneur and each company are different, with their own unique characteristics and way of working. VCs therefore have to spend a lot of time getting to know both the company and the founder(s) prior to investment, to determine the working relationship and the value we can bring to the table – over and above the capital.
Choosing which companies to invest in shouldn’t just be about going for what’s ‘hot’, but assessing what you as a funding team can offer a business in terms of support and contacts to help the business to grow over the long-term. Get it right and you’re in a position to confront issues as they arise and help to resolve them. Rather than letting things “float”, as many VCs do, eventually ending up with an unresolvable situation.
Providing this level of support to a full portfolio is complex and hard work, requiring you to think of your portfolio companies every hour of the day, and ensuring you have the resources to scale along with them. But overall, building strong, supportive partnerships makes the job of a VC investor infinitely easier. And I’m willing to bet that it’s a much better route to higher returns than searching for the next unicorn.
Accenture)and leading GovTech firm PUBLIC are collaborating to help bring to market new start-up technologies that will enable governments to deliver smarter, more-efficient public services.
Daniel Korski, PUBLIC’s CEO & co-founder, said, “We are delighted to be starting this journey with Accenture, which will help us to bring new and powerful technologies to government, both centrally and locally. We have been constantly encouraged by the positive response we have received from the public and private sector in creating a thriving GovTech ecosystem. The opportunity to continue to build and grow GovTech with Accenture is an exciting prospect — and we look forward to all that is to come.”
Denis Shafranik, partner at Concentric says the time is right for family offices of embrace venture capital. Here’s what to consider when choosing a VC partner
This summer was a scorcher for start-ups and venture capital. In July, VCs around the world closed 55 deals exceeding $15 billion, while in the UK around £1.6 billion was invested in the three months to June. Not to be outdone, Europe is also enjoying a start-up boom, with 41 per cent of business owners predicting that no one European city will dominate the tech space following Brexit, as new hot spots such as Oslo and Lisbon come to the fore.
Similarly, European family offices are waking up to the potential of venture investment, a space that has historically been dominated by US and Asian families. Based on conversations with more than 300 family offices worldwide, Concentric found that around 70 per cent are now actively investing in or evaluating exposure to tech VC. New generations are demonstrating a greater affinity with disruptive business models not to mention the higher yields they represent, hedging their typically real-economy family businesses exposure with technological ventures.
Yet, despite their desire to get involved, many family offices have had less than positive experiences of VC in the past and therefore remain wary. So, what’s the best approach, and what should family offices look for when choosing a VC partner?
Collaboration: Investing on your own is tough, which is why collaborating with an established VC partner is invaluable. VC isn’t about cherry picking stocks, but spending time with founders, to help nurture and grow their businesses, all the while constructing a balanced portfolio. This requires a daily presence in venture markets and a long-term, hands-on approach. The key is building a brand that the start-up ecosystem gravitates towards.
Hiring your own team vs. fund managers: Building an in-house VC team is expensive, and only really worth the investment for family offices with more than £100 million to invest. A second option is to outsource the VC operation entirely to fund managers but, while this might achieve the right risk-return balance, it means investment decisions occur more remotely. For many family offices, the fun comes from being closer to the action.
Flexibility: A third and more suitable alternative is a ‘hybrid model’, creating diversification across a couple of fund managers – but no more. This allows for more meaningful relationships, more access to founders themselves and the potential to outperform the rest of the market. At the same time family offices are able to leverage managers’ pipelines and contacts to deploy direct co-investments and build their own portfolios while ensuring they are managed by a professional team. For best results, managers should cover different stages of the investment (i.e. seed, series A, B, C etc.) and the various geographies where promising start-ups could emerge.
Shared interests: When choosing managers to partner with, check that they also have ‘skin in the game’, to show they’re confident in their own investments. A 1 per cent GP (General Partner) commitment will not comfort a self-made family office, sensitive to the risks and rewards of being an entrepreneur. Instead, you should be looking for a meaningful commitment. Depending on the size of the fund, a commitment of 10 to 20 per cent would signal a strong alignment of interests.
Intimacy: Having an open and transparent partnership with your fund manager is vital and this is more likely with an emerging manager, as opposed to a passive investor in a large institutionally-led fund. Ultimately family offices should be looking to build direct and co-investment portfolios, while managers must be prepared to syndicate the best opportunities to their partners. This enables a family office to build a name for itself in the venture market without paying for a full-time team.
European investors have traditionally been more risk averse than those in the US or Asia, but the time has come for them to punch their weight in venture capital. Get it right and family offices not only have the potential to see much higher returns than from traditional investments, but they’ll also play a critical role in the rise of European tech onto the global stage.
