An interview with Mike Chalfen of Mosaic Ventures, a $140m VC fund with its sights set on the Nordics

Inspired by, and with the blessing of Requests for Startups, this is the second in a series of articles interviewing some of the most active investors in the Nordics (the first was with Ekaterina Gianelli of Inventure) in order to get an insight into what they are looking to invest in, what problems interest them and their predictions for the next twelve months.

Next out is Mike Chalfen of Mosaic Ventures, one of a multitude of recently formed funds that have their sights set on the Nordics.

Mosaic is an early-stage VC firm based in London with a $140 million fund, primarily focused on Series A. Although they have the freedom to invest anywhere across Europe, they are particularly bullish about Northern Europe and the Nordics and have a strong focus on the region.

I had the pleasure of meeting Mike face to face a couple of weeks ago at Arctic15 and he told me that at the minute one of their priorities is to build strong relations with prominent angels in the Nordic scene.

Mike himself has a strong track record in Nordic investments having been the lead investor in Candy Crush Saga maker King when he was previously at Apax Partners, so he already benefits from being knowledgable and well connected with the Stockholm (and Nordic) ecosystem.

In fact, Mike was as passionate and excited as me about the future of the Nordic scene, specifically mentioning that the exits that the Nordics have already seen have produced liquidity that we're now beginning to see coming back into the scene through serial entrepreneurs and angels, making the next 10-20 years exciting to watch unfold.

I asked Mike directly what type of investments they were looking to make, and he said thematically 'fintech' and 'marketplaces' are of particular interest, while also mentioning education, health, analytics, security and open source. And that leads us on nicely to our first official question.

What startup verticals interest you most right now?

There are two mega-trends in software as a service that, for all SaaS's supposed ubiquity, lead us to think the best of the new models offer real improvement over previous generations of business software.

• Mobile native applications, which could only exist with devices in the hands of millions of end users
• Machine learning, capturing and using data as it flows over a SaaS platform, leading to more intelligent applications that will predict needs or programmatically execute transactions. This brings user, data and transaction-level network effects to SaaS

Another trend which is really interesting is the rise of new data services that gather dispersed information sources, including crowdsourced data, make sense of them using natural language processing and machine learning techniques, and present or act on them as part of everyday work.

This has the potential to impact a huge range of activities, from consumer finance to supply chain, compliance and risk management.

Finally, continuous delivery, microservices, and APIs are changing how nimble developers work and provide services. This dovetails with and builds on the rise and rise of open source, which is an enormous driver of enterprise innovation right now.

What are your biggest predictions for the next 12 months?

We see more great companies bursting into the open around Europe at the tech hubs: Berlin, Helsinki, London, Stockholm. We're also expecting to see the effect of a new generation of angel investors who really understand mobile first, having built and sold businesses since mobile took off.

These entrepreneurs with cash are likely to be a lot more founder-friendly than traditional European angels. For example we expect that will have a big impact on Stockholm (where there have been liquidity events for King, now possibly for Klarna, Spotify).

Finally, we expect an acceleration of the unbundling of the services provided by local banks around Europe to be a major driver of creating large new businesses here.

Are there any specific company ideas that you really want someone to build and would potentially fund?

We are excited to see machine learning applied to the data produced by users in every software market. Cybersecurity is effectively a data analytics problem; further developments in that space are certainly of interest.

We look forward to seeing products that collect and structure all available data and use it to prescribe, predict or automate.

This will apply to all fields: customer support, field sales, recruiting and skills evaluation, visual inspection, fraud, coding. A business that extracted snippets from the world’s open source code; automated their evaluation for function, quality and potential combination; and enabled the assembly of useable product - that would be pretty powerful.

If you could wave a magic wand and instantly have any imaginable solution to a problem you're facing (personally or at work), what problem would you solve?

At Mosaic we joke that science should find a way to make us function on even less sleep. Less of a joke is that we would welcome free video conferencing that works reliably.

Personally I love photography but don't have time to process my photos properly, which in turn deters me from experimenting. A service that automated the selection of a handful of my best photographs from an unsorted uploaded set, and gave me half a dozen different, pro-quality enhancements of each to choose from, would change that. Over time it would learn my preferences and either work with them or even suggest new techniques or shots to try.