When I set up the Reverse Pitch series, the intention was to give funds the opportunity to demonstrate what makes them different. Speedinvest x rose to the challenge, highlighting their unique investment thesis and approach to investing in tomorrow's technologies. Speedinvest x was founded in 2018 as a micro VC fund under the larger umbrella of Speedinvest, the Vienna-based venture fund with the intention of "Revolutionizing European Venture Capital".
Speedinvest x stands for "network effects", a sector-agnostic approach that seeks to back platform companies powered by the positive externalities of its userbase. The company has 5 international offices in Vienna, Berlin, Munich, London and San Francisco. I connected with partner Mathias Ockenfels and the Speedinvest x team to learn more about their approach and what makes "network effects" the most exciting place to invest right now.
Hi Speedinvest x! Thanks for taking the time to speak with tech.eu. To get started, can you summarize your investment thesis in three sentences?
Our vision is to be the preferred partner of entrepreneurs building tomorrow‘s network effect-driven platforms and technologies. We are on a mission to fund and operationally support the best European early-stage marketplace startups, empowering them to become category leaders. We have the strong conviction that the “platform trend” is here to stay and has actually just begun: Network effects will continue to “eat the world”, enabled by technologies in areas that we cannot even imagine today.
What do “network effects” mean to Speedinvest? Why was this specific fund developed, and what are some of the benefits that network effects offer for early stage companies? What are some of the opportunities and business models you are most interested in investing in?
Network effects are key to a) develop exponential growth and b) create defensibility in a “winner takes all” - or “winner takes most”- environment. These factors are critical to any company striving for outlier potential i.e. to become “the next big thing”.
We have set up Speedinvest x in order to find and support the best European founders that are able to tap the enormous potential of network effects to build large, sustainable category-defining and -leading businesses. Especially for early-stage companies, network effects can provide the winning edge in terms of customer retention and the creation of actual value in the market and product.
We are convinced that completely new markets will open up, while existing and supposedly “saturated” markets will continue to be shaped. This will be mainly driven by new and yet unconceived technologies in the space (e.g. Machine Learning, Blockchain, XR etc.). We are particularly interested in solutions that tackle the B2B-sector and the services-industry. Furthermore, we pay extra attention to new approaches for highly regulated markets (e.g. Healthcare Recruiting, Legal, Education etc.) or, that allow anyone to develop their entrepreneurial potential (gig economy, sharing economy etc.).
Which technologies do you find most exciting right now, and why?
Generally speaking, we, at Speedinvest x, are technology-agnostic and curious to learn about any new technology that is opening up completely new markets and realms to operate in, offering promising opportunities for both innovative B2C- and B2B-startups. As long as a new technology or approach is benefiting from strong network effect potential, then it's something we're interested in!
In our view, it’s up to the founders to pick the right technology in order to solve the problems they are trying to tackle. In other words, technology only matters to us in terms of being the right solution for the problem any given product is trying to solve. It`s a means to an end, and therefore a tool for any entrepreneur to develop amazing products. For example, we have seen and also invested in companies using XR-technology (e.g. www.admix.in) and are actively looking into the sustainability-space at the moment. Regarding the latter, we have talked to founders who are reimagining the “Cycle of Use”, changing the way how unsold goods reenter the recycling economy, and also came across B2C-solutions enabling individuals to track and lower their environmental footprint.
We believe that new technologies such as Machine Learning, AI or quantum computing allow entrepreneurs to make even more advanced use of the data that marketplaces are able to gather, and come up with new innovative approaches and business models built on top of strong network effects. These kinds of technologies will not only fuel the automation of many marketplace-related processes (e.g. verification, recommendation, targeting, matchmaking, customer service etc.), but also create more sophisticated tools to operate a marketplace- or platform-business such as payments or search (what we call “enabling technologies” for marketplaces).
Which company stage do you typically become involved in, and how much do you typically invest per company?
We usually invest as a first institutional investor at Pre-Seed- or Seed-stage acting as a lead investor committing at least 50% or more of rounds not larger than €2M. Our first check may range from €100k to €1M while our typical initial ticket size is around €600-800k in total rounds of €1.0-1.5M. We also keep a significant portion of the fund for follow-on investments and are able to get involved up and until a company’s Series A-fundraising. Read more about our investment strategy here.