AI startup Memory has raised $5 million in a funding round led by Concentric and Investinor, with participation from existing investor SNÖ Ventures. This brings the total funding amount raise by Memory to $6 million.
Kjartan Rist, Partner at Concentric, commented: “Memory’s growth and proven product-market fit mean it is well aligned with Concentric’s expertise and ambitions, and we can add huge value in areas such as expanding internationally, hiring great talent, securing the right partnerships and targeting the enterprise space. Memory is now all set to scale and we look forward to playing an active role in the next exciting phase of the business.”
Huckletree on the 25th of September organised Fairer Funding Now event, calling for greater diversity in the startups receiving investment in the UK and Ireland. BBC Radio 4’s Kirsty Lang, Crowdcube’s Sara Palmer, Dion McKenzie of colorintech, Mums in Technology’s June Angelides and AccelerateHER’s Poppy Gaye and Laura Stebbing shared their experience.
Kjartan Rist and Denis Shafranik discuss financing the likes of Airsorted and PayAsUGym, the improvement in quality of European entrepreneurs, and why it’s a great time for a scale-up to raise money.
Concentric is a London and Copenhagen-based venture capital firm, investing in early-stage tech businesses – from seed through to Series B – across Europe. The firm was conceived in 2013 and went live in 2016 with its first fund, having now grown to a team of seven.
The firm has so far deployed €40 million across 19 businesses, working in partnership with 20 entrepreneurial family offices around the world. Here, we speak to Kjartan Rist and Denis Shafranik about financing the likes of Airsorted and PayAsUGym, the improvement in quality of European entrepreneurs, and why it’s a great time for a scale-up to raise money.
What is the vision?
We seek alignment with our investors and investees, and we’re committed to building long-term partnerships. We actively support the businesses we invest in, through our hands-on, straight-talking approach. We’re responsive and proactive with advice on solving problems, whether that’s hiring, tools, strategy or helping to source follow on capital.
We’re also committed to playing an active role in the evolution of the European VC industry, by proactively educating family offices and institutions about why they should invest in early stage businesses.
What are you looking for in an investment?
As you can imagine, we receive a lot of approaches for capital, but as we aren’t a huge fund, we don’t just invest for sake of it. Above all, we invest in businesses where we think we can help, through our knowledge of the market and the space. We have experience and network in four sectors: financial services, real estate tech, marketplaces/retail and industrial automation.
That said, we’re continuously learning and will broaden our investment thesis to new sectors where tech innovation is happening, once we have sufficient comfort that we can make a positive difference there.
We’re not suitable for filling up rounds or being silent investors. The whole team invests in our fund, which means we’re personally involved, and we want to be vocal and active in the growth of every business in our portfolio. Founders should ensure that they’re aligned with our philosophy before approaching us.
How can cash-hungry businesses get themselves noticed?
Well, the best way to get on to our radar is via an introduction from a mutual contact, but otherwise we’re very active on social media, so drop us a line on there. We give priority in our time to our founders and so sadly can’t reply to everybody, however as a young fund, we’re keen to see good companies. So, if a business is in our broad spectrum of interest, we’ll try to reply. Whatever you do, don’t blind email lots of VCs, as the old-fashioned personal approach is definitely better in the investment space.
When it comes to assessing start-ups, we come at it from two angles. At the fundamental level, we have to get into the data and analyse the market opportunity, but it’s also vital to look at the qualities of the founding team, to see whether they are people we can work with. As experienced VCs, we also rely on our gut feel and knack for what could work and succeed.
Entrepreneurs can expect to receive honest, unfiltered feedback and we’ll give you a steer as soon as possible on where you are in the process. Even if we choose not to invest, we want to add value to the companies that we engage deeply with, leaving them with a nugget, something positive that they can take away. Founders risk a lot to do something they truly believe in, so we have to be humble to that.
Of course, we need to do our due diligence. We take extra time on the business model, team dynamics and assessing product-market-fit. But we try to be as streamlined as possible on the technical, accounting and legal aspects – in most cases these due diligence stages are just confirmative that we’ve made the right decision.
What high profile fundraises has the firm orchestrated?
We recently helped put together the £7 million Series A round for Airsorted, the homestay management service, involving Atami Capital as a lead investor. The company is now going for its Series B round and aims to be in over 30 cities around the world by the end of this year.
Another high profile one is PayasUgym, which we originally supported in 2014, going on to help shape subsequent rounds, including its latest Series A round of £6.5 million. As the UK’s largest gym marketplace, the business now provides access to more than 2,500 sites across the country.
We recently led the pre-series A round for Digital Risks, the insurance provider for digital businesses, raising £2.3 million, as well as the recent €2.2 million round for Insly, the cloud-based insurance software.
