Speedinvest is not only the the biggest VC fund ever raised in Austria, but proposes a new take on early stage venture that challenges a lot of traditional assumptions how VC works.
Speedinvest differs in many ways from comparable funds in Europe.
First of all, the capital is provided by more than 100 entrepreneurs and private investors, rather than a few institutional investors. The list of backers behind Speedinvest is impressive, ranging from Dietrich Mateschitz, Red Bulls iconic founder to Herman Hauser, or the latest generation of successful founders of startups such as Runtastic, Shpock or Busuu. This is in stark contrast to the typical European fund where often more than 50% comes from taxpayers. What does this mean for startups? The majority of Speedinvest’s investors actively co-invests and in some cases collaborates with selected portfolio companies.
In May the fund also announced its collaboration with New Enterprise Associates (NEA), the world’s largest venture fund by assets under management. NEA invested 5M USD in Speedinvest 2 and reserved 50M USD to drive global growth in Speedinvest’s portfolio of top EU startups.
So what is this new take on venture that attracts such attention?
To start with, Speedinvest is run by a total of 12 partners, 3-4 times the size of the teams that operate similar sized funds. These partners spend most of their time in full-scale operational roles for 1-2 portfolio startups each, typically executing business and corporate development functions in the US or Europe, thereby extending the resources of a given startup team by senior people, network and experience that an average seed stage company simply could not afford. If all goes well, the fund earns additional equity points with the contributions coming from these partners, at minimum founders and investors work side by side for given time, completely changing the dynamics of such relationship.
How does this work for the GP’s, given that Speedinvest charges industry standard fees? Very similar to startups! In stark contract to their well paid collegues, SI Partners receive salaries similar in size as the founders that they invest in. But, in turn, they particiate directly in the funds returns, with a portion of every exit’s proceeds going also in their pockets.
This entrepreneurial model has proven to be very successful in the first fund, with Shpock as its biggest success so far, four further exits and companies such as Hitbox, Holvi, Wikifolio, Flaviar or Tourradar that are on to great things.
Oliver Holle, CEO of Speedinvest comments “The feedback from investors was overwhelmingly positive, confirming the appetite for innovation also in our field. Venture investing is undergoing massive change and we intend to play an integral part in Europe newly emerging VC landscape.”
With the inception of its new fund the team is now sourcing startups from all over Europe, with a strong focus on the CEE region. It will stick to its core strength: as a lead investor at seed-stage with tickets up to 500k. Beyond that, it has reserved roughly half the fund for follow on investments in its own portflio.
The new fund has three core sector focuses: Fintech, Deep Tech and Consumer.
The Deep Tech segment caters specifically to tech founders in Europe that need to bring their world class IP early on to US customers and partners. Given Speedinvest’s operational support model and its team in Silicon Valley, Speedinvest is perfectly positioned to help them.
In fintech, Speedinvest has further strenthened its portfolio under the lead of industry expert Stefan Klestil (board member in Wirecard, Holvi, Number26 or IyziCo, to name just a few) with investments in Curve (http://www.imaginecurve.com/), a London-based smartcard aggregator, and Investly (https://investly.co), an Estonian e-factoring platform.
Since the first closing of the fund earlier this year Speedinvest has already invested in 14 across all of Europe. Building on the skills of eastern European tech talent the fund invested in Hungarian Slush winner Enbritely (https://enbrite.ly), an ad-fraud detection startup and Sofia-based Metrilo (www.metrilo.com), a solution for SME eCommerce entrepreneurs.
To identify the most promising founders very early, Speedinvest has has built a strategic partnership with Pioneers Ventures (pioneers.io/ventures), a pre-seed fund investing 20 to 100K in Europe’s best, nascent companies.