Beyond funding, where does Speedinvest x provide the most “value-add” for founders?
Operational support beyond just funding is one of our strongholds at Speedinvest and our focus fund strategy is an integral part of that. Therefore, the team of Speedinvest x has a diverse, yet specialized background to provide founders with the necessary insights and expertise. We have extensive experience in product management, financing, fundraising, scaling, and operations of high-growth ventures particularly in the fields of marketplaces and platforms. Prior to Speedinvest x, all team members have either founded themselves or been deeply involved with multiple marketplace-startups and -businesses. At our semi-annual The Marketplace Conference in Berlin and San Francisco, we bring together over 500 marketplace-experts and -aficionados to exchange knowhow and best practices during one full day about all things marketplaces and network effects. Additionally, as part of the broader Speedinvest ecosystem, our portfolio companies benefit from Speedinvest’s platform services including our operational support functions Speedinvest Heroes (Recruiting & HR) and Speedinvest Pirates (Growth Hacking, Sales & Marketing) as well as our internal M&A Desk and our US Office in San Francisco that supports founders in the field of fundraising, business development, Go-To-Market and expansion to North America. In total, the Speedinvest team currently comprises over 60 people of which around 40 are working directly with our companies across 5 international offices (Vienna, Berlin, Munich, London, San Francisco). This means we employ 3-4x the manpower to support our companies compared to any other Seed-fund of a similar size (in terms of fund- and portfolio-size).
Once a year, we bring together all founders of our entire Speedinvest portfolio at “Speedinvest Insights” which is a 2-3 day event filled with expert workshops and presentations for hands-on advice and knowhow exchange with dedicated tracks for every company stage (e.g. masterclasses for more mature, later stage companies) and specific departments (marketing, sales, etc). In addition to that, we regularly organize “Speedinvest Spark” events in local hubs (e.g. London, Berlin, Vienna) to allow our portfolio founders to connect and exchange best practices.
Do you have any geographic restrictions on investments?
Our main focus lies on startups that are operating in Europe. However, we are able to allocate approximately 15% of our investments to startups outside of Europe, whereby we are mostly engaging with startups from the USA.
What is your commitment to diversity and inclusion?
We pay special attention to building a diverse team within Speedinvest x and Speedinvest in general. Currently, the x-team comprises 7 people with 5 different nationalities across all age-groups. Furthermore, the investment team currently has 5 male and 2 female members. You can read more about our team composition and its diversity here.
Speedinvest x Team (from left to right): Philip Specht, Senior Associate, Munich Mirjam Techt, Associate Partner, Vienna Magda Posluszny, Associate, London Pierre-François Marteau, Partner, Vienna & Berlin Jeroen Arts, Principal, Berlin Mathias Ockenfels, Partner, Berlin Konstantin Schmeißer, Visiting Analyst, Berlin Michael Schuster, Partner, Vienna (not in the picture)
Disclaimer: The column “Stage” refers to the stage i.e. moment of our initial investment, not the current stage of the company or time of additional, follow-on rounds.
As our focus fund Speedinvest Network Effects, in short “Speedinvest x”, is still relatively young (officially launched in January 2018) we have included all investments since the beginning of 2018 to provide a better view on our investment strategy and approach. Investments are listed in chronological order from most recent to oldest. In total, since the inception of the fund, we have done 14 investments to date (as of end of August 2019).
|Spain & Germany
|HR / Jobs
Note: The reason for not sharing the invested amounts per company and the names of certain companies (that are still operating in stealth) is that we always put the founders’ and company’s interest first. Some of them chose to not disclose their funding rounds and/or amounts for strategic reasons and we respect that. In order to provide interested founders and investors with relevant insights on our investment strategy and approach, we have aggregated the investment amounts & rounds in our yearly review that we published on our blog. We hope this helps to better understand how we operate and what we do.
What’s one investment from your Anti Portfolio that you wish you hadn’t passed up?