Other big names in our portfolio include Frontier Car Group, Huckletree and Pockit, all of which are at Series B/C stage.
How was your expertise applied to these?
In the rounds that we orchestrated, we were intimately involved in identifying potential investors, premarketing the opportunity to them and then introducing the company. It’s then a case of staying in touch and ensuring they make it to the term sheet stage. Sometimes you have to help founders decide between investors, by analysing which one will add more value. As a lead investor, you have the responsibility to structure the most optimal round for the business, so you spend a lot of time meeting other investors and assessing best fit with the company.
What market trends do entrepreneurs need to be aware of when seeking investment?
Having worked in this industry for close to 20 years, we’ve seen a huge improvement in quality of European entrepreneurs. We’ve reached a point where talented young people want to work in start-ups over big consulting firms or investment banks, and it’s an accepted profession to go into. This has been helped by the ease with which you can now start a business and increase in tech salaries. Plus, there are so many opportunities out there, with a wealth of new technologies and platforms to exploit. It’s an amazing time to start a company right now.
However, that’s not to say it’s easy. To be a successful entrepreneur you have to have many different qualities, that are difficult to find in one person. You need to have the technical skills to work with innovative technologies, as well as the personal qualities to handle setbacks, stick to your vision and inspire your team. It’s hard work, but for those who have the grit and determination, the opportunities are significant.
How has the VC market changed of late?
The VC market has also been improving year on year for the last few years, which means it’s a great time to raise money. Europe has traditionally lagged behind the US, and while we are catching up, we still need more funds at the later stages. That means we need to keep educating family offices of the value of investing in venture, as well as making the case for institutional investors to commit to the venture ecosystem, so that European start-ups are incentivised to grow rather than sell.
Top tips for entrepreneurs seeking investment from Concentric
Make contact early and keep us posted along the way – even if that means three bullet points every two months.
Be honest and tell us the real story. If you don’t, we will find out eventually!
Focus on building relationships and find out what makes us tick. We are going to be together for a long time, so it’s better to make sure we get on, before any money has changed hands.
Tell us a story that makes excited. Captivate us. If we like you, we’re more likely to invest in you.
On 20 August, DueDil closed £8 million Series C funding round. Augmentum Fintech plc is the lead investor with £2 million contribution. Duedil is building the world’s most complete source of information on private companies.
Four-day weeks may boost productivity among established businesses (“Hard work may not pay after all”, August 6), but the opposite is usually true among those starting new ventures.
In our experience, the most successful start-up founders tend to work almost 24/7 with complete dedication and focus. The eternal lack of resources, the uncertainty, products that don’t work and staff turnover mean that the workload and pace of activity is relentless.
We believe one reason founders are able to cope is due to a high proportion of what you might call “brute force” tasks involved in starting a business (for example, business development calls, emails, managing staff and so on), which are time-consuming and monotonous, but not as cognitively demanding as creativity and idea generation.
While there is a limit to the time you can spend on creative activities, with the former an individual can spend as much time as their willpower allows. These tasks must get done in order to push the business forward, and with limited resources, if the founder doesn’t do it, nobody will. Those who succeed are therefore able to push through a high volume of work, both creative and more mundane, without giving up or get fazed by the impossible workload.
Of course, successful founders would say that the hard work does “pay”; however, it’s important not to romanticise the start-up lifestyle. We hear anecdotally that around 70 per cent of top graduates now aspire to entrepreneurship, but it takes a special kind of dedication and resilience to make it work. And it’s unlikely to involve a four-day week.
London SW1, UK
Digital Risks secured its £2.25 million investment round. The round was led by Concentric, with participation from Atami Capital, Seedcamp, London Co-Investment Fund and Beazley.
Digital Risks, co-founded by Cameron Shearer and Ben Rose, is the digital-first insurance provider for fast-growth technology and media businesses.
PUBLIC is delighted to be backing the founding team of Panopticon, including Sir Mark Rowley, in building this important new venture. The government is actively looking for new, ethical and tech savvy partners in the security and criminal justice sector – and Panopticon is ideally placed to become the most innovative company in the market.
Digital Risks, the digital-first broker for fast-growth technology and media businesses, has won the Insurance Start-up category at the British Insurance Awards. The insurtech start-up was recognised for its innovative range of covers, online customer experience and flexible subscription model.
62% of Start-Ups Fail due to Founding Team Conflict
The human aspect of an investment is most important. It is well known that most start-ups will fail. It is less well known that most start-ups fail because of conflict between the founding team.
At Concentric, this has bothered us for some time. With unprecedented sums going into venture capital investments, we have been continually surprised to find little serious work on what makes a successful founder or founding team.
