Navigating the murky waters of the start-up ecosystem as a fledgling tech company can be both exciting and daunting in equal measure. Executing upon your vision brings with it many challenges, some of which may currently seem insurmountable. However, there are companies out there that can help. Seedcamp is a First Round Fund that invests in the most ambitious global founders to help launch them from inception to IPO. Since 2007 they’ve invested in more than 200 companies, such as Transferwise, Property Partner, Ubervu, Rentmineonline, to name a few. We spoke to Reshma Sohoni, one of Seedcamp’s founding partners, about the fund, as well as her involvement in the upcoming LendIt Europe’s PitchIt event.
Can you tell us a bit more about your background and what prompted you to form Seedcamp?
The world looked quite different 10 years ago than it does today. Fresh off the initial dot.com burst and the ’07 financial crisis, there was a very difficult atmosphere and environment in terms of start-up funding. In short, there were a few of us that started Seedcamp together, we felt we really needed to bring the entire ecosystem together at the time, whether it was lawyers, accountants or particularly VCs and angel investors, to really give a boost to the whole world of encouraging start-up activity, especially European entrepreneurs to get onto a global stage.
So I think we just saw an opportunity to bring proper support for start-up founders to get themselves off the ground.
Seedcamp is now in its 10th year, how do you feel the funding landscape has evolved during this time?
Yeah, I think dramatically. I think our view at the beginning of when we set up Seedcamp was that one single part of the value chain of growing companies, public companies and multi billion dollar companies, is never enough, it’s just solving one piece of the value chain.
I think if we look at the landscape now ten years’ on, every piece of that is compelling and has grown ten X. That’s angel activity, that’s founder activity including knowledge of markets, how savvy they are and the types of people that are deciding to start businesses, instead of going down a financial career or a consulting career. So, quality of founders, angel investors, and the number of VCs. Also, how fast money moves around now has changed dramatically, even across borders. Investors from Asia, US, all over Europe, are doing deals not just in the UK but across continents as well. Increased M&A activity, slightly less than I think ideal, but still increased activity in the last few years, and just more sustainable independent companies that are becoming large scale, employing a few hundred or thousand or so people within the tech sector.
So yes, it’s like a ten X increase across every piece of the value chain.
Since the founding of Seedcamp, you’ve invested in a wide variety of companies over the years. What types of companies are you most interested to hear from at ‘Pitch It’ this year?
At Seedcamp we invest early in founders attacking large, global markets and solving real problems using technology. That focus on disrupting an industry that’s crying out for change and has real, tangible benefits for people is what I’m interested in seeing. And that could be across all manner of sectors. We’ve seen it in finance, legal services, insurance – you name it.
What makes a company investable to Seedcamp? Is there a set criteria you tend to use?
Yes. I think true to our DNA, we’re really looking for globally minded businesses, so whether that ultimately happens or not of course is dependent on the execution of a particular business, but ideally we want to be globally applicable. So a huge ambition goes along with it. We ideally want teams rather than individuals, comprehensive and complementary skills within that early founding team.
The second is, we want to see clear differentiators and the ability to build a defensive positioning in the market. So whether that’s a core technology that’s a differentiator, defensible, or whether it’s the approach to the market, that really matters a lot to us.
And I think lastly, people’s ability to just really forge ahead, be tenacious, persevere through the ups and downs and really execute on the vision and the technology.
Aside from the funding, how else will companies benefit from working with Seedcamp?
Having successfully been operating for over 10 years we bring a comprehensive network as well as our experience, and really bring that to forebear on behalf of our companies. We are essentially over the next few years doubling down on the quality of the network in terms of the peer network that our companies have – nowhere else can they get access to five hundred founders who have been through exactly what they have been through, whether that’s three months, six months, a year or even three years before them.
Through every stage of a companys journey there are different learnings and insights to gain, so the peer network is huge. Our own investor base of having 60 / 70+ different investors in our own fund, is incredible access. These are people who have built all the best technology companies that have come out of Europe.
So access to that network and then a general operator network that our companies have access to, which is people who have built companies that we all use and hear of – so the Just Eats, the Deliveroo’s and the Trans Providers and so on and so forth.
So, really it’s about accessing an extremely high quality network to help make better decisions as founders.
And finally, you’re a judge at the ‘Pitch It’ event at LendIt Europe. It seems like a great way for companies to get exposure and promote themselves. As well as hopefully secure funding, what’s your involvement with this event and what types of companies are you hoping will enter the ‘Pitch It’ event?
I think given our criteria, and the focus of LendIt Europe, we hope to unearth a few of the types of teams we like to back and have some of that defensibility, as well as a huge vision for the kind of business they’re building and what opportunities they’re going after. That sector is just wide open and there’s so much to play for within the space.
LendIt Europe, the largest European event series specialising in fintech and lending, is hosting the PitchIt competition throughout the conference, which takes place in London, 9th-10th Oct ’17. LendIt have also launched mentoring for startups in VC 1:1 sessions with the introduction of their VC office hours, allowing startups to receive advice for their funding.