Tech EU article: The reverse pitch
12 November 2019
Concentric was founded by Kjartan Rist and Denis Shafranik in 2013. The firm invests across many different industries, looking for the best opportunities that use technology to drive efficiency and empower consumers. Concentric views investment as a partnership, and the team endeavors to challenge paradigms of venture capital firms that rely too heavily on management fees as a profit generator while remaining disconnected from investee companies. The team aims to “contribute personally” to the companies they invest in, by building a sustainable, fair, and solid support structure for their portfolio companies. Concentric has supported some integral institutions in Europe’s startup infrastructure, including Seedcamp, Entrepreneur First, and Huckletree.
Concentric’s investment strategy indicates they do not shy away from a long term commitment to new technologies. In 2019, Concentric has made seed investments in Coindirect, a London- and Cape Town-based SaaS and transactional payments company, and in Estonia’s Black Insurance, an insurtech marketplace. This year, the firm has also invested $5m into Wheely‘s Series B round. Wheely is a London-based ride-hailing company that differentiates itself with an emphasis on luxury, safety and zero surcharges. Concentric is headquartered in London and has an additional office in Copenhagen, Denmark.
I connected with the Concentric team to learn more about their investment approach and the one company that they were most sorry to miss out on!
Thank you Concentric for taking the Reverse Pitch! Can you summarize your investment thesis in three sentences?
We invest in early stage tech businesses (Seed+ to Series A) where we see a real alignment with our interests and commercial expertise. We are ‘activist investors’ because we like to be hands-on with our portfolio companies and consequently, we are always looking for strong founding teams with whom we can build successful, long-term relationships. Historically we have focused on more traditional sectors of the economy, which are being transformed by tech, like financial services, proptech and mobility.
What industries and business models are you most interested in investing in?
We are a generalist fund, however, our primary focus areas are financial services, proptech, mobility and industrial sectors.
Which technologies do you find most exciting right now, and why?
We are less interested in specific technologies and more interested in the use-cases and business models where they are being deployed. Many of the most exciting and disruptive technologies are still in their infancy, which means that it could be years before solid use-cases are found for them. What is interesting to us is how technology is being used to drive efficiency, reach new markets, cut costs and empower consumers – now or in the near future. Right now, for us, this is happening in sectors that have traditionally been slow to innovate and that are therefore undergoing rapid change. For example, in insurance, logistics, and health where supply chains are being made more efficient, helping businesses to cut costs and enabling a much-improved experience for the customer.
How much do you typically invest?
Our typical cheque size ranges from €0.5m to €5m and depends on the commercial development of the business as well as, of course, capital requirements going forward.
Beyond funding, where does Concentric provide the most “value-add” for founders?
Simply put, we are not afraid to get our hands dirty and so we get involved wherever we can be useful. Typically, we invest at a very delicate stage of a company’s life cycle, when they are just beginning to commercialise and are looking to scale up aggressively. There is no room for error and consequently they require a lot of support – from general strategic input, to hiring, business development and assistance with legal and financial matters. We find helping to put together the equity story and ensuring it is delivered on to be the most useful guidance we can provide. However, we have been integral in placing senior hires for a number of our companies too. It isn’t unusual for us to spend time working in our portfolio companies’ offices and, when we aren’t there, we are always at the end of the phone, to brainstorm issues with them. We are also always looking for ways to bring our portfolio companies together, like we did with Huckletree and Public in order to launch the world’s first govtech dedicated accelerator and co-working space, right in the heart of Westminster.
Do you have any geographic restrictions on investments?
We focus on Western Europe, in particular the UK, the Nordics and Germany, however we have no geographic restrictions on where we can deploy our capital.
What is your commitment to diversity and inclusion?
We focus on diversity of skills and thought only.
What’s one investment from your Anti Portfolio that you wish you hadn’t passed up?
UiPath! Their seed round completed in the midst of us setting up our first fund.
If you could invest in any type of business or technology right now (real or imagined) what would
Unity, the game engine. Incredible product that has captured an entire market. What’s more, it’s a market that is only going to increase in importance as virtual environments become ever more compelling.
What is the best way for founders to get in touch?
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 feel free to drop us a line on there. Generally speaking, the old-fashioned personal approach works better in the VC industry.
By Natalie Novik