Last year we partnered with Karim Jalbout – head of Egon Zehnder’s European technology practice – to assemble a group of industry experts including founders, investors, recruiters and HR consultants.
The aim was to understand and find consensus from a range of perspectives on exactly what makes a founder ‘good’ and what practical tools are at our disposal to help us identify positive or negative traits during our investment due diligence process.
The case study is attached.
Huckletree Shoreditch bids farewell to the latest graduates of the Alpha Programme, a 12-week long intensive accelerator programme for startups at pre-seed stage. Each cohort benefits from relentless pitch practise, workshops led by industry superstars, real-time feedback from the community and exposure to talent, partners, clients and investors.
Europe’s Seedcamp closes 4th fund at $81 million.
Founded in 2007, London-based Seedcamp has invested in more than 250 startups since its inception, including TransferWise, UiPath, and Revolut.
Seedcamp announced Fund IV back in November with an inaugural close of £41 million ($55 million), but it has now finalized the “heavily oversubscribed” fund at roughly 50 percent above the initial figure.
Airsorted has been named #10 of the UK’s hottest 100 startups.
The start-up has managed more than 3,800 homes to date and is already live in London, Edinburgh, Dublin, Sydney, Brighton, Bristol, Brisbane, Auckland, Melbourne and Paris.
It’s planning on expanding to nine new cities this year, with a target of being open in 38 cities by 2019.
It’s now also diversified beyond short-lets, running flexible letting cycles of anything from two nights to 12-month tenancies.
Airsorted’s Series A exceeds £7 million. The company successfully secured more than £2.1 million additional funding through its equity crowdfunding campaign on Seedrs. Earlier in March, the London-based tech startup raised £5 million from investors including Concentric, Atami Capital, Maxfield Capital and Pi Labs.
PayAsUGym completes £6.5m Series A investment round lead by Albion Capital, alongside existing co-investor Concentric and individual angels. The investment will be used to build the team, further enhance the product, grow the gym network and overall user base.
According to COO and co-founder, Neil Harmsworth, the funding will be used to build the team and “further enhance the product” for both consumers and for participating gym operators.
“Over the past 24 months the fitness industry has really started to embrace new ways to reach new customers and PayAsUGym has become a leading platform in that respect,”
Concentric participated in the Frontier Car Group’s Series B investment round.
Frontier Car Group, a Berlin, Germany-based used car marketplace targeted at countries outside of Western Europe and North America, raised $58m in Series B funding.
Alongside SNÖ Ventures & NOTWICS, Concentric co-hosted the 3rd Oslo Technology Excursion. It is a testament to the growing quality of the Norwegian tech landscape that the quality of the company pitches have improved massively over the last few years and the knowledge and level of discussions between the panellists were at a significantly higher level. Thanks to everyone who contributed to the event and we are looking forward to seeing you all next year.
Following the great feedback received after our joint event with Christian af Jochnick that took place in Stockholm September 2017, Concentric continued a series of intimate investor gatherings. Gstaad Snow Summit was co-hosted with Patrick Aisher and his firm Kinled. Kinled has been a close partner of Concentric since our first fund close and are active in both digital and life sciences technology sectors.
Concentric and Black Pearls VC led the latest Insly’s €2.2 million round.
Kjartan Rist, Managing Partner of Concentric commented:
“We have been keeping an eye on the insurtech landscape for some time and it has been a challenge to find a company that has a long-term vision and an actual, proven value proposition. Insly has shown its capability to change the archaic insurance industry.”
Concentric – the end of the beginning….
As the year 2018 commenced we carried out a formal close of Concentric 1. In so doing we felt it opportune to share some of our thoughts regarding the industry, our model and the entrepreneurs we back.
As an asset class, venture capital is terribly hard to get right. One must deal with an array of issues and challenges as part of a daily routine with portfolio companies that are perennially a “work-in-progress”. But, when you are dealing with exceptionally talented, unrelenting entrepreneurs and the opportunity to be an integral part of their journey, there are few more rewarding and exciting places to be. At Concentric we feel fortunate having been able to launch our first fund during such a fruitful time for the European venture capital industry, where the technological frontier is being pushed back every day by a new generation of entrepreneurs.
In the shoes of an entrepreneur
At Concentric we have deep respect for entrepreneurs who take personal risks and invest to build the next generation of category-leading businesses. The ability to balance long-term vision with short-term survival can often be overwhelming. Indeed, we have been on that emotional rollercoaster ourselves these past few years founding and building Concentric. The plethora of tasks and challenges we have faced have taught us first-hand about being an entrepreneur and the trials and tribulations a founding team must go through to succeed. Our mission is, and continues to be, to establish Concentric as a leading brand in the European venture capital market.
