Investments in industrial startups only makes up 1% to 1.5% of total Venture capital funding in Europe. Marie-Helene Ametsreiter, lead partner overseeing investments in the industry at Speedinvest international venture fund headquartered in Vienna, spoke to Invest Foresight about industrial startups can succeed.
How did Speedinvest start and what is your philosophy?
Speedinvest is a European venture capital fund established in 2011. It began as a small micro fund of €10 mio AUM, which now grew into €400 mio+ AUM with over 40 investment professionals in Berlin, London, Munich, Paris, Vienna and San Francisco. The founding partners of Speedinvest have entrepreneurial roots, hence the founders first mentality is strongly embedded in our core values and culture.
Our goal is to back visionary founders and help them realize their dreams. Unlike many traditional venture capital firms, Speedinvest actively supports startups with operational activities. We have two affiliates called Speedinvest Heroes and Speedinvest Pirates with 20 full time specialists. Through these entities our portfolio companies have access to a wide variety of experts in HR, marketing and business operations. We also offer onsite support from San Francisco for portfolio companies expanding into the US market. The combination of entrepreneurial experience, operational support and strong industry network creates enormous value-add and differentiates us as Europe’s leading seed investor.
What are your most important areas of focus and investment criteria? At what stage should startups apply?
Speedinvest is an early growth investor focusing on pre-seed, ticket size typically ranges from €100K to €250K, and seed rounds, normally from €500K to €2 mio. We fund innovative early-stage technology startups in the areas of Fintech, Digital Health, Consumer Tech, Network Effects, Deep Tech and Industrial Tech. By organizing our investment team into these five sector focused funds we fostered deep market expertise and relevant industry networks. We prefer to lead the seed rounds – invest the largest share of capital relative to other investors, and thus are conviction driven when it comes to selecting companies.
What are the most interesting projects and deals you could name?
Our portfolio includes some of Europe’s fastest growing tech companies, such as Wefox (€235 mio Series B), TIER Mobility (€55 mio Series B) and Curve (€50 mio Series B), along with rising stars CoachHub, TWAICE, Billie, TourRadar, Inkitt and Agro Club. In Russia one of our most interesting investments is Conundrum.ai – a machine learning platform that helps companies in the heavy industries to substantially increase operational efficiency through predictive analytics. The founding team has extensive machine learning background from McKinsey, Point72, Sberbank and NVIDIA, and are working with global steel and mining companies. In the context of decreased sensor costs and increased computation power, Conundrum.ai has hit the sweet spot in terms of timing and product-market fit. We are excited to observe their growth in the upcoming years.
What kind of founders are you looking for?
As an early stage investor, we strongly believe that founders are critical to the success of any venture. Best founders choose their investor and not the other way around. In a nutshell, we are looking for a diverse founding team with a big vision, clearly defined problem-solution, as well as a defensible and scalable business model. We also emphasize a founder-product fit by asking ourselves – “is this the best founding team to solve this problem?”
What recommendations would you give founders in fund raising?
There are three recommendations that we provide in fundraising.
First: Make yourself discoverable. The vast majority of our investments originate from active search – monitoring press releases, events and referrals from our network of angels, accelerators, limited partners and venture capital firms. We frequently contact the founders directly and thus having LinkedIn and CrunchBase profiles makes the outreach easier.
Second: Be prepared and transparent. At the end of the day, a VC relationship is like a marriage and by fostering a collaborative relationship from the start you can make a great impression. Often startups have two decks – an intro deck sent upon request and an extensive deck that covers the traction and financial KPIs such as LTV, CAC, MRR in greater detail. A data room containing all relevant documents is essentias for the due diligence process. Nothing beats working with founders that are organized and quick to respond.
Third: You only need one “Yes”. At an early stage getting funding can be a challenging process, but at an early stage you only need one “yes” to close the whole round. Therefore, the golden rule is – take into account feedback given by investors and just keep going. VCs are often forced to say no to business models that are sustainable, but are unlikely to have a rapid growth trajectory necessary to hit 5x or greater returns. At Speedinvest we are always excited interact with founders, and in the case that we do not pursue an investment opportunity further, we are committed to providing feedback and are open to resume contact at a later stage.
Do you work with Russian companies or investors?
The venture capital world is a close-knit community that is rarely defined by geographical boarders. Hence, we collaborate with different corporates, venture capitals firms and accelerators in Russia. For instance, we invested in Agro Club – a marketplace that has approximately 20% of Russian Farmers registered, together with Elevator Ventures – corporate venture capital arm of Raiffeisen Bank.
In your opinion, what areas of Industrial Tech will be highly important in the next 5 years?
As part of the Industrial Tech focus fund, we believe that 3D printing, robotics process automation, digital twin, sensors, machine learning and computer vision will be the key technological drivers underpinning the fourth industrial revolution ‘Industry 4.0’. The industries that will experience enormous efficiency gains and unlock new business models are Automotive, Manufacturing, Logistics & Transportation, Aviation as well as Construction. If you have a startup in these areas – my team would be excited to hear from you.
By Christina Firsova