Founder and CEO of Breed Reply, an investor in early-stage companies focusing on the Internet of Things (IoT), Emanuele Angelidis knows all about disruption. Having worked for 15 years in the Italian telecoms sector, where he was co-founder of Fastweb, now one of the largest companies in the industry, he witnessed the sweeping changes brought about by the introduction of mobile. After his move to the UK, he turned his hand to angel investing both in and outside Europe, and realised that IoT would be even more disruptive than mobile. We spoke to him to find out why.
How did Breed Reply come to be formed? Why do you focus on IoT?
I had a chance meeting with the chairman and founder of Reply in 2014; we had known each other since 2000. I told him about my decision to focus on IoT and also my ideas for a slightly different business model, and he was keen to invest too. As an entrepreneur myself, I know how crucial timing is and how difficult it is to deal with so many conflicting priorities. I wanted to fund start-ups, but also to provide them with essential operational support for the first 12 months – in the form of sales and marketing, technology, strategic and financial advice. Breed Reply gives early-stage companies the know-how and power to accelerate growth, and helps them use the vast Reply network when they are ready to go to market.
We believe that IoT will be extremely pervasive, not just for individuals but for companies, too. Mobile didn’t necessarily change how companies perform, but IoT will have a profound impact on their business models – with the ability to track information and analyse data in real time, turning outcome into actions.
What sparks your interest in a company? How does one instantly stand out from another?
We are interested in IoT companies across all industries – healthcare, manufacturing, transport, data security. What really makes a difference is the management team. I’ve seen brilliant ideas fail because they have been badly executed. A capable and knowledgeable management team is crucial.
Another key factor is to ensure your idea is answering a real market need, bringing a new solution to a problem. At Breed Reply, we want our companies to have long-lasting business models, taking into account regulatory changes, development in technology and competition.
How does Breed Reply get involved with the companies it invests in?
Our involvement takes many forms. We check in on a weekly basis and set up monthly meetings with scorecards for objectives. We help with defining strategy, finalising contracts, assist in improving the manufacturing process. In addition, the Reply team comprises over 5,000 people throughout Europe and the US, so we can help with connections and networking, which is very important for start-ups.
What are your current projects/involvements? How do you go about searching for new and interesting companies?
We started investing at the beginning of 2015; with an average of about six to eight companies per year, we now have around 20 companies on our portfolio. Our team is always scouting for new opportunities and we just completed our seventh twice-yearly ‘Best in Breed’ programme, where we invite pre-revenue or early-stage companies with an innovative premise and a prototype to show, to apply with their investment cases.
But there are many other sources – traditional referrals from other funds or co-investors, IoT conferences, events where Breed Reply are speaking or chairing panels. There are lots of things going on in Europe, with new opportunities all the time and evidenced by the fact that over the last few years, more and more US investors are coming to the continent.
What happens internally once you have identified a company that meets all of your criteria? What advice would you give to a potential applicant?
Once a proposal has gone through the screening process, we will meet with the company and conduct our due diligence. We are sector-agnostic, as there is so much to be done in every industry, so much improvement that IoT can bring. My advice is to ensure your idea is innovative. Do a sanity check that you are actually providing a solution to a real problem, with a business model that is sustainable in the long run.