Creating value through being supportive and pro-active
As investors we rely predominantly on the entrepreneurs to make a business successful. That said, we are there to assist, facilitate and fund the journey of the founding team and aim to add value through pro-active support and focus. We hope these principles will further establish our name and that future talented entrepreneurs will naturally gravitate towards Concentric as they seek to build out their businesses.
Rapid societal, economic and technological change are front of mind
As investors we know it’s essential to stay intellectually curious and honest and to not allow complacency or arrogance to creep in – we need to keep the fire in the belly and dare to be different! With all the challenges facing society through a rapidly evolving technological landscape, particularly in the context of increasing monetary and socio-economic volatility, this becomes increasingly important. These observations are reflected in the type of deals we will be pursuing going forward.
Collaborative model reflected through global partnerships
Venture capital is hard, but we feel the timing is right. Technology is becoming an integral part of any industry, European entrepreneurship is at its peak and we are experiencing a second wave of Entrepreneurs; a young generation of hungry and talented founders inspired by what the future could bring. We have been joined by a dozen global families on the journey, families that are keen on venture capital and see the value in a partnership structure with aligned incentives. Some of our capital partners may not have the internal infrastructure or experience to support a demanding venture portfolio, but are keen to share with us their global industrial networks and skills. These relationships exemplify the collaborative model Concentric is looking to expand even further and we are grateful to our early supporters. Collaboration is at the core of our working philosophy and this is also why we have decided to be transparent about our structure and incentives towards stakeholders and broader ecosystem partners. Going forward we aim to continue to innovate on how venture capital funds operate and are structured to achieve an ever-greater alignment of interest while maintaining flexibility of capital deployment.
Exciting portfolio being carefully nurtured
Since we started investing in 2013 we have assembled a portfolio of 16 exciting companies with a number maturing to occupy leading positions in their respective verticals. To source, execute and manage these we have assembled an experienced and hungry investment team and an advisory council that will enable us to catapult the portfolio to the next level whilst adding new portfolio companies throughout 2018. We are proud that all our team members and advisors invested personally into Concentric or will share in the carry economics. We look forward to growing professionally and as individuals alongside our portfolio companies – learning from each other and sharing the economic rewards in an equitable manner.
The first of many chapters
This is just the beginning of our journey and we feel we have put into place the building blocks to enable Concentric itself to prosper as well as play an integral role in the growth of the European venture community.
Concentric participated in the Public.io’s latest investment round.
Public helps technology startups transform public services, providing capital, networks, insight and support. Led by ex-deputy head of the No.10 policy unit, Daniel Korski, and venture investor, Alexander de Carvalho, Public’s team has operational experience of government, startups, technology and finance, to help startups do business successfully with the public sector.
In March 2017, Public launched applications to GovStart, a growth programme based in London to get startups ready for the public sector, and help them through the sales cycle. Pockit, a Concentric portfolio company, is part of the first GovStart cohort.
Co-working space startup Huckletree has announced a funding round of £4.5m with investment manager Meyer Bergman. Huckletree joins the London-based real estate investment group’s portfolio alongside retail space marketplace Appear Here and app company POQ Commerce.
Gabriela Hersham, chief executive and founder of Huckletree, said the partnership with Meyer Bergman leaves the company “well positioned for 2018 and beyond”.
Huckletree has launched a new flagship space in Dublin. Huckletree D2 is a workspace and accelerator for startups and entrepreneurs based in the heart of Dublin’s tech hub. 400 members will be housed across 30,000 square feet of space including private studios, dedicated desks and hotdesks.
Huckletree is officially open in West London at White City.
Huckeltree’s first digital lifestyle workspace is based in the former BBC Media Centre and focuses on a curated community of media, fashion, gaming and VR-focused startups and entrepreneurs.
Check out the new location at https://www.huckletree.com/locations/west
Concentric closes a new investment into DueDil.
DueDil is a private company information platform that enables businesses to find opportunities and mitigate risks. DueDil provides authoritative data and rich context on over 40 million companies across 9 European countries.
Stockholm was the stage for the inaugural Family Office summit organised by Concentric and the af Jochnick Family. The purpose was to bring together likeminded, entrepreneurial family offices from around the world and build relationships to the advantage of all.
Hypaship, the leading provider of Delivery Management Software (DMS) and Carrier Operating Software (COS) have secured an additional £1m investment led by Concentric.
The investment will ensure HypaShip continues to provide the most comprehensive full- featured software in its current markets, while also funding expansion into new geographical areas.
Prettysocial media (PSM) completed a new financing round led by Funke Media.
Based in Berlin, Funke Media is one of the leading German publishing houses, with a particular focus
Funke took a stake of 25,1% with a goal to expand its strategic relationship with PSM.