As Speedinvest x has only been launched approx. 18 months ago, our anti-portfolio is, luckily, still limited. However, there are some (still rather early-stage) companies that we would include in the list already, such as (most recent disclosed round in brackets):
- Otrium (€ 7M Series A led by Index)
- Bump ($ 7.5M Series A led by e.ventures)
- Cluno ($ 28M Series B led by Valar Ventures)
- Choco (€ 4.5M Seed)
- Tiqets ($ 23M Series B led by HPE Growth Capital)
- OpenMineral ($ 2.25M Seed led by Goldcorp)
Besides, our team members have been previously investing in different roles and count the following companies among their personal anti-portfolio:
- GetYourGuide at Seed ($484M Series E led by Softbank Vision Fund)
- Revolut at Pre-Seed ($250M Series C led by DST Global)
- The Homelike at Seed ($14M Series B led by Spark Capital)
- Careship at Seed ($6M Series B led by Creandum)
- Wallapop at Seed (now LetGo) ($500M Series E led by Naspers)
- Treatwell at Seed (Acquired by Recruit for $171M in 2015)
- Konux at Seed ($31.5M Series B led by NEA & MIG)
- HomeToGo at Seed (Series C led by Insight Partners)
- Shippo at Seed ($20M Series B led by Bessemer Venture Partners)
- Kahoot! at Seed ($31M Series B led by Datum AS)
- La ruche qui dit oui at Seed ($9M Series B led by Felix Capital & Union Square Ventures)
- Capitaine Train at Seed (Acquired by Trainline for $189M in 2016)
If you could invest in any type of business or technology right now (real or imagined) what would that be?
One potentially interesting field would be future, sustainable mobility (e.g. technologies that enable the future transportation marketplaces of urban areas, incl. short-range, autonomous aerial transport etc.)
Another interesting market is the rapidly expanding cannabis & CBD market. This market still holds a handful of opportunities, ranging from the whole logistics/ B2B-space to creating individualized consumer- and mood-specific therapy solutions.
What is the best way for founders to get in touch?
First and foremost, we are trying to be very open and approachable for anyone that is keen to engage with us. In case our paths haven’t crossed already before, a good start is to have a quick, first look at our website and familiarize yourself with Speedinvest x, so you know who you are dealing with! ;-)
One easy way to get closer when there hasn’t been any previous interaction is our marketplace scorecard. It provides more detailed insights into our investment thesis, our way of thinking and what exactly we are looking for in startups with potential for strong network effects. By filling out the marketplace scorecard typeform founders can easily contact us and provide a great basis for further discussion.
On that same note, our Speedinvest-Medium-channel and our Twitter are easy ways to stay up-to-date and interact with us online - our DMs are open! ;-) Several of our team members also have their own blogs (Michael, Mathias, Philip, Jeroen) and are more or less active on Twitter (Magda, Jeroen, Mathias, Michael) and/or Linkedin.
Additionally, there is a link on our website to a simple contact form which is another easy and fast way to get in touch. You can also find all our individual contact details online and get directly in touch with whoever you want to engage with.
Of course, our semi-annual The Marketplace Conference in San Francisco and Berlin as well as related, smaller local The Marketplace Meetups in different European cities (e.g. Warsaw) are great opportunities to meet us and our portfolio founders in person to learn from like-minded marketplace-entrepreneurs. There is a Youtube channel with recordings from previous events, too.
Thanks to Speedinvest’s pan-European approach and our distributed team at Speedinvest x, we’re also quite active in the local hubs and ecosystems. Please just ping us and meet us face-to-face at one of our offices in Vienna (Mirjam, Pierre-Francois, Michael), Munich (Philip), Berlin (Jeroen, Mathias, Konstantin), London (Magda) or San Francisco (Santiago).
Lastly, we always appreciate friendly, warm introductions from our network of existing portfolio founders, LPs and co-investors. Any common connection is always helpful and considering our large portfolio and our broad LP-base, there is always “someone that knows someone” - Linkedin is your best friend! ;-) We’re looking forward to talking to you!
One important, final remark: We often also proactively reach out to (potential) founders and interesting, early stage companies. Hence, we’re not only waiting for founders to get in touch with us, but we're happy to be the ones to initiate a dialogue and are thankful for every reply.