For more information, please visit: http://www.prettysocialmedia.com/pressrelease-funke
The London Co-investment Fund (LCIF) – the Mayor of London’s early stage business fund – has selected five new co-investment partners to join its existing Tech Fund.
We are delighted to announce that Concentric is one of five managers selected to be a partner of the London Co-Investment Fund. Concentric will co-invest with existing partners in cutting-edge tech start-ups – specialising in areas such as fintech, AI and big data – who are based in London and ready to accelerate their growth.
Since LCIF was launched in 2015, it has invested £14 million into 88 tech companies, which have attracted more than £98 million in external funding from its co-investment partners. LCIF has created more than 600 new jobs and safeguarded a further 250.
“Collaboration is at the centre of Concentric’ thinking and investment philosophy, and we appreciate and value the work London Co-investment Fund is carrying out. Thus we are delighted to join the LCIF partner network to further enhance and grow the London ecosystem and to fund world-class technology companies” – Kjartan Rist, Managing Partner, Concentric.
More information on:
Pockit had been accepted into the inaugural cohort for GovStart, an initiative that offers a wide range of support to start-up companies trying to solve public sector problems like financial exclusion.
Organised by Concentric and ERMAK in collaboration with Forum.
A talk by David Wood – A true pioneer of the smartphone industry.
What Does Society Look Like When Technology Makes Us Redundant?
David Wood is co-founder of Symbian, the creator of the world’s first successful smartphone operating system which launched in 2008. Following, he and his teams wrote the software used in the world’s most iconic smartphones including Nokia, Motorola, Sony Ericsson, Samsung, LG, Fujitsu and Panasonic.
Now a full-time speaker, analyst and writer, David heads up London Futurists, a non-profit networking meet-up with approaching 6,000 members. He has chaired over 150 public events on techno progressive and futurist topics.
You’ll see his name on six books including ‘Anticipating 2025: A guide to the radical changes that may lie ahead, whether or not we’re ready’ and, most recently, ‘The Abolition of Aging’.
PayAsUGym won the innovation award for ‘Best Health & Fitness Innovation’ at the Elevate 2017 event. The award was granted for the launch of company’s ‘Monthly+ Pass’ initiative, which enables gym operators to tap into the fast-growing multi-club member market by listing their club within the PayAsUGym marketplace.
The Elevate Innovation Awards sponsored by Fitness Compared are a series of awards for the best products or services in certain categories.
Pockit closed £2.9 million round in further funding and will soon begin to provide a remittance service which will make the process of sending money abroad much easier. This May Pockit’s 150,000 customers will be able to send money to Poland and to Italy, the rest of the Eurozone countries will follow in June. Over the next few months, several countries outside Europe will also be connected, starting with Philippines, India, Pakistan, Bangladesh, Ghana and Nigeria.
Read the full story on:
The history of family offices – private wealth management vehicles established by high net worth families – has long been entwined with that of venture capital. Indeed, several leading VC firms, including Bessemer Venture Partners, Greylock Partners, Frog Capital and Atomico, have emerged from family offices, while many wealthy families have built their fortunes through entrepreneurship or by investing in (or managing) early-stage businesses, and thus have it in their blood.
With, according to some estimates, $4 trillion held in family offices globally today, the diversity of investors from the family space in VC is on the rise. Against a backdrop of intense media interest in the tech startup ecosystem more generally, and a younger, more tech-savvy generation taking over the running of many family offices from their parents, research from Concentric (my firm) last year uncovered a huge and growing appetite for VC among these funds.
Based on conversations with more than 300 family offices worldwide, we found that around 70 percent of those we spoke to are already actively investing in or evaluating exposure to tech VC. However, the majority of them are having a decidedly mixed experience of investing in the asset class and, perhaps still licking their wounds after earlier forays, remain unsure about how best to approach it.
This has grave consequences for Europe’s tech scene.
European VC has a well-documented and persistently large funding gap with the U.S., which threatens the continent’s medium-term viability as a startup hub. Despite Europe as a whole incorporating more tech companies than the U.S., possessing five of the top 10 computer science schools, and producing more developers, European startups receive just a fraction of the funding of their U.S. counterparts. Until this is remedied, Europe will continue to lag the U.S. as a producer of tech unicorns, not to mention global brands on the scale of Amazon, Apple, Google, Facebook, and Snap.
Along with large corporates (who are increasingly investing in and acquiring startups, as well as hothousing their own) across Europe, family offices – with a global average of $759 million in assets under management – must be a major part of the solution to plugging this gap.
From a VC and startups point of view, ramped up involvement of family offices is a no brainer. Nimbler and less bound by rigid processes, family office investors frequently have deep networks and the ability to open doors more effectively than institutional investors, while the capital required for VC investment is relatively small compared with the wealth many single or multiple family offices manage.
It makes perfect sense from the other side of the table too. Many family offices are in search of higher yields from their investments and are gravitating towards riskier products with better returns such as VC, which also offers the allure of potential (if statistically unlikely) blockbuster investments.
Furthermore, Concentric’s research indicates that the generation currently taking the helm at many family offices have an innate understanding of and affinity with tech startups and disruptive business models.
Clearly family offices cannot bridge Europe’s funding gap alone. Closing the gap will require a coalition of national and city governments, corporates, and institutional and angel investors alongside high net worth families. And for that to happen, we’ll need to see a shift in mindset towards VC generally in Europe, which is still perhaps two generations behind the U.S. on this front.
On the other side of the Atlantic, there is a greater propensity to take risks, a stance that pays off in the long run, because VC creates value over and above a specific investment. In the U.S. it is widely understood that talented but failed first-time entrepreneurs are simply success stories in waiting, who will be in a better position to succeed next time around. In some parts of Europe, by contrast, there lingers a stigma around failure, which impacts capital allocation.
But, slowly, as Europe’s tech startup boom continues, attitudes to risk are changing amongst both institutional and private investors. From our extensive conversations, there is unprecedented interest among family offices to invest in the next wave of European innovation and R&D, thereby increasing the volume of startups that reach escape velocity, as well as thrive at growth stage and beyond.
We are now at a critical juncture. If European tech’s momentum isn’t to fade away, we need family offices to punch their weight and allocate far more investment into VC. Without them, we will fall further behind not just the U.S. but other parts of the world, including Asia.
From a humble beginning in 2015, Airsorted has grown to the World’s largest Airbnb Management Business. This month Airsorted is passing its second birthday. James Jenkins-Yates, CEO and Founder is telling the whole story of the company’s success:
Pockit is invited to join Upscale 2017 and will receive mentoring from world class coaches.
Upscale is a six month programme developed to help the most promising early stage startups to begin their scaling journey. It includes curated workshops and mentoring sessions designed to speed up growth and address the most challenging barriers these companies can face.
Upscale is managed by Tech City UK, launched in 2010 by Prime Minister David Cameron and Internet Safety and Security Minister Joanna Shields.
More information on:
Neteven announces a new website, new release of its software, new clients, new functional and new marketplaces.
All information on:
Airsorted announces the closing of a circa £1.5 million investment led by Concentric.
Based in London and operating across three offices, Airsorted is a homestay management service that allows homeowners to maximize rental income from renting out their property on a short term basis.
Airsorted currently manages close to 1,000 properties throughout the UK and Ireland, making it the largest such service in Europe. The company’s proprietary technology allows it to automate substantial parts of the property letting, pricing, marketing and management aspects, ensuring homeowners achieve the optimal blend of rental yield and customer service.
The investment will enable Airsorted to further cement its position as product leader and expand to new markets.
More information on
Since its launch in 2014, Pockit has attracted more than 100,000 customers and services over £100m of client transactions.
Over the next year Pockit plans to continue its market-leading product innovation by launching direct customer account numbers and sort codes as well as remittance, direct debit and micro overdraft services in a bid to build UK’s first integrated online banking service offering.
More information in recent press coverage:
Concentric in partnership with Bloomberg are delighted to announce E-Wellness & Technology Trends 2016 panel discussion that took place on September 8, 2016 in London.
This event was organised to explore key aspects of how technology is changing consumer’s and industry participants’ behaviour in the wellness sector.
The panel featured speakers from the leading companies in fitness and wellness industry.
You can view video recording of the sessions here:
- Introduction and Keynote
- Millennials’ buying and consuming habits
- Utilising Big Data to monetise wellness
- Virtual reality and gamification taking off in cycling – is this the future of sports and fitness?
- Closing remarks
We hope you find it helpful and we look forward to seeing you at our next events and to keep the dialogue.
Concentric, the European technology venture partnership is happy to announce the first close of the ‘Concentric I’ fund.
Established in 2013 and with offices in London and Copenhagen, Concentric targets fast growing digital technology businesses across Europe, focusing on backing talented entrepreneurs building capital-efficient business models with the potential to establish global footprints. The Concentric portfolio currently comprises five investments: Pockit, PayasUgym, Neteven, Billetto and PrettySocial Media. Final close of the fund is expected during 2017.
Founding partners, Denis Shafranik and Kjartan Rist – formerly of Barclays and DN Capital respectively – have an established track record in investing, nurturing and exiting technology companies. They are joined by COO Mark McDonald, previously with DN Capital and TLcom.
Concentric’ key emphasis is on proactive collaboration with entrepreneurs and alignment of economic interests significantly favoring the fund’s capital partners – the latter goal illustrated by reduced management fees, a preferred return and carried interest structure which favor the capital parners, together with a substantial fund commitment Concentric’ management executed.
Capital alone is a commodity; the additional contributions offered by Concentric above and beyond pure capital are what differentiate it as a fund and enable its partners – whether entrepreneurs, founders or management teams – to benefit exponentially from advice and collaboration across business development, recruitment, marketing and product enhancement, strategy evolvement, follow-on funding and other key growth areas.
The European investment environment is developing fast. Concentric is building close partnerships with global family offices as principal capital partners and adopting a hands-on approach to investing and building companies, Concentric is looking to establish itself as a household name in the European venture marketplace.
‘How Cyber-attacks Steer the Course of International Politics’
For the second year Concentric and ERMAK co-hosted the regular Technology Forum. The speaker this year was Cathal McDaid, Chief Intelligence Officer at AdaptiveMobile.
Cathal discussed Geo-politics & Cyber Security, and how cyber-attacks steer the course of international politics. His bio is summarised below.
AdaptiveMobile is a privately owned mobile security company that works with 70 mobile operators around the world to protect the security of over 1.5 billion mobile phone users. Cathal is responsible for a global team dedicated to stopping cyber-attacks on mobile devices, as well as researching, uncovering and counteracting new threats. Cathal has over fifteen years’ experience in telecoms and security, has been interviewed by the BBC, Forbes, Bloomberg and USA Today, and has been a guest speaker at the world’s top security events.
Currently, he is leading the industry effort to secure the global mobile telecom infrastructure from newly-discovered critical vulnerabilities. Previously, he was Chairman of the GSM Association’s Mobile Malware Group. His academic background includes a BEng (University of Limerick) and an Executive MBA (INSEAD).
At Concentric we have ongoing discussions with family offices in relation to their venture exposure. Over the years it has become apparent that families are struggling with this particular ‘asset class’. Most families would like exposure to venture capital but are unsure in what form, or what such engagement could look like.
Denis Shafranik was invited to present Concentric findings on families’ approach to venture capital at the 3rd annual Global Family Office Conference in London.
Combined with some background facts on family offices, the purpose of the presentation was to surface some of Concentric’s key findings gathered as a result of discussions with 300+ family offices across the world. We also aim to use our findings to make predictions and to elaborate on key trends in family office venture capital investing.
The case study is attached.
In cooperation with Bloomberg, earlier in May Concentric organised an invite only Tech Excursion to Oslo and Copenhagen.
The Participants, mostly international venture investors, were able to get an insight into the start-up scene in the two countries, as there were 10 pitches in each of the cities.
In addition Concentric organised two panel debates where critical aspects such as investment frameworks, role models, culture, internationalisation etc. were discussed, with input from some of the leading local thought leaders, entrepreneurs and investors.
This note presents the overview of the event.
The Financial Inclusion summit, organised by Concentric in partnership with Bloomberg marks the second event in a series of events discussing and highlighting some of the most current topics across technology and business.
We decided to focus on financial inclusion, given the topic’s increasing prevalence in today’s world. To the untrained eye, financial inclusion might appear as a concept associated with the developing world, but it could not be further from the truth! Some of the facts and figures which we saw demonstrated that financial inclusion is indeed a world-wide problem. It’s a problem which should be addressed by both the public and the private sectors (and we indeed had participants from both sides of the fence) and one where technology, as an enabler, could be of great value.
Learning from our previous experience with the ecommerce event, we are also including links to the videos from the different sessions:
- Introduction & keynote
- The importance of financial inclusion
- Mobile and financial inclusion
- Financial inclusion products and delivery
- Closing remarks
This note presents the key findings and messages from the different panels, highlighting some of the unique insights we heard through the morning.
We hope you find it helpful and we look forward to seeing you at our next events and to keep the dialogue.
Concentric in collaboration with Bloomberg conducted its first seminar on cross-border eCommerce.
The core discussion panels were represented by leaders in their respective verticals: Alibaba, Global Fashion Group, Privalia, PrettySocial, Ebay, Neteven, Hybris, SAP, IBM, Currencies Direct, Worldfirst, Accenture, Temando, Docdata, B2CEurope and Arvato.
Presenters covered a wide range of topics including trans-continental trade, emerging trends in the global eCommerce sector, success stories from emerging markets, as well as outlook for the next 10 years.
Links to videos from the day’s sessions:
- Keynote: Growing Globally
- Panel I: Go Global
- Panel II: Raise the Operational Barriers
- Panel III: Choose the Best Logistic Solution
A summary transcript of the event can be found here: